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HomeExclusiveFG Targets N895bn Dormant Accounts Funds, Unclaimed Dividends

FG Targets N895bn Dormant Accounts Funds, Unclaimed Dividends

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By Babajide Okeowo 

Following the provision of the Finance Act 2020 which empowers the Federal Government to take over unclaimed dividends and dormant account balances unutilised for more than six years as special credit through the Unclaimed Funds Trust Fund, FG will this year take over N895 billion from banks and quoted companies.

The unclaimed dividends and dormant bank balances as special borrowing will be deployed to fund crisis related expenditures.

The Act states: “From the commencement of this Act, any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or unutilised for a period of not less than six years from the date of declaring the dividend or domiciling the funds in a bank account shall be transferred immediately to the Unclaimed Funds Trust Fund.

“Provided that this section shall not apply to official bank accounts owned or belonging to the Federal Government, State Government or Local Government, or any of their Ministries, Departments or Agencies.

CBN Guidelines define dormant accounts as any account not operated by the owner for more than one year. According to data from the Nigeria Inter-Bank Settlement System (NIBSS), as of May last year, there are 44.5 million dormant bank accounts.

Vanguard investigations show that dormant account balances constituted about 2.5 percent of total deposits of banks, which stood at N29.5 trillion as of September 30th, 2020, according to data from the National Bureau of Statistics.

Thus, the amount of money in dormant account balances is about N737.5 billion. When combined with the N158 billion outstanding unclaimed dividends, the total amount of money that would be taken over by the FG may be up to N895.5 billion.

 

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