Nigeria’s Dormant Bank Accounts Surge to 19.7 Million
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The number of dormant bank accounts in Nigeria has surged to over 19.69 million, according to the latest figures from the Nigeria Inter-Bank Settlement System (NIBSS). The data, which tracks monthly account statuses throughout 2024, reveals a steady rise in inactive accounts, coinciding with new regulatory measures from the Central Bank of Nigeria (CBN) aimed at increasing transparency and reclaiming unclaimed funds.
The CBN directive, introduced to enhance accountability and return unclaimed funds to their rightful owners, mandates commercial banks to publish details of dormant accounts. This policy shift comes amid growing concerns over the high number of idle accounts, which have exceeded 19 million each month since February 2024, reaching 19,697,125 by December.
Surge in Dormant Accounts Despite Policy Changes
The NIBSS data shows a significant increase of 1.2 million dormant accounts from January’s figure of 18,492,169—a 6.51% rise over the year. The number of dormant accounts peaked at 20.57 million in May and June before declining slightly in the second half of the year.
The surge occurred despite the CBN’s July directive requiring banks to disclose details of dormant accounts, a move designed to enhance transparency and encourage account reactivation. Following the announcement, there was an initial rush by customers to reactivate their accounts, leading to a temporary drop of 1.59 million dormant accounts. However, the numbers fluctuated in the months that followed, reflecting continued challenges in customer re-engagement.
Active Accounts on the Rise Amid High Closure Rates
While dormant accounts remained persistently high, the number of active bank accounts grew substantially, rising from 209.31 million in January to 311.65 million in December—a 48.9% increase. This surge in active accounts suggests a robust expansion in banking activity and financial inclusion.
Conversely, closed accounts also recorded a consistent upward trend, reaching 25.48 million in December, up from 21.71 million in January. In total, 3.78 million accounts were closed in 2024, reflecting shifting banking dynamics amid new regulatory requirements.
CBN’s Push for Transparency and Unclaimed Funds
The CBN’s directive compels all banks and financial institutions to publicly disclose details of dormant accounts, unclaimed balances, and other financial assets on their official websites. The policy, outlined in a circular signed by Michael Akuka of the CBN’s Financial Policy and Regulation Department, specifies that banks must display key details such as account names, types, and domiciled branches.
The initiative seeks to address public concerns about dormant accounts potentially being vulnerable to fraud. CBN Governor Olayemi Cardoso highlighted the risks, stating, “If you leave accounts dormant in banks, they become more susceptible to fraudsters copying your identity… The policy is meant to ensure these funds are safeguarded by the central bank.”
Under the new guidelines, dormant accounts and unclaimed balances that have remained inactive for at least 10 years will be transferred to the Unclaimed Balances Trust Fund Pool Account managed by the CBN. These funds may be invested in Nigerian Treasury Bills and other government securities, with the principal and any accrued interest refunded to beneficiaries upon request.
Economic Implications and Industry Reactions
The increasing number of dormant and closed accounts raises questions about financial inclusion and customer engagement strategies in Nigeria’s banking sector. Although the surge in active accounts reflects growing banking adoption, the persistently high levels of inactivity indicate a need for banks to re-evaluate their customer retention approaches.
Critics argue that the CBN’s directive, while promoting transparency, could disrupt customer relationships and increase operational challenges for banks. However, proponents believe it will enhance trust and accountability in the financial system.
Amid these developments, the Nigerian government is eyeing the economic potential of unclaimed funds. Former Finance Minister Zainab Ahmed previously estimated that as much as N850 billion could be realised from dormant accounts and unclaimed dividends, providing a significant boost to the national treasury.
Balancing Transparency with Customer Confidence
The CBN’s aggressive push for transparency reflects a strategic effort to clean up the banking system while addressing fraud risks linked to dormant accounts. However, the policy has also sparked debate about the balance between regulatory oversight and customer confidence.
As the implementation continues into 2025, industry stakeholders and analysts will be closely watching how Nigeria’s banking sector navigates the complexities of customer engagement, financial inclusion, and regulatory compliance.
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