The Institute for Liberty and Policy Innovation (ILAPI), in its quest to reduce inheritance poverty, and improve human dignity, has uncovered the huge sums of money sitting in a large number of dormant accounts with the Bank of Ghana (BoG).
There exist with the BoG, over GH¢167. 8 million in local currency and over US$14.6 million in dormant accounts. There is also over GBP 2.4 million and EUR 2.3 million, accumulated between 2016 and 2023. Again, between 2021 and July 2024, dormant accounts transferred to the BoG stand at 1,448, 660.
This was unearthed in a document made available to ILAPI by the BoG after the latter was petitioned to provide a comprehensive report on the sums collected from inactive accounts over the period of 8 years (2016 – 2024).
ILAPI’s Next of Kin (NOK) project has been running since 2023. The concept of the NOK as a point of contact, and beneficiaries to access funds of the dead at financial institutions goes beyond legality.
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 probate process can be time-consuming, involving court proceedings and administrative tasks, delaying access to the funds.
In the research report commissioned in 2023 by ILAPI to streamline the administrative processes to access funds of the dead within the recognized legal procedures at the Banks, insurance and pension firms, over 95% respondents indicated that it is cumbersome, and 70% abandoned the process, plunging the entire family into poverty. Accordingly, the dormant accounts and its funds at the regulated financial institutions are transferred to the BoG when the accounts become inactive for a period of 5 years. Pursuance to Section 92 of the Banks and Specialized Deposit-taking Institutions
Act, 2016 (Act 930), the BoG in February 2021, issued Unclaimed Balances and Dormant Accounts Directives to all Regulated Financial Institutions. 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.
We believe some of these funds could belong to the deceased who died in road traffic accidents, floods, and among others, and in most cases families are unaware. 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. The Laws do not permit the BoG to trace families to help them access funds of the dead.
It is important to recall that some of these beneficiaries depended on their deceased relatives for education and economic survival. Therefore, their inability to access the funds denote they have to drop out of school and strive to survive on their own, which could push them into social vices and poverty.
It is also evidence that the Bank of Ghana has made strides in educating the public on the importance of appointing a next of kin and the relevance of next of kin on financial documents, which is commendable. Nevertheless, more proactive measures are needed 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.
What ILAPI Demands from BoG and government
- BoG to go beyond its ongoing literacy campaigns and actively engage in identifying and contacting the beneficiaries and Next of Kin by amending its laws and policies.
- BoG to issue directives to all banks that the Ghana Card of the Next of kin during account opening should be requested to eschew identity crises and reduce the long timelines during the investigations on the dead.
- Clearly defined policies on the management of dormant accounts and transparency on how these funds are managed should be made available to the public to enhance confidence and trust.
- A review of the law to allow BoG trace families, next of kin of dormant account
- An annual report on dormant accounts and funds received could 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. The BoG must demonstrate leadership and ethical stewardship in addressing these critical issues to ensure economic prosperity and human dignity.
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