The CBN requests that banks move money from dormant accounts and unclaimed balances

The Central Bank of Nigeria (CBN) has issued a directive requiring banks to transfer unclaimed balances and funds from dormant accounts into a trust fund managed by the CBN.

This move aims to address the significant amount of idle funds within the banking system and ensure better utilization of these resources.

According to the CBN, the funds will be held in a trust and made available to the original account holders or their legal beneficiaries upon request. 

This initiative is part of a broader effort to improve financial management and accountability within the banking sector.

However, this directive has sparked concerns among stakeholders. Many worry about the potential impact on the liquidity and stability of banks, as substantial sums of money being moved out could create financial strain. 

However, Critics argue that the policy might lead to banks becoming distressed if a significant portion of their deposits is classified as dormant and transferred out.

Additionally, there is apprehension about the government's role in managing these private funds, with some seeing it as an overreach and an intrusion into private financial affairs.

The directive follows similar measures outlined in the Finance Act of 2020, which included provisions for the management of unclaimed dividends and other idle funds. 

This act allows the government to utilize these funds temporarily while ensuring that they remain available for rightful claimants at any time.

This policy is part of the CBN's ongoing efforts to reform and stabilize the Nigerian financial system, but its implementation will require careful balancing to avoid unintended negative consequences on the banking sector and overall economic stability.