Finance Bill 2020: FG to start borrowing money from dormant bank accounts, unclaimed dividends

The Nigerian government has concluded plans to start borrowing money from unclaimed dividends and bank account balances left unattended for at least six years. The monies will be available as special credit to the federal government through the Unclaimed Funds Trust Fund.

This was contained in the Finance Act 2020 recently signed into law by President Muhammadu Buhari, the trust fund will be a sub-fund of the Crisis Intervention Fund.

“Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilized amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or unutilized 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 trust fund,” the act reads.

The act exempts official bank accounts owned by the federal government, state government or local governments or any of their ministries, departments, or agencies.

Back in December, the Minister of finance, Budget and Planning told Senators during the public hearing on Finance Bill 2020 that “this move will make needed funds available to the federal government without foreign exchange worries or conditions attached to loans from multilateral lenders”.

She said “we have funds sitting in the registrars and funds sitting in the banks which are not helpful to the system. The government is just trying to make use of the funds in the interest of Nigerians because there is no point having idle funds in the banks whereas government needs money to carry out many developmental projects.”

The representative of the Securities and Exchange Commission, Abdulkadir Abbas also told the committee that the total amount of unclaimed dividends in the country stood at N150 billion.