E-Financial
Reps Probe 45m Accounts without BVN, N1.2Trn Stuck in Banks
House of Representatives’ Ad Hoc Committee on Unclaimed Funds in the Nigerian Commercial Banks and Infractions by the Central Bank of Nigeria (CBN) has begun investigation of funds stuck in the Deposit Money Banks, also known as commercial banks, due to the failure to link the account holding them to a Bank Verification Number and the Treasury Single Account policy of the Federal Government.
The committee is particularly probing into the over 45 million accounts said to be holding funds amounting to over N1.2tn.
The House had on January 26, 2022, resolved to set up the committee to investigate the “suspicious and unclaimed funds” sitting with various accounts.
The House had mandated the committee to also investigate the unremitted funds collected on behalf of ministries, departments and agencies of the Federal Government by the banks.
The House had further mandated the committee to look into the alleged “several infractions by the Central Bank of Nigeria against the provisions of the enabling Act and Laws of the Federal Republic of Nigeria and the good people of Nigeria, especially in the area of intervention projects and programs.”
The committee is to report back within eight weeks for further legislative action.
These resolutions were based on a motion moved by a member, Dachung Bagos, titled ‘Need to Investigate Unclaimed Funds in Nigerian Commercial Banks and the Infractions by the Central Bank of Nigeria,’ which the lawmakers unanimously adopted.
Moving the motion, Bagos noted that the Bank Verification Number was introduced by the CBN in 2014 to the Nigerian banking system as a way of checking and combating money laundering, illicit financing and duplicitous ownership of bank accounts used for fraud.
He also noted that about seven years after the introduction of the BVN, about 45.85 million bank accounts across Nigeria are yet to be linked to BVNs, as data released by the Nigerian Inter–Bank Settlement Systems on June 23, 2021, disclosed that the total number of bank accounts in Nigeria, as of May 2019, was pegged at 122.071 million and the active accounts, as of May, 2020 stood at 72.936 million.
On Monday, the committee was inaugurated with several invited ministries, departments and agencies of the Federal Government as well as banks in attendance.
Unyime Idem, chairman of the committee, after representatives of the MDAs made their remarks, said, “For commercial banks, this resolution stipulates that you submit documents that would help us recover unclaimed funds in about 45 million accounts that are not linked to the BVN.
“About 45 million accounts are what the House has been able to discover through the recent reports. Those accounts are not linked to BVN. So, money in those accounts, we want to know the positions, whether you have refunded the FG or what happened to the funds. You are going to give us documents to back these investigations.”
According to Idem, the committee’s assignment is “enormous, crucial and sensitive, given what the country is facing economically.”
He said, “We believe that the outcome of it (probe) would help the country to recover a very substantial part of the unclaimed funds that have been hanging in some of the Nigerian commercial banks and other unauthorized hands.
“Money meant for the Federal Government is not supposed to sit with unauthorized hands for a very long time. Any money that was disbursed or meant for the Federation Account, if the contract has failed or was not executed, the proper thing is for the money to be refunded to the same source it came from.
“But unfortunately, whether out of oversight or deliberate; for whatever reason, so much money, based on the recent discovery, has been tied down somewhere. That is what informed the National Assembly, precisely the House of Reps, to commence this investigative hearing.”
The lawmaker also read a riot act to the stakeholders, saying, “For commercial banks and other agencies that are sitting on these funds that belong to the Federal Government, that are not willing show cooperation and not willing to refund; for banks that are collecting funds on behalf of the government, I think this House would not have a choice but to stop you from collecting funds on behalf of the government if you don’t show cooperation.
“But if you do, it would be a win-win. When we look at your books and then you check the one that belongs to the government and refund it appropriately, there would not be any issue.”
Earlier while declaring the event open, Ahmed Wase, deputy speaker of the House, noted that the motion stated that about N1.2tn was not paid into the Consolidated Revenue Fund. He said the probe was necessary “so that we can improve the infrastructure deficit and other challenges in our nation.”
In his remarks, Ben Akabueze, director-general of the Budget Office, who represented Zainab Ahmed, minister of Finance, Budget and National Planning, noted that over years, there had been circulars from government authorities to those concerned to enforce the TSA and BVN policies.
Akabueze said, “When we received this invitation that talked about unclaimed funds in Nigerian commercial banks, basically, my initial reading of this was that it was related to inactive accounts, dormant accounts; because the extant regulation guiding the management of these issued by the CBN, in October 2015, provides guidelines for the management of inactive accounts dormant accounts and unclaimed funds.
“Those guidelines obligate any bank to have notified the Federal Government of the existence of any such funds belonging to it. If they had I am sure that those funds would not be there. I hope, without prejudice to the work of this committee, that the CBN would also do the job of enforcing its own guidelines.
“As the work of the committee progresses, whatever other specific information required of us as a ministry, we would be able to provide.”
International Monetary Fund (IMF) has explained why the Central Bank of Nigeria (CBN) should issue operating licences or register cryptocurrency dealers.
In its 2024 Staff Report released at the weekend, the IMF recommended that global crypto trading platforms be registered or licensed in Nigeria, like similar operators, the Bureaux De Change (BDCs), which are licensed by the CBN to carry out forex transactions at the retail end of the market.
The IMF advised that such crypto trading platforms should be subjected to the same regulatory requirements applicable to financial intermediaries, following the principle of same activity, same risk, and same regulation.
The CBN had announced that cryptocurrency traders used peer-to-peer trading to manipulate the naira exchange rate against the dollar and other global currencies.
The apex bank asserted in February that Binance, the largest cryptocurrency exchange by trading volume, had processed $26 billion in untraceable transactions in its Nigeria unit alone.
To protect the naira from value erosion and reverse the negative impact in the financial system, the CBN subsequently stopped banks and other financial institutions from banking cryptocurrency traders.
Aside several other factors causing naira’s slide, like rising import bills, medical tourism, and tuition fees payment abroad, exchange rate manipulation by cryptocurrency traders remains a major contributory factor.
IMF said: “Rapid growth of transactions on FX trading platforms poses new challenges. At the end of February, the authorities closed the operations of Binance and other crypto-asset trading platforms that were being used by Nigerians to facilitate capital flight – neither the identity of traders nor the origin of their funds could be traced.”
“The authorities also revoked the licences of 4,173 Bureaux De Change (BDCs) that failed to comply with CBN accounting and reporting requirements. Staff recommends that global crypto trading platforms be registered or licensed in Nigeria and subjected to the same regulatory requirements applicable to financial intermediaries following the principle of same activity, same risk, and same regulation.”
NoOnes, the financial communication super app has announced it has broken past 200,000 downloads despite launching just over a year ago in April 2023.
With the new figures representing a 300% surge in daily downloads since January 2024, the platform has also secured a 400% rise in user signups over the last three months, accelerating NoOnes’ global drive for financial empowerment by connecting people worldwide to conversations and payments.
In recent months, the platform’s meteoric rise has been primarily driven by strong growth in Kenya, Cameroon and South Africa, which have heavily benefited from NoOnes’ comprehensive suite of features.
Including over 250 payment methods, global chat functionalities for seamless cross-border communication and a secure BTC wallet, the app is rapidly emerging as the go-to platform to serve the needs of underbanked populations, spearheading economic equality through Bitcoin adoption.
Speaking about the new milestone, Ray Youssef, CEO of NoOnes, said “This announcement isn’t just about the huge momentum we’ve rapidly built as a new player in the crypto space, it’s a testament to the massive appetite for financial empowerment in Africa and the wider Global South. Just a year ago, we launched NoOnes with a clear mission – to lead the charge on dismantling financial apartheid once and for all and our new figures not only recognise the immense dedication of our team to this goal over the last few months, but are also a serious indicator of things to come.”
Available on Google Play and iOS, NoOnes was launched to empower the financial freedom of the Global South through Bitcoin.
The platform enables users to move money freely and faster, without the friction and challenges associated with legacy banking and financial institutions.
Its business ideology hinges on the belief that peer-to-peer is the world’s only true free market and that Bitcoin is the new global financial architecture poised to uplift the people of Africa, Latin America and South East Asia.
NoOnes’ biggest markets to date are Nigeria, Ghana, Cameroon, India and the Philippines, accruing over 400,000 users worldwide to date, and achieving profitability within just under 4 months of operations.
Despite its recent regulatory challenges, Africa’s cryptocurrency sector has continued its strong upward trajectory with Kenya, Cameroon, and South Africa emerging alongside Nigeria as the continent’s most prominent players.
According to Google Trends data, Kenya recently ranked among the top-15 crypto-curious countries globally and Cameroon currently boasts an active crypto user base of just under one million, accounting for nearly 7% of its active population.
With South Africa’s financial conduct regulator approving licences for crypto firms in April 2024, it is one of Africa’s most progressive countries for the industry, ranking amongst the highest countries in the world for crypto adoption globally.
Federal government will receive fresh loan funding from the World Bank, with approval expected for loans totalling $2.25billion on June 13, 2024.
Recall that Wale Edun, minister of Finance, at the spring meetings of the International Monetary Fund and the World Bank last month, had announced that the nation had qualified for processing a loan, described as ‘virtually a grant’ of $2.25bn from the World Bank at one per cent interest rate.
He stated, “We have qualified for the processing just this week to the Board of Directors of the World Bank of a total package of $2.25bn of what you can call ‘the closest you can get to a free lunch’- virtually a grant. It’s for about 10- 20 years moratorium and about one per cent interest.”
The package, approved by the World Bank Board of Directors, offers a 40-year term with a 10-year moratorium and a nominal one-percent interest rate.
According to the latest information on the World Bank website, the funding will be received via two major development projects.
The first project is the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing, which is set to receive $1.5bn.
The second project, NG Accelerating Resource Mobilization Reforms Programme-for-Results, has proposed funding of $750m.
It was also indicated that the government might reintroduce the excises on telecom services and the EMT levy on electronic money transfers through the Nigerian Banking System, among other taxes.
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