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CBN Officials in Forex Scandal, Allegedly Launder Forex Through Phony Firms

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A major scandal has hit the new foreign exchange policy of the Central Bank of Nigeria (CBN) as it is now riddled with sharp practices.

The policy, which was introduced in March and implemented in June this year to help stabilise the nation’s currency, the naira, it was gathered, is being consumed by the ‘Nigerian factor’, according to the Street Journal.

The Street Journal also learnt that the policy is being circumvented by government and CBN officials, who have turned the policy into a big time fraud through fictitious companies.

According to informed source within the bank system, government officials in an unholy alliance with some senior CBN staff, use different means to purchase dollars from the CBN and interbanks at a cheap rate only to resell at the parallel market rate.

This magazine gathered that to bye pass the policy, government officials, with fictitious company, would approach the CBN with tales of why they should be allowed to purchase dollars at a certain rate. With connivance of an insider, this easily sails through, only for the dollars to reappear at the streets, selling at the prevalent rate.

In announcing the new policy on March 24, which abolished the old policy which fixed official exchange rate at between N197 and N199 to USD1, the CBN Governor, Godwin Emefiele, had said there would be a window to purchase dollars at lower rate specially designed to fund specific projects.

He said the apex bank would retain a special window to fund critical transactions in foreign exchange, which would likely attract a concessionary rate. By this development, the interbank foreign exchange market, which had been dead for sometime, was revitalised on unrestricted exchange rate basis.

Emefiele explained that “the MPC voted unanimously to adopt a flexible exchange rate policy to restore the automatic adjustment properties of the exchange rate,” adding that it voted also to “retain a small window for funding critical transactions” and that “details of operations of the market would be released by the Central Bank at the appropriate time.”

It was learnt that it is this ‘small window’ that is now abused.

According to the source, “Sometimes they (government officials) arm twist the CBN men through subtle threat and blackmail to do their bidding. This is by providing a company’s name that deals in essential need for the country. Through collaboration of an insider, the company is given a concession to buy dollars at cheaper rate, then resell at the parallel market”

Another window of opportunity that presented itself was when the Federal Government on August 5, directed banks and authorised forex dealers to sell to the Pilgrims Travelling Allowance, PTA, to intending pilgrims to Mecca at a concessionary exchange rate of N197 to $1

According to CBN, “Each pilgrim is entitled to purchase a minimum of $750.00 and maximum of US$1,000.00 as PTA.

“The Federal Government has approved that intending pilgrims are to be sold the PTA at a concessionary exchange rate of N197.00 to the US dollar.

“No commission shall be charged by the banks for the sale of the PTA to the intending pilgrims.

“The Central Bank of Nigeria shall sale the PTA to the designated banks in Lagos and Abuja and the accounts of the respective banks shall be debited as soon as the funds are disbursed”.

Meanwhile, this was when the naira dipped to N400 to $1 at the parallel market.

Many who were not pilgrims and could press the right button, rushed to authorised dealers and banks and bought huge amount of dollars undermining the $750 peg per pilgrim.

“This was mostly carried out by government officials who came with all manners of excuses why dollars should be sold to them. At times you cannot ignore or refuse them because they will blackmail you into it”, said the source.

In unveiling the new foreign exchange policy the CBN had on June 15 formally took off flexible foreign exchange policy that would allow the foreign exchange interbank trading window to be driven purely by market forces.

The new policy effectively removed controls on the naira, allowing increased dollar supply that would help strengthen the country’s weak economy.

Emefiele had said in Abuja at the formal commencement that the new framework would operate a single trading window, with about 10 primary traders, to be appointed by the bank.

The CBN took the measure following severe pressures on external reserve and foreign exchange supply crisis.

Emefiele said the Monetary Policy Rate, MPR, was retained at 12.

“In the face of severe pressures on external reserves and foreign exchange supply crises, the CBN abandoned its fixed rate policy in favour of a flexible and multiple market model, which implied a floating exchange rate regime.

The apex bank’s Monetary Policy Committee, MPC, which made this decision, chose to retain its Monetary Policy Rate, MPR, at 12 per cent, Cash Reserve Ratio, CRR, at 22.5 per cent and Liquidity Ratio at 30 per cent”, Emefiele had said.

Isaac Okoroafor, acting director, Corporate Communications Department, said this was not possible because all the interbanks the CBN sells foreign exchange to are required to publish them in the newspapers. Through this they are monitored.

“Look, I don’t normally answer this kind of question. But let me tell you that all the inter banks the CBN sells foreign exchange to are required by law to publish them in the newspapers. This is to check and monitor them. So, if anyone notices or is suspicious of shortfall of any inter bank he should report the bank to us, such bank or individual who engages in the sharp practices will be dealt with”, Okoroafor said.


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E-Financial

FG makes u-Turn on Bank Account Re-Registration

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Federal government on Friday apologised for asking all account holders in financial institutions in the country to re-register their personal details.

FG makes u-Turn on Bank Account Re-Registration

Recall that the federal government had on Thursday ‎ordered that all persons holding accounts across financial institutions and insurance firms should complete and submit self-certification forms to their respective financial institutions.

The notice issued by the government to that effect read, ‎“This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions.

“Persons holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.‎”

The directive raised eyebrows, as account holders already possessed Bank Verification Numbers.

Following widespread condemnation that trailed the directive, the Federal Government backtracked on Friday, saying the fresh guidelin‎e was not for all Nigerians.

The government attributed the development to misinformation.

The clarification issued by the government on Friday read, ‎“We apologise for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the notice does not apply to everybody. ‎FIRS will clarify Nigerians on the objectives of the directive.”

Also on Friday, FIRS, in a statement posted on Twitter, explained that the guidelines were only for non-residents, as well as people paying tax in more than one country.

Parts of the FIRS statement read, “The Self Certification Form is basically to be administered on Reportable Persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS.

“Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or country.”

“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.”


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Stanbic IBTC Bank Disowns Lagos ATM Fraudster

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Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

The Bank said this in a statement on Wednesday.

The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.

“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.

“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.

“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.

“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.

“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.

“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”


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Buhari Okays Establishment of CBN-Led Infraco

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President Muhammadu  Buhari has approved the establishment of an   Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).

Buhari Okays Establishment of CBN-Led Infraco

Mr. Godwin Emefiele, CBN governor

This is coming  on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.

Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.

According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.

“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.

On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.


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