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Finance Act: FG gets legal backing to borrow from dormant bank accounts

The Federal Government through the Finance Act 2020 recently signed into law by President Muhammadu Buhari, has obtained backing to borrow from bank accounts un-opperated for about six years and unclaimed dividends.

The law made the Unclaimed Funds Trust Fund a sub-fund of the Crisis Intervention Fund.

According to the Act, “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 however exempts official bank accounts owned by the federal government, state government or local governments or any of their ministries, departments or agencies.

The act also states that the monies transferred to the trust fund will be a “special debt owed by the Federal Government to shareholders and dormant bank account holders”.

The law also states that the original owners of the money can claim it at any time

According to a report in The Cable, the operation of the trust fund will be supervised by the Debt Management Office (DMO) and governed by a governing council chaired by the Finance Minister and a co-chairperson from the private sector appointed by the President.

This move will make needed funds available to the federal government without foreign exchange worries or conditions attached to loans from multilateral lenders.

Other members of the governing council shall include the governor of the Central Bank of Nigeria (CBN), director-general of the Securities and Exchange Commission (SEC), managing director of the National Deposit Insurance Corporation (NDIC), a representative of the registrars of companies, two representatives of the shareholders’ association, a representative of the Bankers’ Committee and the director-general of the Debt Management Office as the secretary of the trust fund.

(TheCable)

Written by ExpressDay

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