By PETER EGWUATU
*Advocate establishment of trust fund *Demand immediate review of policy
There is a continuing surge in the value and volume of dormant accounts in banks which stakeholders have estimated to be over one trillion naira, and are calling on government to set up a trust fund that would manage the fund.
The stakeholders also demanded for an immediate review of the policy on dormant accounts in banks by the Central Bank of Nigeria (CBN) to really ascertain current value and means of managing it.
Some of the stakeholders who reacted to the recent report published by Vanguard over the ordeal and frustration faced by beneficiaries of deceased customers of banks, called for the establishment of a trust fund to manage dormant accounts that have stayed for over five years.
Vanguard’s investigation revealed that 90 per cent of the dormant accounts are with first generation banks in Nigeria.
Meanwhile, attempt at getting the actual value of dormant account in each of the 21 banks operating in the country proved abortive as most of them said, “It is only the CBN that can give the figures since they monitor the banks’ activities.”
According to sources within the banks, “we are not in a position to reveal the amount in our dormant accounts except we get directive from the CBN. The CBN ought to know the value because we submit our accounts to them and also they do monitor the banks.”
When Vanguard sought to get the total value of dormant accounts from the CBN, the apex bank’s Director, Corporate Communication Department, Mr. Ugochukwu Okoroafor, said, “We do not keep statistics on value of dormant accounts. Dormant accounts are part of banks’ deposits, so nothing stops them from lending out.”
But it would be recalled that the apex bank on March 7, 2011 instructed banks to do an audit of their dormant accounts. In a memo to all banks in the country, CBN mandated them to forward to it the list of all dormant accounts and the balances thereon.
A dormant account is one that has remained inactive from six months upwards. This means that the owner of the account may have either failed to pay in or withdrawn money from the affected account during the stipulated period.
Speaking exclusively with Vanguard on the issue, Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria (PSAN), blamed the CBN and other regulatory agencies in the financial sector for the loopholes and malpractices in the industry.
According to the PSAN chairman, “the managing directors of banks are feeding fat with the dormant accounts while beneficiaries of the dead ones are suffering and are being frustrated to collect money left behind by their loves ones. I think government should look at this dormant account issue critically and established a trust fund that would be administered by credible Nigerians. If unclaimed dividend is over N50 billion then dormant account should be running over a trillion naira. If you consider people who have died since civil war, you will agree with me that such money will be running over a trillion of naira.
Continuing, he said, “There should be a review of the policy on dormant account. This is one of the things that the National Assembly should compel the CBN to do. The six months period that an account could be regarded as dormant should be reviewed. Besides, dormant account could be reclassified into two , that is, those who are still leaving and does not actively operate the account and those who are dead. By this, we would be able to get accurate record of dormant account. I am sure that the CBN cannot give you the exact figure of dormant accounts in banks they supervise.”
In his own response, Mr. Taiwo Oderinde, National Coordinator, Proactive Shareholders Association of Nigeria (PROSAN), said, “It is sad that the regulators who are supposed to protect customers are not doing their work effectively. How can the regulators be there and beneficiaries of banks’ customers be suffering when they go to reclaim money left behind by their loves ones.”
Continuing, he said, “One of the reasons, why dormant account continues to grow is because many people have many accounts with different banks and may not actively operate all of them, though, such people have access to get the money whenever they need it. Also, another major reason for the increase in dormant account is death.
There are some people who have died and did not reveal information about their accounts with banks when they were alive to their close ones and some who had next of kin, but in the process of reclaiming the money from the banks are frustrated and the money abandoned. So the CBN should find a way of monitoring the banks and the use of such funds. I think establishment of a special body to manage dormant accounts could be necessary, especially if credible and trusted people from the private sector are appointed to manage it.
Also speaking to Vanguard on the issue, Mr. Adebayo Adeleke, National Secretary, Independent Shareholders Association of Nigeria (ISAN) said, “ It is unfortunate that beneficiaries of deceased banks’ customers go through rigorous process before reclaiming money from the banks. This is the reason why CBN should educate the people on the need to have a Will once an account is opened. The Next of Kin is not allowed access to an account that does not belong to him or her, the bank merely ask people to fill Next of Kin as a mere classification so that in the event of any need to contact the customer fails for any reason, the Next of Kin could be contacted.
According to Adeleke, “I don’t think there is any law at the moment that prohibits banks from using dormant funds with them. Banks take deposit and also lend it. So what is required is for the banking public to be educated. Also Letter of Administration should not be made too difficult to get from the courts. The government should intervene to ensure that due process is followed.”
It will be recalled that Vanguard narrated the experiences some next of kin of account holders in banks go through in trying to recliam the money left behind by their deceased relatives. They expressed dismay at the ordeal they face in obtaining money left behind by their diseased relatives.
For instance, one, Mr. Eroms Adigwe, who narrated his ordeal to Vanguard, said, “I have a sister who died on 11th November, 2008 and when I went to her bankers, First Bank of Nigeria, to claim the N120,000 she had in her account as her next of kin they told me to produce a letter of administration before I can have access to the money. I went to Lagos State Secretariat at Alausa, Ikeja to seek for the document and I was asked to pay N24, 000 and I complied. I took the receipt to the High Court in Ikeja so as to obtain the letter of Administration.
“When I got to the court a file was opened for me and they said I needed to see some officials to sign the document and they kept tossing me from one person to another, and sometimes, they will inform me that the person that will sign the document is not available. The court officials kept telling me to check back subsequently.
“The most terrible thing is that any person you meet, he or she will demand for money from you. This I did for over seven months without success. So, I was eventually frustrated when at a time I was asked to produce four persons that are related to me as witnesses. So I left pursuing the case in July 2009 till date. The sister’s children are still very small and are in schools, all I wanted to do was to get the money and use it to assist them, but that has not worked out. My younger ones and I are the ones taking care of my sister’s children.”
Many other victims who did not want their names mentioned have narrated similar pains they go through in securing letter of administration.
In his own experience, Mr. Francis Iwuchukwu, who lost his father sometime ago, said, “Shortly after the demise of my father, as the first child, I did approach my father’s bank to inform them that their customer who coincidentally is my father had died. The bank empathised with me and asked me to put it into writing, which I did. Thereafter, I was told to approach a Lagos High Court to get a letter of administration before my father’s money can be released to me since my father did not write a will, despite the bank’s confirmation that I was his next of kin.
It took the probate section of the court over one year to issue the letter of administration that will enable me to collect the money, because of the long procedure involved in getting all the necessary documents, before the money can be released since there was no written will.”
Iwuchukwu, said that after the probate section of the court had taken a long time to issue the letter of administration, the banks also took their own turn in ensuring that he went through another round of procedure before he eventually got the money.
When Vanguard sought the opinions of banks regarding the trauma the next of kin of account holders face in claiming money left behind by the deceased customers they said it is a regulatory requirement that next of kin must produce letter of administration.