An estimate of over N100 billion in deposits left by bank customers who are deceased is trapped in dormant accounts in the banking system alone, with prospective beneficiaries unable to access it.
This is in addition to the funds stuck with insurance companies, mutual fund operators and the stock market.
Findings revealed that the banks have continued to trade with the money while the deceased persons’ next of kin are denied access to the funds due to the cumbersome process they are subjected to in their efforts to lay claim to such estates.
Financial experts blamed the situation on loopholes in the nation’s legal system as the cumbersome processes of obtaining legal documents have for long been working to the advantage of the banks.
In an exclusive interview with LEADERSHIP yesterday, former president of the Chartered Institute of Bankers of Nigeria (CIBN) and managing director/chief executive of Maxifund Investment and Securities Ltd,
Mazi Okechukwu Unegbu, said that the nation’s laws in this respect are to the advantage of the banks who prefer to hold on to the funds.
He explained that the provision of the law is for the next of kin to present the death certificate and a letter of administration to the bank in the case where the deceased left no will, and noted that the process of obtaining the letter of administration is so cumbersome that some next of kin are frustrated and abandon the process altogether.
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“If a person dies without a will, the next of kin must process the letter of administration, and it is not an easy one to crack.
“First of all, you have to face the very lackadaisical attitude of the people working in the probate registry where you have to process the letter of administration, then you have to contend with government taxes because you have to pay death tax on whatever the deceased has.
“All this is very cumbersome and it doesn’t come out early; you can be there for months because it is as if you have a court case and by the time you are able to access the fund, it has lost value because it has taken a long time and inflation has eroded it,” Unegbu stated.
Continuing, he said: “It is not easy; that is why I will suggest that there should be some changes in the legislation. The National Assembly can look at some of these things so that people can access the funds of their deceased, to take care of either the children or some other liabilities they have to make.
“There is the need to have a change in the law by the National Assembly; so that instead of insisting on certain prerequisites which are very difficult to provide, they can make it in such a way that once you are the next of kin, you can access the funds subject to some conditions.
“You must be able to identify other people who are entitled to the assets of that person and the money in the bank. If you do that, you can now make sure those funds can be released, otherwise you cannot access those funds and the banks will continue to use them and no one can ask them any question.”
The former CIBN president, a lawyer himself, also noted that for some next of kin, their unreadiness to pay tax also contributes to their inability to access the funds left by the deceased customers.
He, however, noted that some banks release some funds to the family for the burial but will not allow any access to the funds outside that unless the conditions provided by the law are met.
Unegbu further asserted that on the part of the banks, when the next of kin is unable to provide the necessary documents, there is nothing they can do.
“In fact, they will be happy because they are depending on the law, because that is what the law provides for them. Some banks are however sympathetic; if they know the next of kin and it is not someone that is fraudulent, they normally release some funds for that person to be able carry out the burial of the deceased, but after that they won’t do anything outside what the law provides.
“This is because there have been cases where banks paid to a next of kin and then other people started appearing, claiming that they are real next of kin, and then the bank will be saddled with that liability of the funds paid without authorisation from the real owners.”
