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Introduction
In the context of this article, unclaimed funds include unclaimed dividends from shares in public companies and dormant bank account balances. Such funds often pile up because the owners have forgotten about them, beneficiaries are unaware of the existence of the funds and forget to claim them after the owner's death, cumbersome claim process and lack of investor awareness and education.
As of June 2025, the Securities and Exchange Commission (SEC) reported that ?242 billion in unclaimed dividends was lying idly in the Nigerian capital market,1 marking an increase from ?190 billion in 2023 and ?215 billion in 2024. Additionally, the Nigeria Inter-Bank Settlement System (NIBSS) revealed that in 2024, there were over 19.69 million dormant accounts,2 equating large sums that remain untouched.
The Unclaimed Funds Trust Fund (UFTF) was introduced under the Finance Act, 2020 to provide a means for the federal government to consolidate and put these funds to use, and most importantly return these funds to their rightful owners upon claim.
This article analyses the legal framework for unclaimed funds and the steps that can be taken to recover unclaimed funds in Nigeria.
Legal Framework
Investment and Securities Act
The investment and securities Act, 2025 empowers SEC to regulate the treatment of unclaimed dividends of public companies.3 Pursuant to this power, the SEC issued the circular titled "Circular To Paying Companies, Capital Market Stakeholders and the General Public On The Treatment Of Unclaimed Dividends Of Public Companies" (the Circular), directing public companies and their Registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends "pending the setting up and operationalisation of the UFTF by the Federal Government". This directive, however, only applies to shares that were not statute barred before the Finance Act, 2020 came into effect.
Finance Act 2020
The principal legislation establishing the UTFT is the Finance Act, 2020 (the ''Act''). The Act sets out the structure, source of funds and the role of the debt management office.
Key provisions of the Act with respect to UTFT are as follows:
Establishment and Sources of Fund
The UTFT was established under Section 77 (1) of the Act, as a sub-fund of the Crisis Intervention Fund. It was created as a perpetual trust, to ensure that funds remain accessible to owners at any time. The funds in the UTFT are sourced from unclaimed dividends belonging to shareholders of public limited liability companies quoted on the Nigerian Stock Exchange and dormant bank balances that have remained unutilised for a minimum period of six years. Certain exemptions apply to this provision, as it does not extend to official bank accounts owned or belonging to the Federal, State or Local Governments or their Ministries, Departments and Agencies.4
It is important to highlight that prior to the Finance Act, unclaimed dividends remained claimable for 12 years, after which they became statute-barred and were added to the company's distributable profits5, but the Act amended the relevant section of the Companies and Allied Matters Act so that unclaimed dividends of public companies were transferred into the UFTF 6 years after declaration of same.6
Nature of the Funds
Once the unclaimed funds are transferred into the UFTF, they would be treated as a special debt owed by the Federal Government to the shareholders or bank account holders. These funds can be claimed at any time, together with any interest or returns earned on them.7
Management
Supervision and management of the UFTF is the responsibility of the which operates the UFTF in conjunction with the Central Bank of Nigeria and SEC10. The duties of the DMO include maintaining a reliable database of all unclaimed dividends and dormant balances, reconciling this information with SEC and CBN on a bi-annual basis, liaising with registrars, banks and NDIC for repayment arrangements, preparing financial statements for audit by the Auditor-General, implementing management plans including guidelines, sinking funds to meet obligations and managing financial risks and currency exposure.11
Central Bank of Nigeria
The Central Bank of Nigeria (CBN) through its "Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria" (the "Guidelines") regulates the management of unclaimed funds in financial institutions under CBN's purview.
Creation of Pool Account
The Guidelines provide for Unclaimed Balance Trust Fund (UBTF) Pool Account, a dedicated account created by CBN to warehouse funds from accounts that have remained dormant for up to ten years.12
Eligible Accounts
The Guidelines specify the types of accounts and balances eligible for transfer into the UBTF pool account once they have remained dormant for at least ten years. An account is considered dormant when it has remained inactive for a period of at least one year and is classified as inactive when it has had no customer-initiated transaction for a period of six to twelve months.
Accounts eligible for transfer to the UBTF pool account include current, savings and term deposit accounts in local currency, domiciliary account, prepaid card accounts and wallets, government accounts13, unclaimed salaries, wages, commissions, and allowances, judgment debts payable by financial institutions, and any other balances designated by the CBN. The exempted accounts include those under litigation or investigation, judgment debts that remain in dispute, and those encumbered by liens or collateral.14
Stakeholder Duties
Public companies, registrars, and deposit money banks are required to transfer unclaimed dividends or dormant funds into the UFTF.15 Any public company or deposit money bank that fails to comply with this duty commits an offence and is liable upon conviction to a fine not less than five times the value of the unclaimed dividends or dormant balances, together with accumulated interest calculated at the Central Bank of Nigeria's Monetary Policy Rate.16
While the legal framework is in place and effective,17 there is no public evidence confirming that the UTFT is operational. In fact, on 5th May, 2025, the SEC issued a circular to publicly listed companies on unclaimed dividends, which indicate that the UTFT is not yet operational.
Duties of CBN
The CBN oversees the UBTF pool account through its management committee, ensures the investment of funds, and publishes the names of owners of unclaimed balances on its website and in national newspapers annually18. The funds transferred into the UBTF pool account are invested in Nigerian Treasury Bills and other securities approved by the management committee, with both principal and interest (if any) refundable within 10 working days upon valid request.19
Duties of Financial Institutions
Financial institutions are required to notify customers of inactivity immediately it occurs and subsequently on a quarterly basis, as well as publish details of dormant accounts on their websites six months before they qualify to be transferred to the UBTF pool account.20 They must also publish the list of dormant accounts in their records in national newspapers the list of dormant accounts in their records annually. Unclaimed balances are to be transferred to the UBTF pool account quarterly, within fifteen days of the new quarter, and detailed records of all dormant accounts must be kept for at least ten years after transfer. Additionally, financial institutions must reactivate dormant accounts within three working days of receiving request by the customer, free of charge,21 and are responsible for processing and forwarding valid request to reclaim funds to the CBN.
Duties of Account Owners
For account owners and beneficiaries, the Guidelines place responsibility on them to keep their personal and contact details updated with their financial institutions.22
Access and Recovery of Funds
Who Can Claim?
The funds can be claimed by shareholders or account holders themselves. Claims can also be made by legal representatives of deceased persons shareholder or account holder (executors of wills, or administrators with letters of administration). Where the legal representatives apply to claim, they will be required to present the proof of their authority to claim e.g., grant of probate, letters of administration.
How to claim
Unclaimed Dividends
In an effort to simplify the procedure for claiming dividends and curb the increase in unclaimed dividends, the SEC created a self-service portal, e-Dividend Mandate Management System (e-DMMS) Portal, that allows shareholders apply to mandate their accounts for e-dividend virtually, without having to visit a Registrar or a Bank. The shareholder's stockbroker can also assist in the process of recovering unclaimed dividends from the company or registrar.
Unclaimed Balance
The owner must identify their name on the list of unclaimed balances published by the CBN or the financial institution in question. They are then required to visit their financial institution and complete an Asset Reclaim Form. Along with the form, the owner shall provide valid identification, proof of address, and affidavit on the accuracy of the information to reactivate the account.
The financial institution will have 10 working days to verify the documents submitted and forward the application to the CBN. The CBN shall refund the principal balance together with any accrued interest through the financial institution within 10 working days of receipt of the financial institutions request.
Conclusion
The legal framework on unclaimed funds in Nigeria reflects attempts to balance national interest with private rights. From the provisions of the Finance Act, 2020, which established the UTFT, to the SEC's oversight on unclaimed dividends and the CBN guidelines on unclaimed balances in dormant accounts, the laws seek to provide structure, and safeguards in the management of such funds. While the measures are geared towards putting unused funds to use for national development, their success depend on efficiency in processing claims, which reflects respect for constitutional property rights and continuous public sensitisation to ensure that owners do not misinterpret them as government's attempt to seize private funds indefinitely.
Footnotes
1 https://thesun.ng/sec-seeks-recovery-of-n242bn-unclaimed-dividends-with-new-enforcement-push/
2 https://punchng.com/cbn-probes-19-7-million-dormant-bank-accounts/
3 Investment and Securities Act 2025, s 3(4)(v)
4 Finance Act 2020, s 77(1)
5 Companies and Allied Matters Act 2020, s 432
6 Finance Act 2020, s 60
7 Ibid s 77(11)
8 Ibid s 77(3)
9 The DMO is a federal government agency, established under the Debt Management Office (Establishment) Act, 2003 to coordinate the management of Nigeria's debts, including those of the federal government, state government and any of their agencies.
10 Finance Act 2020, s 77(7)
11 Ibid s 78
12 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria para 5.1 (Central Bank of Nigeria, 2024)
13 This is a contrast from what obtains under the UTFT, which exempts government accounts from the sources of its funds.
14 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria para 4 (Central Bank of Nigeria, 2024)
15 Finance Act 2020, s 77(4)
16 Ibid s 77(10)
17 The Act became effective on the 1st of January, 2021
18 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria, para 5.1 (Central Bank of Nigeria, 2024)
19 Ibid para 7
20 Ibid para 5.3
21 Ibid para 8.0
22 Ibid para 5.4
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
