What Is A Dormant Account?
“:… has had no activity for a long period of time, other than posting interest. A statute of limitations usually does not apply to dormant accounts, meaning that funds can be claimed by the owner or beneficiary at any time…” Investopedia
The CBN has classified bank account inactivity into 2 different categories: Inactive and Dormant types
An inactive account is an account that has not witnessed any customer or depositors induced transactions for a period of 6 months after the last customer or depositor induced transaction. The customer will however not be required to produce any documentation to make such account active, other than simple deposit of cash of any amount.
An account that has not witnessed any customer or depositor induced transaction for a period of 1 year after the last customer or depositor induced transaction. The customer or account holder will be required to provide satisfactory evidence of account ownership, acceptable means of identification and utility bill to confirm present place of residence if residence has changed.
Below is how a dormant account is treated during period of dormancy
- Interest-bearing accounts like savings accounts, fixed deposit accounts and call accounts will retain their interest earning status during the period of dormancy.
- The cost of monitoring and reaching out to customers to reactivate inactive or dormant account via SMS, email, phone calls or physical visitation are to be born by banks.
- Banks are to continue to monitor and protect all dormant and inactive account against wrong usage.
- Banks are under obligation to report status of dormant accounts and efforts made to locate the owners of such accounts and their next of kin or representatives to CBN on a quarterly basis.
- For individual accounts, banks are expected to reach out to the next of kin after its inability to locate the account holder within the next month after 3 months of dormancy. While for corporate accounts, banks are expected to contact the directors or seek information from the Corporate Affairs Commission (CAC) on the directors of the company.
- Reactivation of dormant account is not expected to attract any cost to the account owner since the bank has had ample use of the idle funds during the period of dormancy.
- Any finally banks are expected to maintain records of all dormant accounts irrespective of the number of years of dormancy and reactivate such accounts once the bona fide account holder or his or her legitimate representative request that the account be reactivated.