ILAPI Uncovers GH₵167. 8M, $14.6M In Dormant Accounts With BoG

The Institute for Liberty and Policy Innovation (ILAPI), has uncovered large amounts of money in different currencies sitting in dormant accounts with the Bank of Ghana (BoG).

The amounts involve over GH₵167. 8 million, US$14.6 million, as well as over £ 2.4 million and € 2.3 million, all accumulated between 2016 and 2023, in dormant accounts with the Central Bank.

This information, was contained in a release by the Institute issued on Tuesday, November 5, 2024, and signed by its Executive Director, Peter Bismark Kwofie.

The report also revealed that, between 2021 and July 2024, dormant accounts transferred to the BoG, stands at 1,448, 660.

This came to light after ILAPI, petitioned the BoG, demanding a detailed report of total amount of money accrued from inactive accounts from various financial institutions from a period spanning 2016 to 2024.

The release, which also touched on Next of Kin (NOK) disclosed that ILAPI, started the NOK project in 2023, but the Institute was quick to explain that, the concept, as a point of contract, and beneficiaries to access moneys of the deceased person at financial institutions like the bank, travels beyond the law.

The Institute, said NOK concept, is still difficult even while using the complex legal process, especially if the deceased family member did not have a Will.

“Legalities in accessing the unclaimed funds with regards to the legal complexities such as securing the Letter of Administration (LA), Death Extract, and lengthy probate processes, the procedure of accessing funds might involve navigating complex legal procedures, especially if there is no Will or clear documentations of the deceased’s assets, funds could be locked up with the banks, insurance, and pensions firms,” the Institute explained.

ILAPI said in its research report commissioned in 2023, it became apparent that when it comes to insurance, banks and pension funds, over 95 percent of respondents, complained about its tedious nature, while 70 percent abandoned the process, leading to these funds remaining in these dormant accounts for as long as it can when it could have been claimed to support families and loved ones to better their lives.

The inability of families going through the process due to it laborious nature, forces these financial institutions which are required by law to transfer these funds to the BoG, when the accounts remain inactive for a five (5) year period.

Recall that in 2021, the Bank of Ghana, issued a directive on unclaimed balances and dormant accounts for banks and specialized deposit-taking institutions.

The directive sought to ensure that balances in accounts that have been left unattended to for a period of time, are managed under a special account.  The account is referred to as the dormant account register.

Section 143 of the Act, classifies a dormant account as one with a time deposit account with no customer-initiated activity by the account holder or a third party on the account holder’s behalf for a period of two years.

Such funds are transferred to the Dormant Account Register (DAR) of the Banks. The report argued that, some of these funds could belong to the deceased who die in traffic road accidents, floods, among others, as in most cases families are unaware.

Through no fault of theirs, funds that could have taken children, spouses, and families out of poverty, are kept with the regulated financial institutions, and Bank of Ghana in the name of dormancy.

Unfortunately, the laws do not permit the BoG to trace families to help them access funds of the dead. Meanwhile, some of these beneficiaries, depended on their deceased relatives for education and economic survival and many more.

This leads family members, who could have accessed these funds truncating their education and involving in social vices and abject poverty, becoming a burden on the society.

The report by ILAPI, acknowledged the fact that the central bank, is doing it bit on educating the general public on the need to pick a Next of Kin and the benefits there in, but it demanded that more be done, “to understand that countless families face financial constraints, and the failure to claim the funds of the dead only exacerbates the poverty levels among families in Ghana”.

It asked that the Bank goes a step further beyond the current literacy campaigns and actively deploy ways to identify and contact the beneficiaries and Next of Kin by amending the existing laws and policies.

Also, the release, urged the Bank of Ghana, to issue directives instructing all banks that the Ghana Card of the Next of Kin during account opening should be mandatory to avoid identity crises and reduce the long timelines during the investigations on the dead.

It also suggested that, clearly defined policies on the management of dormant accounts and transparency on how these funds are managed, be made available to the public to engender confidence and trust among these families.

ILAPI, also advocated for a review of the current law to allow BoG trace families, Next Of Kin of these dormant accounts and also an annual report on dormant accounts and funds received be released or be a part of the BoG’s annual reports.

“BoG should also use the national identification systems, and collaborate with local government bodies to identify beneficiaries or the next-of-kin of dormant accountholders. Unclaimed funds of dormant accounts should have a specific number of years the BoG could keep. A policy should be considered to trace families to access funds through recognized administrative and legal processes with a harmonized system. ILAPI takes cognizance of BoG’s literacy campaigns on the Next of Kin.

However, the application of the aforementioned measures will help the BoG address both transparency in financial governance and alleviate people from economic challenges faced by families who are unknowingly eligible for these funds. It is essential that the BoG demonstrates leadership and ethical stewardship in addressing these critical issues to ensure economic prosperity and human dignity”, the report said in conclusion.

The Institute for Liberty and Policy Innovation (ILAPI), embarked on this project to reduce inheritance poverty, and improve human dignity.

Source: Anchorghana.com