Banking in an environment where most customers are ignorant of the law portends much danger. Recently, issues of unclaimed bank deposits have returned to the front burner of public discourse. It is always a sad event for anybody to lose a loved one. Such incidents are usually characterised by emotional distress, which usually have adverse effects on the affected
parties. The next-of-kin of deceased bank account holders have continued to lament their ordeals in attempting to access funds left behind by their departed loved ones. These, according to them, have brought untold hardship to them and are becoming disincentives to save with banks. In this write up,WILLIAM ANAEBONAM, FRIDAY EKEOBA, KEHINDE ADEGOKE and BENJAMIN OMOIKE examine the whole process involved in retrieving deceased customers’ funds, and attendant implication for the bottlenecked procedures .
It is a well-known fact that many people prefer to keep their bank account, and other financial transaction details secret and hidden from even their spouses and close relatives. This poses its own problems when the unexpected happens. In a situation of this nature, the money left over by the deceased is left to the dictates of the bank where the money is domiciled.
Actually, the account remains active until the bank is advised to close such an account and an attempt is made to retrieve the balance through an official request following laid-down legal processes. In an event where no formal demand is made, the bank continues to make use of the funds for its official business and pays the stipulated commissions and interests as required by law.
According to Barrister Pat Anyadubalu, a legal practitioner and author of Banking Law and Mortgages in Nigeria, ‘‘the bank can only pay money on demand, and this is possible only when the relatives know that there is money in the account.’’ He added that, ‘’the bank has every right to make use of the money in their custody and pay interest as appropriate.’’
Over the years, the account of deceased customers in banks have continued to mount to the tune of several billions of naira and sometimes, denominated in other currencies, especially in cases involving foreigners.
The truth is, the next-of-kin of deceased bank account holders have continued to lament the ordeals they go through in accessing money left behind by their departed loved ones. These, according to them, have brought untold hardship to them and are becoming disincentives to save with banks.
Investigation revealed that next-of-kin of account holders (who died without a Will go through terrible situations when they visit banks to collect the money left behind by deceased persons. This has left a huge amount of money running into billions in bank vaults as dormant accounts.
They have, therefore, called for the intervention of the Central Bank of Nigeria (CBN) and other regulatory agencies of government in the ever-increasing amount of money in dormant accounts leaving beneficiaries in penury while the banks continued to trade with the money that is now alleged to be well above N100 billion.
For instance, one, Mr. Eroms Adigwe, who narrated his ordeal to Vanguard Newspaper, said: “I have a sister who died on November 11, 2008, and when I went to her bankers, First Bank of Nigeria, to claim the N120,000 she had in her account as her next of kin, they told me to produce a Letter of Administration before I can have access to the money. I went to Lagos State Secretariat at Alausa, Ikeja, to seek for the document and I was asked to pay N24,000 and I complied. I took the receipt to the High Court in Ikeja so as to obtain the Letter of Administration.
“When I got to the court, a file was opened for me and they said I needed to see some officials to sign the document and they kept tossing me from one person to another, and sometimes they would inform me that the person to sign the document was not available. The court officials kept telling me to check back subsequently.
“The most terrible thing is that any person you meet, he or she would demand for money from you. This, I did for over seven months without success. So, I was eventually frustrated when at a time I was asked to produce four persons that were related to me as witnesses. So I left pursuing the case in July 2009 till date.
My sister’s children are still very young and are in school, all I wanted to do was get the money and use it to assist them, but that has not worked out. My younger ones and I are the ones taking care of my sister’s children up till now.”
In her own experience, Mrs. Isabelle Omatseye, a fish farmer, who lost her father sometime ago, said: “Shortly after the demise of my father, as the first child, I did approach my father’s bank to inform them that their customer who coincidentally was my father had died. The bank empathised with me and asked me to put it into writing, which I did. Thereafter, I was told to approach a Lagos High Court to get a Letter of Administration before my father’s money could be released to me since my father did not write a Will, despite the bank’s confirmation that I was his next-of-kin.
It took the probate section of the court over one year to issue the Letter of Administration that would enable me to collect the money, because of the long procedure involved in getting all the necessary documents, before the money could be released since there was no written Will.”
Omatseye said that after the probate section of the court had taken such a long time to issue the Letter of Administration, the banks also took their own turn in ensuring that she went through another round of procedure before she eventually got the money.
Many other victims who did not want their names mentioned have narrated similar pains they go through in securing Letters of Administration.
A top management member of a third generation bank, who spoke to Sunday Newswatch exclusively on condition of anonymity said: “Banks will never call any customer to come and collect their money because such deposits are safe while in their custodies as that is their responsibility as banks. Banks are institutions where one can place and borrow money and take care of financial affairs,” he added.
The source also said it is the global practice for banks to keep money for safe keeping; stressing that, “banks can keep money as long as possible. In fact, they can keep money and other valuables for over 100 years, but you will be paid your money anytime you demand for it. No bank will deny you of your money because they know it is unethical to do so. If any bank does so, you have the right to sue such a bank. In fact, no bank will try it.”
On what banks do with unclaimed dividends, as well as money of the deceased customers, the source simply said: “They trade with such money. They invest with such monies. That is why banks are rich,” he said.
On the issue of next-of-kin, he said: “Banks will give you your money if your next-of-kin presents necessary documents. No bank will give anybody money without relevant papers. Banks always request from their intending customers, while filling their forms, to fill in the space for the next-of-kin in the forms given to them. And where no such people come forward to ask for the money of the deceased, no bank will go out there and announce that one of its customers has certain amount of money in the bank.
“Another critical question to ask here is, how will a bank know that one, out of hundreds of thousands, or even millions of its customers has died? Therefore, someone must come forward to inform the bank of the death of any of its customers so that the bank can make necessary arrangement for the payment of the deceased’s money. Such a person must actually be the next of kin of the deceased.”
On debt payment which banks are swift to collect by any means, he said, “Banks are not always comfortable with issue of debt. They believe it is convenient for them to keep your money as that’s their solely responsibility. But when you borrow money from banks, you sign some papers, and you must also have guarantor(s), as the case maybe.
“Such people will normally be held responsible in case you default in your payment. You might also forfeit your property to such deal, because banks will always want to recoup their money. They are comfortable with keeping your money than you holding theirs. That is the fact, and it is also a global practice.” he said.
But for the president, Progressive Shareholders Association of Nigeria, Boniface Okezie, “this is one aspect of investment in the country that has been neglected for ages. The dormant and deceased account is usually been feasted on by bank executives without the knowledge of beneficiaries to the account who may not even be aware that such account existed.
“It behoves on the Central Bank of Nigeria to have full data of such amount of money rather than allow it to be used by bank executives. A pool should be set up, where such monies are deployed to for the development of the economy, if the owners of the account do not come forward after many years to claim them.
It is on hold because there is no policy towards that for now.
“I’m saying this because I understand bank operations, but those who do not understand the workings in the banks, a lot of abuse usually go on once the account is declared dormant or the account owner becomes deceased,” he said.
However, James Anka, a former civil servant, said it is against global best practice for any bank to want to create unnecessary bottleneck for its deceased or dormant account customers. He said it behoves on the bank to make it easy for their deceased customers’ beneficiaries to collect their money, but that this will always come after the necessary court process has been met.
According to him, “it’s the ethics of the banking profession for them to command a level of trust from their customers, which even in the event of death, that trust should not be allowed to vary.”
Most Nigerians actually believe in the banking culture but because of lapses and corrupt tendencies in our society, life savings are usually trapped in banks where such deceased persons’ money is kept. It was for this reason that the House of Representatives on Tuesday, April 30, 2013, at its plenary session decided to see how laws can be made to ameliorate the sufferings of people who lose their loved ones and find it difficult to access money left behind by these persons in the banks.
In a motion made and question proposed, entitled: “Need to stop the pains Beneficiaries of Dead Account Holders Go through in Nigerian Banks and Courts,” Abiodun Abudu-Balogun, representing Ijebu North/Ijebu East/Ogun Waterside Federal Constituency, different speakers spoke in support of the motion.
The House noted that sincedeath was inevitable to humans and that because of Nigerians’ savings culture; most Nigerians keep reasonable amount of their money in the banks and that some of these accounts are usually left in the banks when the account holders die. The House said it was aware that about N100bn of deceased persons’ money is presently left in dormant bank accounts across the country.
Also, that while the banks continued to trade with such monies, beneficiaries of the deceased persons lived in penury, mostly unable to feed and that it was disturbed that anytime such beneficiaries showed up to access the funds as the next-of-kin to the deceased, the banks placed official and unofficial hurdles on their ways to frustrate them.
On the part of the courts, the House felt further disturbed that instead of issuing Letters of Administration to such beneficiaries, they engage in unwarranted delays, sometimes for a period of up to one year before such Letters of Administration are issued, thereby adding greatly to the frustrations of the already traumatised beneficiaries.
The House said it was worried that the frustration beneficiaries of deceased persons go through in accessing funds of their dead relatives was discouraging people from saving with the banks, this he said, was capable of making for the collapse of the banking culture in the country.
As a way out of this malaise, the honourable members resolved to urge the Chief Justice of Nigeria to simplify the process of obtaining Letters of Administration from the courts to allow beneficiaries with genuine and straightforward claims promptly process their inheritance.
Also, for the CJN to check the incidence of delays and corruption associated with the issuance of Letters of Administration to allow for prompt payment claims to beneficiaries, the House also resolved and advised Nigerians on the need to give categorically-written instructions to their banks that in the event of death, a named person should be given access to their accounts with or without a Will or Letter of Administration.