Do you have a dormant account? Read BoG’s new directive

Do you have a dormant account? Read BoG’s new directive. According to Investopedia, a dormant account “is an account that has had no financial activity for a long period of time, except for the posting of interest.”
After the dormancy period, such accounts become the unclaimed property of the state..

Do you have a dormant account? Read BoG’s new directive

For the longest time, most financial institutions, particularly commercial banks have several dormant accounts in their books with some people holding the belief that financial institutions channel such accounts into their profit books.
To that effect, pursuant to Section 92 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), all accounts which fall in the category of unclaimed balances or dormant accounts shall be transferred by the financial institution to a ‘Dormant Account Register’ and shall not attract any service charge or account-related fees; or accrue any interest.

The directive to financial institutions
According to Bank of Ghana, financial institutions are to take adequate steps to contact an account holder either by phone call, SMS, email, visitation or any agreed means of communication during the account opening at least three months prior to an account falling into dormancy.
Financial institution shall contact the Next of Kin of the dormant account holder when all efforts to reach out to the dormant account holder prove futile.
financial institution shall publish the list of all dormant accounts on its website, and it shall remain displayed for at least a period of fourteen (14) calendar days. The publications shall include a notice that the balances of the affected accounts shall be transferred to the Bank of Ghana after two (2) weeks from the date of publication.
Should a financial institution receive a claim request from a dormant account holder of funds transferred to the Bank of Ghana, the financial institution shall submit a validated claim within five (5) working days after receipt of the claim to the Bank of Ghana in the format specified by the central bank. Afterwards, appropriate steps will be taken to validate the claim and the funds will return to the financial institution of the customer.

Penalty
According to Bank of Ghana, there will be sanctions meted out to any financial institution that flouts the directives. Such a financial Institution in breach of the directive’s provisions shall be liable to an administrative penalty of not more 10,000 penalty units.

Click here for a detailed look at BoG’s dormant account directive.