Market News

By Arinze Nwafor

Four banks have published details of no fewer than 321,181 dormant accounts following a directive by the Central Bank of Nigeria, The PUNCH reports.

This comes as economic analysts have warned that the CBN directive raises major concerns around customer communication, account reactivation procedures, business failures, and privacy.

The published dormant accounts span individuals, companies, cooperatives, churches, clubs, community associations, and small businesses that have remained inactive for over 10 years.

The banks include Access Bank Plc, Union Bank of Nigeria Plc, Stanbic IBTC Bank, and Fidelity Bank Plc.

The disclosures followed the CBN’s July 2024 Guidelines on Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets, which directed financial institutions to publish dormant account details on their websites six months before such funds become eligible for transfer to the apex bank’s Unclaimed Balances Trust Fund Pool Account.

Analysis of the published records showed that Access Bank listed 243,934 dormant accounts, Stanbic IBTC published 26,135 dormant accounts, Fidelity Bank disclosed about 61,900 dormant accounts, while Union Bank published 212 dormant and unclaimed accounts that had remained inactive for 10 years and above.

The combined figure from the four banks stood at about 321,181 dormant accounts. Findings from the Access Bank register showed an almost even split between individual and corporate dormant accounts, indicating that business inactivity contributed heavily to the rising dormant account volumes across the banking industry.

A full extraction of the Access Bank document showed 122,390 individual accounts and 120,718 corporate accounts, representing 50.34 per cent and 49.66 per cent, respectively.

The Fidelity Bank register showed a significantly different pattern, with corporate accounts accounting for about 79 per cent of dormant accounts. The document, which spanned 693 pages, contained approximately 48,900 corporate dormant accounts and about 13,000 individual dormant accounts.

The accounts reflected widespread inactivity among SMEs, oil and gas firms, logistics operators, churches, schools, hospitality businesses, pharmaceutical firms, marine operators, and informal trading businesses.

Several dormant accounts were linked to Lagos commercial districts such as Idumota, Oyingbo, Allen Avenue, Awolowo Road, and Ladipo, while major clusters also appeared around Port Harcourt oil-service corridors and northern trading centres.

Union Bank’s list, though significantly smaller at 212 entries, largely consisted of cooperatives, clubs, churches, associations, alumni bodies, women’s groups, and community development unions spread across the country.

Stanbic IBTC’s dormant accounts register, which exceeded 1,520 pages, showed strong concentrations in Lagos, Abuja, Kano, Port Harcourt, Ibadan, Kaduna, and Maiduguri. The document contained mostly current accounts, including salary accounts, joint accounts, and a smaller number of corporate and institutional accounts.

Meanwhile, some major lenders adopted different approaches. United Bank for Africa Plc did not publish a dormant accounts register but instead maintained an unclaimed dividend list.

First Bank of Nigeria Limited and Zenith Bank Plc provided dedicated portals for customers to search for affected accounts rather than publishing comprehensive lists.

Guaranty Trust Bank Plc published dormant account management guidelines without attaching a dormant accounts document, while Ecobank Nigeria offered dormant account reactivation services but did not publish a Nigerian dormant accounts list.

Analysts react

In phone interviews with The PUNCH, analysts and finance stakeholders addressed the implications for bank-customer communications, improved customer relations, and privacy concerns. They also noted that the data from the documents revealed the state of business and corporate account holder closures/ dormancy.

The Director of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the CBN directive highlighted shortcomings in customer communication by banks. “I think it’s more about getting the banks to communicate a lot more with their customers because if the CBN is compelling them to publish, it’s a communication issue,” Yusuf said.

“So, the bank needs to do a lot more to get in touch with its customers. This is a customer service issue, actually, to know what exactly is happening, why they are not active in their accounts, what they can do to resuscitate their accounts.”

Yusuf added that worsening economic conditions and rising SME failures contributed heavily to dormant corporate accounts. “The mortality rate of businesses has grown significantly. When you are running a business, you have an account, and the business collapses because of a whole lot of issues. You just walk away from everything,” Yusuf said.

“The economic situation and the high rate of business mortality, especially among micro-enterprises, small businesses, and even medium-sized businesses, are also factors.”

He also criticised account reactivation procedures, saying cumbersome documentation discouraged customers from reviving dormant accounts. “We need to simplify as much as possible the process of resuscitating dormant accounts,” Yusuf said. “If I have my ID card, I will give you my name. I have my BVN. I have my NIN. Why are you asking me for the NEPA bill?”

Yusuf further called for reforms to simplify access to funds belonging to deceased account holders. “It’s not fair for the families of people who have died to have huge amounts of money in their accounts, and they cannot access it,” Yusuf said. “We have to simplify the process. The process is very, very bureaucratic.”

Professor of Economics and Public Policy at the University of Uyo, Akpan Ekpo, questioned the rationale behind publishing dormant account details publicly.

“The Central Bank has examiners who can go to a bank and ask for accounts and know what they have to do without making it public,” Ekpo said. “For me, it bothers me about privacy. Because if you publish that person A has a dormant account, it doesn’t look good in terms of the environment we are living in. You can expose the person.”

Ekpo said the apex bank already possessed enough regulatory powers to inspect dormant accounts directly from banks without public disclosure.

“I don’t see any reason why that has a monetary policy purpose,” Ekpo said. “They should communicate more about why they want to do it.”

Former President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said dormant accounts emerged for several reasons, including bank mergers, customer relocations, deaths, and abandoned businesses.

“Companies collapsed, failed, and the owners did not bother to withdraw all the balances from accounts,” Idahosa said. “People who passed on and do not have the next of kin to open their accounts. There are all kinds of reasons why accounts become dormant.”

Idahosa said many customers abandoned small balances because of the stress associated with account recovery. “A couple of people tried to go to the new banks that inherited their accounts from the other banks. Especially for small amounts, people just forgot about it because of the trouble pursuing it,” Idahosa said.

He also warned that publication of dormant account holders could trigger legal disputes and privacy concerns. “Ordinarily, the central bank should not do that because of the privacy doctrine in the relationship between the customer and the bank,” Idahosa said. “A lawyer or a group of lawyers, or even civil society organisations, can go to court to prevent the central bank from doing so.”

He added, “It could lead to some chaos in some families, who may find that their parents have lots of money in an account and they never knew about it. Now there will be battles among the children to come and get it.”

Under the 2024 guidelines, the CBN said dormant accounts and unclaimed balances had become vulnerable to fraud and abuse.

The apex bank stated that dormant balances eligible for transfer included current accounts, savings accounts, domiciliary accounts, prepaid card wallets, unclaimed salaries, stale drafts, deposits for shares, and abandoned financial assets that had remained inactive for at least 10 years.

The CBN also directed banks to notify dormant account owners regularly through emails, text messages, and letters, while maintaining audit trails and quarterly reporting obligations.