CBN’s New Directive on Dormant Accounts: A Reflection on Nigeria’s Financial Transparency Drive

The Central Bank of Nigeria’s (CBN) recent directive mandating banks and financial institutions to publish details of dormant accounts, unclaimed balances, and other financial assets marks a critical step in enhancing financial transparency. This move aligns with a broader strategy to improve accountability in the banking sector while ensuring that unclaimed funds do not remain perpetually inaccessible to rightful owners.

This policy is not entirely new. In July 2024, the CBN had already issued a directive requiring banks to transfer unclaimed balances from dormant accounts into a designated account at the apex bank. However, the latest guideline expands on this by making these accounts publicly available—albeit with limited information—to allow for possible claims and verification by concerned individuals.

Historical Context: A Decade of Reform

The CBN has a long-standing commitment to financial sector reforms aimed at protecting depositors and reducing financial malpractices. In 2015, the Bank Verification Number (BVN) initiative was launched to curb fraudulent transactions and improve account traceability. Similarly, in 2020, the apex bank introduced policies to curb illicit financial flows through tighter Know Your Customer (KYC) regulations.

The current directive follows global best practices. Countries like the United States and the United Kingdom maintain public registries of unclaimed funds to ensure transparency. However, Nigeria’s move raises concerns about compliance with the Nigeria Data Protection Act (NDPA) 2023, which safeguards individual financial data. The CBN, in its directive, reassured that its mandate aligns with legal provisions, particularly Section 25(b) of the NDPA, which permits justified deviations in certain financial disclosures.

Stakeholder Reactions: Balancing Transparency with Privacy

While transparency advocates welcome the policy as a necessary measure to prevent financial institutions from indefinitely holding onto unclaimed funds, privacy concerns have been raised. Banking customers worry that making account details public, even in a limited format, could expose individuals to potential fraud or identity theft. Financial institutions are also wary of the administrative burden this policy could impose, particularly for smaller banks with limited digital infrastructure.

To address these concerns, the CBN has stipulated that banks must only publish the account name, type, bank, and branch—excluding sensitive details like balances or BVNs. Additionally, financial institutions without dedicated websites must publish the information on their industry associations’ websites, ensuring uniform compliance across the sector.

Looking Ahead: Implications for Nigeria’s Financial Ecosystem

The directive signals a more aggressive push by regulators to ensure financial institutions do not retain unclaimed funds indefinitely. It also underscores the need for Nigerians to remain vigilant about their financial assets, regularly updating their account details and ensuring active usage to prevent dormancy.

With the implementation of this policy, banks may face increased claims from individuals seeking to recover their funds. This could prompt institutions to improve customer outreach efforts, particularly for accounts that have been inactive for extended periods.

As Nigeria continues its journey toward financial inclusion and accountability, this policy is another reminder that transparency remains a cornerstone of economic reform. However, its success will depend on how well banks balance compliance with customer privacy and data protection.

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