E-Financial

Forex Scam: CBN Fines 4 Banks N5.87Bn, Orders MTN to Refund $8Bn

Published

8 years ago

August 30, 2018

Comms Week

Godwin Emefiele, Governor of the Central Bank of Nigeria

Kindly share this post

Central Bank of Nigeria (CBN) has imposed heavy sanctions totalling N5.87 billion on four banks under its regulatory purview and asked same to refund $8,134,312,397.63 for what it described as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’.

The four banks that have come under the sledge hammer of the CBN for the violations are Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank.

Announcing the decision in Abuja, Isaac Okorafor, CBN’s Director, Corporate Communications, said that the actions of the Bank became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.

The CBN has, therefore, asked the Managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria.

Figures obtained from the CBN on Wednesday, August 29, 2018, indicate that the highest fine of N2,470,604,767.13 was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined the sum of N1,885,852,847.45. For its punishment, Citibank Nigeria was penalized in the sum of N1,265,541,562.31, just as Diamond Bank was directed to pay the sum of N250 million for violating extant rules.

The CBN Spokesman further disclosed that the decision of the Bank followed thorough investigations by it into the allegations of remittances by the four banks of forex with irregular certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited.

He said the investigations revealed that the sum of $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs. Similarly, he said the sums of $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively during the period 2007 and 2015.

Accordingly, he said the CBN had directed the affected banks to immediately refund the respective sums to the CBN.

The CBN investigation further revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the company.

While disclosing that the investigations by the CBN took a while in order to carry out thorough inquiry and give fair hearing to all parties involved, Mr. Okorafor advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations of Nigeria in their foreign exchange transactions.

He warned that failure by the management of banks and companies to abide by the existing guidelines would be appropriately sanctioned, which sanctions may include denial of access to the Nigerian foreign exchange market.

Details of the Investigations

CBN’s letter to MTN says:

Our investigation also revealed the following, among others:

The shareholders of your company invested the sum of $402,590,261.03 in the company from 2001 to 2006;
The investment was carried out through the inflow of foreign currency cash transfers and equipment importation, which was evidenced by the CCIs issued by Standard Chartered Bank (SCB), Citi Bank (CB) and Diamond Bank (DB);

iii. The CCIs issued at the time of the investment by the above banks to your organization in respect of the $402,590,261.03 showed that $59,436,923.44 was invested as shareholders’ loan and $343,153,339.56 as equity;

However, a review of your organization’s financial statements for the year ended December 31, 2007 revealed that $399,594,146.00 was recorded/invested as shareholders’ loan and $2,996,117.00 as equity investment, in accordance with the shareholder’s agreement but contrary to the CCIs issued by the banks in (iii) above;
Following a request by your organization through Standard Chartered Bank for CBN’s approval to convert the shareholder’s loan to preference shares, an approval-in-principle was granted vide our letter dated November 13, 2007; with the grant of final approval made subject to the fulfillment of the following conditions by your organization.

Implementation of the decision in item 5B of your board resolution dated November 08, 2007 and submission of documentary evidence to that effect to the Director, Trade and Exchange Department of the Central Bank of Nigeria; and
Provision of an undertaking that no remittance for either interest or principal repayment would be made to the shareholders from the date of the loan to the date they were converted to preference shares.
In spite of the non-fulfillment of the conditions in (v) above and consequently, the non-issuance of a final approval by the CBN, your organization converted the shareholders’ loan to preference shares with Standard Charted Bank issuing new CCIs in respect of the illegal conversion;

vii. The action of your banker in aiding your organisation in the illegal conversion of the shareholders’ loan was later described by SCB in a letter to the CBN dated December 10, 2009 as an “unintended omission”; and

viii. On account of the illegal conversion of your shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated on behalf of your company by the aforementioned banks between 2007 and 2015.

CBN’s Letter to Standard Chartered bank says:

Our investigation also revealed the following, among others:

The shareholders of MTN Nigeria Communications Limited invested the sum of $402,590,261.03 in the company from 2001 to 2006;

The investment was carried out through the inflow of foreign currency cash transfers and equipment importation, which was evidenced by the CCIs issued by your bank, Citi Bank (CB) and Diamond Bank (DB) at the initial stage of the investment.

iii. The CCIs issued at the time of investment by your bank along with the other banks in respect of the $402,590,261.03 showed that $59,436,923.44 was recorded/invested as shareholders’ loan and $343,153,339.56 as equity. This position was, however, contrary to the position in the financial statements of MTN Nigeria Communications Limited for the year ended December 31, 2007, which revealed that $399,594,146.00 was invested as shareholders’ loan and $2,996,117.00 as equity investment, in accordance with the shareholder’s agreement but contrary to the CCIs issued by your bank, Citi Bank (CB) and Diamond Bank (DB). Your action in this regard constituted a rendition of false returns to the Central Bank of Nigeria.

Your bank subsequently applied to the CBN on behalf of MTN Nigeria Communications Limited for the conversion of the shareholder’s loan to preference shares, for which an approval-in-principle was granted vide our letter dated November 13, 2007 with the grant of final approval made subject to the fulfillment of the following conditions by MTNN:

Implementation of the decision in item 5B of MTN Nigeria Communications Limited board resolution dated November 8, 2007 and submission of documentary evidence to that effect to the Director, Trade and Exchange Department of the Central Bank of Nigeria; and

Provision of an undertaking that no remittance for either interest or principal repayment would be made to the shareholders from the date of the loan to the date they were converted to preference shares.

In spite of the non-fulfillment of the above conditions in (iv) above and consequently, the non-issuance of a final approval by the CBN, your bank issued new CCIs in support of the illegal conversion of the shareholders’ loan to preference shares; an action that was later described by your bank in a letter to the CBN dated December 10, 2009, as an “unintended omission”; and

On account of the illegal conversion of the shareholders loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by your bank and the other banks on behalf of MTN Nigeria Communications Limited between 2007 and 2015.

Other findings from our investigation included the following:

Your bank issued three (3) CCIs outside the regulatory 24 hours without the approval of the CBN;

In contravention of Memorandum 24 (ii) of the Foreign Exchange Manual, which requires that CCIs should be transferred based on customer’s instructions to a bank of the customer’s choice along with the transaction history of the CCI, you provided confirmation to two other banks, Citibank and Diamond Bank, instead of transferring the CCIs to them as required by the Foreign Exchange Manual.

The two banks on the strength of your confirmation subsequently remitted various sums as dividend for MTN Nigeria Communications Limited at different times; and

Your bank failed to issue a letter of indemnity to the CBN against double remittance in respect of ten CCIs transferred by Diamond Bank and Citibank to your bank as required under subsection 5(iii) of Memorandum 24 of the Foreign Exchange Manual.

Upon the conclusion of the investigation, the Committee of Governors of the Central Bank of Nigeria met with the management of your bank and the other banks as well as representatives of MTN Nigeria Communications Limited in Lagos on May 25, 2018. This was to give all the parties fair hearing, towards taking an informed decision on the matter.

CBN’s letter to Stanbic-IBTC says:

Our investigation also revealed the following, among others:

The shareholders of MTN Nigeria Communications Limited invested the sum of $402,590,261.03 in the company from 2001 to 2006;

The investment was carried out through the inflow of foreign currency cash transfers and equipment importation, which was evidenced by the CCIs issued by Standard Chartered Bank, Diamond Bank and Citibank, out of which eight of the CCIs totaling $377,216,508.30 were transferred to your bank by Standard Chartered Bank. Consequently, your bank repatriated the sum of $929,051,331.83 as proceeds of divestment from the CCIs valued at $42,704,408.61.

iii. On account of the illegal conversion of the shareholders loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by your bank and the other banks on behalf of MTN Nigeria Communications Limited between 2007 and 2015.

Other findings from our investigation included the following:

a). Your bank falsely reported thirty five CCIs valued $313,683,925.84 inappropriately as “other purchases” in your MTR 203 returns for February 2008 instead of “capital importation”;

b) Your bank issued eight CCIs of $58,359,616.67 in respect of foreign exchange sourced locally as shareholders’ loan. This constituted a contravention of the requirement of Section 15 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and Memorandum 20 (1.3) (iii) of the Foreign Exchange Manual, which stipulate that CCIs should only be issued on capital imported;

c). Your bank issued eight CCIs for capital inflows in form of machinery outside the 24 hours regulatory requirement of receipt of shipping documents in contravention of paragraph 4.1.1 (IV) of the Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2012 to 2013;

d) Your bank failed to issue a letter of indemnity to the CBN against double remittance in respect of twenty CCIs transferred by Standard Chartered Bank to your bank as required under subsection 5(iii) of Memorandum 24 of the Foreign Exchange Manual; and

e) Your bank repatriated dividends totaling $905,260.20 in respect of CCIs illegally issued on the strength of locally sourced capital.

CBN’s letter to CitiBank says:

Our investigation also revealed the following, among others:

The shareholders of MTN Nigeria Communications Limited invested the sum of $402,590,261.03 in the company from 2001 to 2006;
The investment was carried out through the inflow of foreign currency cash transfer and equipment importation evidenced by the CCIs issued by your bank, Standard Chartered Bank and Diamond Bank;

iii. The CCIs issued by your bank along with the other banks in respect of the $402,590,261.03 showed that $59,436,923.44 was recorded/invested as shareholders’ loan and $343,153,339.56 as equity at the time of the investment. This position was, however, contrary to the position in the financial statements of MTN Nigeria Communications Limited for the year ended December 31, 2007, which showed that $399,594,146.00 was invested as shareholders’ loan and $2,996,117.00 as equity investment, in accordance with the shareholder’s agreement but contrary to the CCIs issued by your bank, Standard Chartered Bank (SCB) and Diamond Bank (DB). Your action in this regard constituted a rendition of false returns to the Central Bank of Nigeria;

Your bank issued seven (7) CCIs to MTN Nigeria (MTNN) totaling $42,126,803.04 that were subsequently transferred to Standard Chartered Bank Limited at the request of your customer (MTNN) on February 6, 2006, which constituted part of the CCIs that were consequently irregularly re-issued;

Four of the CCIs issued by your bank evidencing the inflow of capital imported as cash were issued outside the period of 24 hours allowed by regulation upon the receipt of inflow, in flagrant contravention of Memorandum 22 of the Foreign Exchange Manual;

Your bank failed to comply with extant regulations on the issuance of letter of indemnity to the CBN in addition to forwarding the transaction history of the CCIs to the CBN, as provided in Memorandum 24(5)(ii)(b) of the Foreign Exchange Manual in respect of the CCIs received by your bank from Standard Chartered Bank; and

vii. Your bank purchased $535,000,000 on the basis of photocopies of Form “A” bearing the name of Standard Chartered Bank as the applicant bank and the referenced CCIs in contravention of Memorandum 24 (4) (a) of the Foreign Exchange Manual 2006.

CBN’s letter to Diamond Bank says:

Our investigation also revealed the following, among others:

The shareholders of MTN Nigeria Communications Limited invested the sum of $402,590,261.03 in the company from 2011 to 2006;

The investment was carried out through the inflow of foreign currency cash transfer and equipment importation, which was evidenced by the CCIs issued by your bank, Citi Bank and Standard Chartered Bank;

III. The CCIs issued illegally by your bank along with the other banks in respect of the $402,590,261.03 showed that $59,436,923.44 was recorded/invested as shareholders’ loan and $343,153,339.56 as equity. This position was, however, contrary to the position in the financial statements of MTN Nigeria Communications Limited for the year ended December 31, 2007, which showed that $399,594,146.00 was invested as shareholders’ loan and $2,996,117.00 as equity investment, in accordance with the shareholder’s agreement but contrary to the CCIs issued by your bank, Citi Bank (CB) and Standard Chartered Bank (SCB). Your action in this regard constituted a rendition of false returns to the Central Bank of Nigeria; and

On account of the illegal conversion of the shareholders loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by your bank and the other banks on behalf of MTN Nigeria Communications Limited, within a period of six years.

Other findings from our investigation included the following:

a) Your bank issued three CCIs in favour of Dantata Investment for the sum of $5million without converting the foreign exchange received into Naira as required by our regulations. On the basis of these illegally issued CCIs, your bank repatriated the sum of $102,545,336.77 in respect of these CCIs;

b) A further review of the CCIs also showed that no Form “M” was opened as evidence of the utilization of the FX for the importation of goods (as “Not valid for FX”) into the country;

c) Your bank remitted the sum of $348,914,501.38 as dividend to MTN Nigeria Communications Limited offshore corporate shareholders without any documentary evidence of the audited account of the company to justify the basis of the payment of the dividend declared and paid by MTNN. This action was a violation of the provision of Memorandum 24(4)(b) of the Foreign Exchange Manual;

d) Your bank failed to indemnify SCB for losses and/or liabilities that may arise from the use of the CCIs you transferred to SCB in violation of the provisions of the Foreign Exchange Manual 2006;

e) Your bank issued three CCIs outside the regulatory 24 hours without the approval of the CBN contrary to provisions of Memorandum 22 of the Foreign Exchange Manual 2006; and

f) Your bank illegally remitted the sum of $352,222,358.39 on behalf of Standard Chartered Bank and Stanbic IBTC Bank in respect of the various CCIs issued to MTN Nigeria Communications Limited.

Kindly share this post

E-Financial

See Key Changes in BVN Rule from May 1 by CBN

Published

13 hours ago

April 9, 2026

Ebere Melum-Nwogbo

Kindly share this post

Central Bank of Nigeria (CBN) is implementing stricter Bank Verification Number (BVN) regulations, including limiting phone number changes to only once in a lifetime.

See Key Changes in BVN Rule from May 1 by CBN

This will take effect from May 1.

Also, mobile apps will be restricted to one device, a 24-hour temporary watch-list for suspicious transactions will be enforced, and enrollment is restricted to individuals aged 18 and above.

Other key changes are:

One Device Policy: Mobile banking apps will be restricted to one device, with automatic logout when accessing another device.

Fraud Watchlist: BVNs linked to suspicious activity will be placed on a 24-hour, temporary, or permanent blacklist, temporarily freezing accounts.

Age Restriction: Enrollment for BVN is now restricted to individuals aged 18 and above.

Data Correction: Changes to BVN profile details (Name, DOB) are also heavily restricted, allowing only one-time corrections to data.

Kindly share this post

E-Financial

Paga Group Rejigs Leadership as Oviosu, Founder Becomes Group CEO

Published

13 hours ago

April 9, 2026

Ebere Melum-Nwogbo

Kindly share this post

Paga Group has announced a major leadership restructuring, marking 17 years of operation and signalling a strategic shift toward deeper financial infrastructure development, emerging technologies, and expansion across Africa.

Paga Group Rejigs Leadership as Oviosu, Founder Becomes Group CEO

Tayo Oviosu, founder (front) and Ope Oyinloye, Group COO and CEO of Paga Nigeria

With the restructuring, Tayo Oviosu, founder, is now the Group CEO, while Ope Oyinloye has been appointed Group COO and CEO of Paga Nigeria, in an acting capacity, pending regulatory approval from the Central Bank of Nigeria (CBN).

Oviosu will also serve as executive chairman of the Group Board and non-executive chairman of Paga Nigeria.

He will be leading Paga Labs, driving geographic expansion, and overseeing fundraising efforts.

The fintech company said the changes represent a transition from its foundational phase into a new growth chapter, known as ‘Act 2’, focused on connecting Africans to global financial systems, scaling innovation, and entering new markets.

To support this transition, the company announced key leadership changes. advertisement

Jay Alabraba, co-founder, has been appointed group director of Special Projects, where he will initially lead the company’s expansion into lending and support new market entry initiatives.

Speaking on the transition, Oviosu said the company’s mission remains unchanged but its approach continues to evolve.

“Act 1 proved that we could build a profitable, high-growth infrastructure business that the world’s leading companies trust. Act 2 is about taking that infrastructure to its full potential—connecting Africans to global financial rails, moving into new markets, and leading the next wave of financial technology,” he said.

Oyinloye added that his focus will be on sustaining operational excellence while scaling the company’s next phase of growth.

With the new structure in place, Paga is positioning itself to play a more significant role in shaping the future of financial services across Africa, particularly as digital payments, blockchain technologies, and AI-driven solutions gain traction across the continent.

Paga has since evolved into a full-stack financial services infrastructure provider. Its offerings now span enterprise solutions through Paga Engine, consumer services via the Paga app, and merchant tools under Doroki.

The company’s first phase delivered significant growth. Between 2021 and 2025, total transaction value processed increased 17-fold to $11 billion across 169 million transactions in 2025 alone, with more than $1.5 billion processed monthly.

Net revenues grew five times within the same period, underscoring the scalability of its model.

Paga also expanded its enterprise footprint, with over 265 clients which include global firms such as PayPal, Meta, Amazon, LemFi, Tencent, Pesa, and Verto building on its infrastructure.

The company was further recognised by the Financial Times and Statista as one of Africa’s fastest-growing companies for three consecutive years from 2023 to 2025.

As part of its new strategic direction, Paga outlined three priorities which are strengthening its financial infrastructure to connect local and global payment systems; advancing emerging technologies such as stablecoins, cryptocurrency, and artificial intelligence through its innovation arm, Paga Labs; and expanding into new African markets.

Kindly share this post

E-Financial

Reputation: The Real Currency Powering Fintechs

Published

13 hours ago

April 9, 2026

Chike Onwuegbuchi

Kindly share this post

By John Kokome

In the fast-evolving fintech ecosystem, capital is no longer the only currency that determines success. Increasingly, reputation has emerged as a powerful, if intangible, asset that can accelerate growth, attract investment, and secure customer loyalty, or conversely, trigger rapid decline when mismanaged. In a sector built on trust, speed, and innovation, reputation is not just complementary to business performance; it is foundational.

Fintech, by its very nature, operates at the intersection of finance and technology, two industries where trust is paramount. Traditional financial institutions spent decades, even centuries, building credibility through regulatory compliance, customer relationships, and institutional stability. Fintech startups, however, often attempt to compress this trust-building process into a few years, sometimes even months. This compressed timeline makes reputation both more fragile and more critical.

At the core of fintech’s reputation economy is trust. Users are asked to hand over sensitive personal data, link bank accounts, and transact digitally, often without ever stepping into a physical office. In markets like Nigeria, where scepticism around digital financial services can still linger due to fraud and system inefficiencies, trust becomes even more valuable. A single breach, whether data-related, operational, or ethical, can erode years of goodwill in hours.

Yet, reputation in fintech extends beyond security. It encompasses reliability, transparency, customer experience, and regulatory alignment. Downtime during peak transaction periods, unclear fee structures, or delayed dispute resolution can quickly escalate into reputational crises. Social media has amplified this risk. A dissatisfied customer’s complaint can go viral within minutes, shaping public perception far more rapidly than traditional media ever could.

Conversely, a strong reputation can be a growth multiplier. Fintech companies that consistently deliver seamless user experiences and communicate transparently often benefit from organic word-of-mouth marketing. In a crowded market with low switching costs, users tend to gravitate toward platforms they perceive as dependable. Reputation, in this sense, becomes a competitive moat.

Investors, too, are increasingly factoring reputation into their decision-making. Beyond financial metrics, venture capitalists and institutional investors are scrutinising governance structures, compliance culture, and public perception. A fintech with strong fundamentals but a tainted reputation may struggle to raise capital, while one with a solid reputation can command premium valuations. In this way, reputation directly influences access to funding and long-term sustainability.

Regulators also play a significant role in shaping reputational outcomes. In many emerging markets, regulatory frameworks are still evolving to keep pace with fintech innovation. Companies that proactively engage regulators, adhere to guidelines, and demonstrate a commitment to consumer protection often earn a reputational advantage. On the other hand, those that attempt to bypass regulations or operate in grey areas risk not only sanctions but also public distrust.

Importantly, reputation is not built solely through marketing. While branding and communications are essential, they must be rooted in authentic operational excellence. There is a growing disconnect between perception and reality in some fintech narratives where aggressive marketing promises outpace actual service delivery. In the long run, this gap is unsustainable. Reputation must be earned through consistent performance, not manufactured through messaging.

For fintech companies, managing reputation requires a deliberate, strategic approach. This includes investing in robust cybersecurity infrastructure, maintaining transparent communication channels, prioritising customer support, and embedding compliance into the organisational culture. It also involves proactive crisis management, anticipating potential risks and preparing clear response frameworks before issues arise.

Leadership plays a crucial role in this equation. Founders and executives are often the public face of fintech brands, and their actions, statements, and values significantly influence perception. Ethical leadership, accountability, and responsiveness can strengthen trust, while opacity or defensiveness can quickly damage credibility.

Ultimately, in the fintech ecosystem, reputation functions much like currency; it can be accumulated, spent, and, if mishandled, depleted. Unlike financial capital, it is far more difficult to rebuild once lost. As competition intensifies and the industry matures, fintech companies must recognise that their most valuable asset may not be their technology or funding, but the trust they earn and sustain.

In a world where digital transactions are instantaneous and information travels even faster, reputation is not just a byproduct of success; it is a prerequisite.

John Kokome is the Corporate Communications Manager at FlashChange, a fintech platform redefining secure digital asset exchange. With experience across fintech, cryptocurrency, telecoms, and development communications in Africa. He currently leads strategic storytelling, reputation management, and stakeholder engagement initiatives at the company, focusing on building trust, transparency, and financial literacy in the digital assets space. John’s work sits at the intersection of policy, technology, and public perception, with a strong emphasis on Africa-first narratives and responsible innovation. He has contributed opinion pieces and thought leadership articles on governance, youth empowerment, branding, and Nigeria’s evolving digital economy.

Kindly share this post