CBN Governor Warns of Fraud Risk in Dormant Accounts

Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has raised concerns about the vulnerability of dormant accounts to fraud. Speaking at the conclusion of the 296th Monetary Policy Committee meeting in Abuja on Tuesday, where a hike in the benchmark interest rate to 26.75% was also announced, Cardoso emphasized the risks posed by leaving accounts inactive.

The CBN recently mandated financial institutions to transfer funds from dormant accounts, unclaimed balances, and other financial assets to its custody for safekeeping. The bank’s objective is to reunite these funds with their rightful owners, manage them in trust, and establish standard procedures for reclaiming such assets.

Cardoso stated, “If you leave accounts dormant in banks, they are more susceptible to fraudsters copying your identity and trying to gain access to your money. The policy and directive ensure that all these monies come to the central bank for safekeeping at zero cost to the beneficiaries. The central bank will manage the money, and when the rightful owner surfaces, the money is returned with any accrued income.”

At the MPC meeting, Cardoso also highlighted the need for a clear exit strategy on the recently announced duty waiver for food imports. “The committee expressed optimism about the Federal Government’s measures to bridge the food supply deficit, particularly the 150-day duty-free import window for food commodities. While this measure may be effective in the short run, it must be implemented with a defined exit strategy to avoid reversing the recent gains in domestic food production,” he stated.

Cardoso also commented on Nigeria’s economic outlook, noting that “Real GDP grew by 2.98% in the first quarter of 2024, compared with 3.46% in the fourth quarter of 2023. The domestic economy is expected to grow by 3.38% in 2024, while the IMF projects growth at 3.1% for the same year. As of July 18, 2024, external reserves stood at $37.05bn, representing 11 months of import cover for goods and services.”

However, analysts at Afrinvest voiced concerns over the CBN’s optimism regarding the Federal Government’s stop-gap measures to control food inflation. “We have reservations about the 150-day duty-free import window’s ability to temper food prices substantially. Without addressing the rising cost of logistics, fuelled mainly by high energy prices and insecurity, the policy’s impact would be short-lived,” they argued. Additionally, Afrinvest pointed out the lack of a formal model to ensure that beneficiaries of the duty-free window sell staple items at fair prices nationwide.