Nigerian Banks Close Over 23 Million Customers' Accounts in One Month
- The Nigerian Interbank Settlement System (NIBSS) has disclosed that banks terminated 23.3 million customer accounts in July
- The CBN had instructed financial institutions to transfer unclaimed balances and funds in dormant accounts to its accounts
- The number of dormant accounts decreased by 7.6% month-on-month, dropping to 18.97 million in July from 20.57 million in June
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
Commercial and merchant banks in Nigeria terminated 23.3 million customer accounts in July 2024.
The figure marks a 0.56% rise from the 23.17 million accounts closed in June 2024.
Source: UGC
Massive accounts closures
An analysis of data from the Nigerian Interbank Settlement System (NIBSS) reveals that, between January and July, the number of closed accounts declined by 5.6% from 24.7 million in January.
A further analysis indicated that the number of active bank accounts increased by 2.4% month-on-month to 231.1 million in July, up from 225.53 million in June.
Meanwhile, the number of dormant accounts decreased by 7.6% month-on-month, dropping to 18.97 million in July from 20.57 million in June.
It is worth noting that the Central Bank of Nigeria (CBN), in its "Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria," instructed banks and other financial institutions to transfer unclaimed balances and funds in dormant accounts to CBN's accounts.
The CBN also provided regulatory guidelines for account holders and beneficiaries to recover their dormant funds for up to ten years.
Additionally, the apex bank announced plans to establish a dedicated office to oversee dormant accounts and unclaimed balances.
The CBN recently increased the country’s lending rates during its Monetary Policy Committee meeting to 27.25%.
The CBN governor, Yemi Cardoso, also used the opportunity to assure Nigerians that the country's banking sector continues to be secure, stable, and robust.
Speaking with Legit.ng on the CBN's takeover of dormant accounts from commercial banks, Uzo Chukwuma, a financial analyst, stressed the need for caution.
He said the CBN's plan to take over dormant accounts from commercial banks raises significant questions about transparency and customer rights.
He said:
"While it could potentially channel idle funds for economic development, safeguarding the interests of account holders must be paramount. Clear communication, a straightforward reactivation process, and a robust mechanism to ensure rightful owners can access their funds are crucial."
He added that the move should strike a balance between financial inclusion and regulatory control to maintain trust in the banking system.
FG announces rise in CBN’s foreign reserves
Meanwhile, Legit.ng earlier reported that Nigeria's foreign reserves have witnessed a significant increase of $4 billion over the past seven months.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, disclosed this while speaking at a meeting organized by the Debt Management Office (DMO) to discuss the issuance of the $500 million local bond, which is set to kick off on Monday, August 19.
Edun attributed this growth to robust fiscal policies and reforms aimed at enhancing revenue collection efficiency across various sectors.
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Source: Legit.ng
