Finance Act 2020 Empowers FG To Borrow Money In Bank Account That Is Left Unspent For Six Years

Unclaimed dividends and bank account balances unattended to for
at least six years will available as special credit to the federal
government through the Unclaimed Funds Trust Fund.

According to the Finance Act 2020 recently signed into law by
President Muhammadu Buhari, the trust fund will be a sub-fund of
the Crisis Intervention Fund.

“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.

According to the act, the monies transferred to the trust fund
will be a “special debt owed by the federal government to
shareholders and dormant bank account holders”.

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

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.

Culled from Thecable

Unclaimed dividends and bank account balances unattended to for
at least six years will available as special credit to the federal
government through the Unclaimed Funds Trust Fund.

According to the Finance Act 2020 recently signed into law by
President Muhammadu Buhari, the trust fund will be a sub-fund of
the Crisis Intervention Fund.

“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.

According to the act, the monies transferred to the trust fund
will be a “special debt owed by the federal government to
shareholders and dormant bank account holders”.

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

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.

Culled from Thecable