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CBN Seeks Shell Banks Abolished In Nigeria

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The Central Bank of Nigeria (CBN) has called for the abolition of shell banks in the country, saying they serve as institutions for money laundering.

Shell banks are institutions that carry out activities where they are not licensed.

Mr Godwin Emefiele, CBN governor, made the request in Abuja on Tuesday at a public hearing organised by the House committee on Banking and Currency on a Bill to amend the Banking and Other Financial Institutions Act (BOFIA) and other bills.

He said that the shell banks, apart from being used for money laundering, distort the banking system and might pose a problem to regulatory agencies.

Emefiele, represented by the Director, Legal Services Department, Mr Johnson Akinwunmi said “we wish to propose the introduction of new subsections 3(6) and (7) for the proscription of shell banks in response to the latest recommendations of the Financial Action Task Force (FATF) on money laundering.”

Similarly, the CBN is also seeking additional powers to revoke licences of banks and “power to inject funds into a falling bank by way of equity participation up to a level that guarantees control by CBN”.

The additional powers, according to the governor, is to enable the CBN acquire equity investment institutions and its ability to ensure a sound financial system.

The CBN also backed the House of Representatives in imposing stiffer penalties and terms of imprisonment of certain offences on erring commercial banks and their staff.

But in his presentation, the Director of Legal/board secretary, Nigeria Deposit Insurance Corporation (NDIC), Mr Belema Taribo opposed the proposed fines saying they were too high.

“The NDIC, as a deposit insurer supports the passage of the bill into law as the current fine of N1000 does not meet contemporary realities.

“However, it is our submission that the proposed penalty of N200,000 is above 100 per cent increment from the current penalty. In view of the above, we propose a fine of N5000.”

On the issuance of licence, NDIC proposed that the CBN should seek its consent before granting an application for banking licence.

“This is to enable the corporation to have a prior evaluation of the applicants with regard to insurance of deposits.”

In his welcome address, Chairman of the House Committee on Banking and Currency, Rep. Jones Onyereri, said that increase in penalties to the bank operators would streamline the operations of such banks to conform to international best practices.

He said that the proposed amendments to the Bofia Act 2017 were initiated by three lawmakers, which include Reps. Daniel Reyeneiju (Delta-PDP), Betty Apiafi (Rivers-PDP) and Jones Onyeriri (Imo-PDP).

Some of the penalties in the proposed amendments to the BOFIA Act 2017 include a fine of N20 million on banks that fail to comply with the conditions of the licence, a fine of N20 million on any director that fails to declare any property he/she owns that runs contrary to the Act.

“A fine of N10 million against a director or manager that fails to keep a book of account and a fine of N2 million on banks that fail to publish its annual report of its general meeting in two reputable national dailies among others”

While declaring the public hearing opened, the Speaker, Mr Yakubu Dogara, said the House opted for stiffer penalties of millions of Naira as fine for commercial banks which engaged in an illegal deduction of spurious charges on customers accounts domiciled in such banks.

Dogara, who was represented by the House Deputy Minority Leader, Rep. Chukwuka Onyema, said that the process of law making was dynamic noting that bank customers have not stop compiling of spurious charges on their accounts.


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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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