BANKS AND DECEASED CUSTOMERS’ FUNDS
A legislation for access to the bank accounts of deceased ones by families is urgently needed
of having a Will in case of sudden, unexpected death, it is unconscionable that many commercial banks in the country are still making life uncomfortable for the families of deceased people. We urge the National Assembly to liaise with the Central Bank of Nigeria (CBN) and other critical stakeholders with a view to coming up with a legislation that will protect the families of deceased bank customers from forfeiting the money left behind in their accounts. This is especially important for widows and children and poor people who do not have the financial wherewithal to engage expensive lawyers that would only compound their loss.
By its definition, a dormant bank account is one that has no customer or depositor-initiated transaction for a period of six months. Since dead people cannot operate their accounts, it stands to reason that such accounts would be dormant for a period of time. And because of that, the next of kin to many deceased bank customers go through harrowing experiences trying to access the money left in such accounts. Yet, there are no laws restricting the banks from providing Pay on Death (POD) service to established families of their deceased customers.
The concern here is that Nigerian banks are increasingly becoming notorious for mounting several roadblocks to frustrate survivors of deceased account holders. To access such funds in bank accounts, too many stringent conditions, most often to frustrate the families of deceased account holders. We understand that probate will be required where a deceased died testate (leaving a will), just as a letter of administration is also required where the deceased person died intestate (without a will). For inexplicable reasons, many families have complained of difficulty in securing letters of administration, and even when they obtain one, banks begin to list other conditions that are difficult to meet. With millions of survivors made to forgo funds in the bank accounts held by their loved ones, the amount of unclaimed funds in commercial banks is estimated to be about N1.3 trillion.
We believe that the increasing advocacy for a legislation to mandate banks to provide Pay on Death (PoD) form to every account holder is not only timely but necessary and urgent. With such legislation, it is expected that banks will be required to contact beneficiaries named by account holders in their PoD before or when such accounts go dormant and transfer the funds to them, after establishing the genuineness of their claims. This will mitigate the hardship that many families and beneficiaries of deceased account holders face in procuring letters of administration.
There are lessons we can learn from other countries. India is a prime example. In the Finance Bill 2023 which replaced the law of 1873, Prime Minister Modi proposed an amendment to the Government Savings Promotion Act to streamline who will get the funds if a depositor dies without nomination. With its passage, payment of the available balance in the account is now made to the person legally entitled to receive it if the account holder dies without declaring his nominee. Many other countries have defined laws about deceased bank depositors so that members of their immediate families would not have to suffer needlessly. We can’t afford to be different.
Given what many families go through in the hands of callous bank executives, there is an urgent need to enact a legislation to ensure easy access to the bank accounts of their deceased ones. Unfortunately, the CBN that should be helping these distressed families is more interested in mopping up the funds left behind by deceased customers.
