The Nigeria’s Dormant Bank Account and Unclaimed Dividend Bad Policy

The Nigeria’s Dormant Bank Account and Unclaimed Dividend Bad Policy

When I started my banking career many years ago in Nigeria, I opened  a savings account with Union Bank. I left a standing instruction to run on perpetuity on an instrument therein. But with the new playbook that Nigeria is looking for dormant bank account balances and unclaimed dividends to fund our mindless bureaucracy, I have just informed Union Bank that “I dey here kampe”. Indeed, in Nigeria’s playbook, if you have a bank account and you have not done anything on it for 6 years, you have possibly forgotten it! Why is that a government’s problem?

If they are worried that some deceased people’s wealth is lost to banks, then, they need to make laws, mandating banks to contact the person or the next of kin before getting the government involved. In the US, it is automatic, once the owner is deceased, the bank moves the value to the next of kin. And if that next of kin does not exist, it goes to the next of kin’s track.

“Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or unutilised 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 read.

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

Also, those useless stocks we all bought ten years ago, during the boom, have been earning dividends. Now is the time to write to the companies that “you dey” in case you are like me who have not cared about those 10k per share dividends; one insurance company declared 2k per share! 

If you waste time and Aso Rock gets hold of the funds, they are gone forever. Nigeria uses 60% of its revenue to service debts. There is no business in the world that can survive with that model. I mean, I am not an accountant, but I passed ICAN’s Intermediate exam before I left banking. If your cost of capital is that high, you have no future.

Do not allow Nigeria to get hold of your money; talk to your bank or stock broker NOW.

Nigeria data

Follow these steps to claim your Dividend

Unclaimed dividends increased from N109.1 billion in December 2016 to N130 billion in December 219

Search if you or your loved ones have unclaimed dividends using Security and Exchange Commission Portal and  claim your dividends with these steps.

Step 1: Input your first name and last name into this link http://sec.gov.ng/non-mandated/ to get a list of your shares from SEC. This will give you a screenshot of all the companies you have shares in, and the registrars in charge.

Note: if you have changed your name due to marriage or other reasons, search with your previous name and also try different format of name e.g those with prefixes e.g ‘Olu’, ‘Oluwa’ etc

Step 2: Take note of your registrar’s name. A registrar, is the company that keeps the shareholder’s details for other companies. So, your shares could have data with different registrars.

Step 3: Download and fill your registrar’s form which is beside the company’s name on the website.

Step 4: Submit your form. Some companies require you to go to your bank and get a bankers confirmation, so they can initiate the e-dividend form for you.

Once this is done, your account will be credited automatically with the e-dividend going forward.

Nigeria’s 60% Debt Service to Revenue Ratio And Push To Borrow from Unclaimed Dividends, Dormant Bank Balances

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4 thoughts on “The Nigeria’s Dormant Bank Account and Unclaimed Dividend Bad Policy

  1. But this is how criminals think? Or they want to use government gab to make purely criminal thought process look legitimate?

    There are thoughts that don’t cross the minds of noble and honourable men and women, but when you are morally debased with filthy mind, every postulation seems credible to you.

    How many people will remember where they bought shares and the unclaimed dividends? The paperwork people did at the point of purchase, shouldn’t it be means to contact each buyer and pay what is due to the person? Now we want people who freely entered into transactions to start running around, searching for unclaimed dividends; why are we so criminally inclined? It’s incredible! I just searched my dad’s name, and it popped up, so, I should start digging for how many kobo or naira that was unclaimed? No chance!

    Government has always been the most sophisticated criminal enterprise anywhere in the world, but here, both individuals and entities are doing everything possible to outdo each other, when it comes to stealing from common people.

    Strange land, with lots of funny creatures.

    Reply
  2. Prof, I write this response as your student [Tekedia] and as one who hold you in high esteem.

    I was shocked to read the following line in your piece: ‘If you waste time and Aso Rock gets hold of the funds, they are gone forever’.

    Prof, this is misleading and untrue in view of the statement put out by the respective arm of government to explain the new policy.

    I was wondering how you conveniently missed out the part of the policy that says ‘….. as a special debt to the Federal Government to be managed by the Debt Management Office and shall be available to the shareholder or account holder at any time together with the yield thereon.’

    Yes, govt might be expending 60% of revenue on debt servicing, but that is a pointer to
    1). the fact that govt is still solvent [else it won’t be granted thos loans in the first place]

    2). this govt has integrity; it pays back it loans.

    These two points should put anyone with dormant accounts or unclaimed dividends at rest that govt will follow through on its words to repay with interest WHENEVER such funds are requested or recalled.

    So, I think people should be encouraged to earn interest of their usless [sic] stocks, the type you bought 10 years ago, rather than tell them to go claim it while painting govt intentions bad.

    If such remains in the bank, dormant, or unclaimed [dividend] or in govt coffers, it still remain the monies of the original owners. It is still theirs even in govt hands, and just as accessible.

    Govt is not using underhanded method for this. As one who had worked in a bank, you know banks won’t just let govt pounce on depositor monies without going through proper process.

    If anything, govt is transparent about this process, so with all these said, I don’t see the need for the tone with which you wrote this piece, and even calling it a ‘bad policy’.

    Just my 2 cents sir.

    Reply
    1. “I was wondering how you conveniently missed out the part of the policy that says ‘….. as a special debt to the Federal Government to be managed by the Debt Management Office and shall be available to the shareholder or account holder at any time together with the yield thereon.’” – that is actually the point. If you have N60k in that account and you need it from the DMO, it may need you to travel to Abuja 10 times for it. By the time you look at the cost, you will forget the money. My point is this: many have abandoned their small pensions because the cost to pursue and get the pension is more than the value. For most Nigerians, dividend is a very small amount. Going to DMO is not an easy thing if you were not able to get it from your registrar. I stand by that statement because for more than 90%, they will give up on that money.

      “Yes, govt might be expending 60% of revenue on debt servicing, but that is a pointer” – there is nothing to respond. I made a statement of fact. You can use the same data to conclude anything you want. But any business that uses 60% of its revenue to service its debt is not well managed. It does not matter if the government is solvent or not.

      “usless [sic] stocks” – not sure what you mean by ‘sic” as I wrote “useless”, not “usless”. You introduced “usless”.

      In any financial form in Nigeria, there is a next of kin line. Government can make a law that forces banks and registrars to activate that, after 6 years. Then, after 20 years, the money can be warehoused in government if the next of kin was not accessible. That was my proposal in another piece on a better approach. 6 years is just a small time for government to show up.

      Reply
  3. This govt pays its debt. Granted it is so. Will this govt be in power forever?
    The truth is that no one trusts Nigerian govt. Chikena!
    Prof’s argument in terms of the stress to get your money back is tenable.

    Reply

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