What do Nigerian Banks do with Dead People's Money?

Posted by Felix Okoli on Saturday June 11, 2016 at 21:11:49:

There is a growing amount of money being abandoned in savings and current accounts in Nigeria and one of the main reasons why they are abandoned is because they belong to dead people. Yes, some Nigerians have kept their money in local banks but died thereby leaving the money in the bank. What happens to the money those dead people leave in banks?

I'm sure that if there is a serious audit of the value of funds left in the Nigerian banking industry by the dead, the value would run to billions of Naira and the worst thing is that not all their relatives actually know about the money.

When a person has kept money in the bank and dies, what I've noticed is that the bank doesn't even make any move to return the money to the next of kin without the next of kin of dead person's relative making the move first.

If your parents, siblings, husband or wife dies and has money in the bank, it is normally a long process for you to get the money and the money may even be lost if the deceased person's relative didn't know about the money. The only thing I've noticed is that the bank may send their staff to visit the person's last known address if it's a significant amount of money to inquire why the account has been dormant for a while. If they did find out that the account holder has died, they don't automatically return the money to the next of kin listed in the person's account without the person going through a long court process to get a letter of administration.

A letter of administration is something the account holder's relative or next of kin will have to first get from the court using a death certificate of the person and the services of a lawyer. The person will also have to pay some fees which could be about 10% to 30% of the money held in the account. SO, if the person has about N1m in the account before he died, one seeking a letter of administration may end up spending as much as N200k just to get access to the funds.

The process takes quite a long time and in some cases may take 1 or 2 years and one wonders why the banking system and Nigerian law makes it so hard to get that money even though the person is listed as the next of kin. It would have been better if the dead person didn't leave any money in the bank but rather has other assets of high value like cars, houses and jewellery. I guess this is one of the reason why many Nigerians don't like keeping most of their wealth in the banks because it's hard for their families to get it out when they die.

During the period of time when a dead person's money is in the bank and the relatives are still unable to get the money out, the banks use it for business as it contributes to the funds they have for issuing loans at exorbitant rates to their debtors. It's so easy for a living person to put money in a bank account in Nigeria but very hard for one's surviving relatives to get it out after the holder dies.

Some dead people's money never leave the banks because they are no relatives that know about it and I guess banks where this is most common includes the old generation banks that we have in Nigeria but some new generation banks are a bit involved too.