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How and Why Terrorism Financing Thrive

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A month long investigation by Nigeria CommunicationsWeek has revealed the vulnerability of credit cards to misuse for terrorist financing purposes and other illegal activities.

The investigation found that card scheme is now a favoured tool of terrorists in Nigeria, enabling them to fund their reign of terror and mayhem through money laundering operations on the pretext of carrying out the same everyday transactions that law-abiding citizens enjoy.

Because of this, the effort to deepen the nation’s financial system stability will remain an idle fancy unless the monetary authorities install effective monitoring windows to checkmate the operation of e-payment schemes in the country.

Nigeria CommunicationsWeek gathered that billions of Naira are converted into different currencies of the world every day through the routing of transactions through foreign card schemes and e-payment systems.

Card schemes – Verve; Visa; and MasterCard, are the owners of the payment scheme, into which a bank or any other eligible financial institution can become a member.

All the schemes cleared by international clearing houses.

Nigeria CommunicationsWeek gathered a card issued by a local bank allows the cardholder to withdraw allowable daily ATM transactions according to card type and limits in all locations of the world daily, without any restrictions once the account is in credit and also limitless spending on point of sale transactions worldwide without any restriction once the account is funded in Naira.

This in effects creates a vacuum in the e-Payment space which terrorist organizations exploit to procure military wares and feed their terror cells.

In many countries, the card schemes are tied to the domiciliary account (which are usually in currencies like the dollars, pounds, Euro or yen) of their holders.

Nigeria CommunicationsWeek gathered that in Nigeria, debit cards denominated in Naira (a hardly convertible currency), are used for cross-border transactions in other currencies of the world outside the country.

They are accepted worldwide as a means of payment for goods and services at more than 32.7million MasterCard/Visa locations and over 1.9million ATMs in more than 210 countries to conduct trans-border transactions from Naira denominated accounts worldwide without going through the protocols of foreign exchange acquisition under the controls of the Central Bank of Nigeria (CBN). 

This is clear violation of Nigeria’s foreign exchange policy.

Some “smart” Nigerians have also exploited the gap to buy up best and most expensive properties in choice places in Dubai, Europe and North America.

Nigeria CommunicationsWeek gathered that while the CBN, the National Assembly and the Presidency look elsewhere, some unscrupulous Nigerians and their foreign counterparts are cashing in on the nation’s porous payment system and destroying the foreign reserve.

Experts said that Nigeria can only check the menace with a national Naira Euro, MasterCard and Visa (EMV) compatible chip with national payment scheme to be called “Naira Pay” EMV-so called because it will create an interoperable uniform standard chip for all Nigerian financial institutions.

This scheme, Nigeria CommunicationsWeek gathered was proposed by a local firm but authorities at the CBN turned it down for reasons best know to them.

Many countries especially those in Asia have adopted the local scheme based on each country’s monetary policies and objectives.

Nigeria CommunicationsWeek gathered  that Malaysia’s migration to  EMV domestic chip  based  cards  was designed  to establish links  with other four  neighbouring  countries (Indonesia , Thailand ,Singapore and China) to facilitate cross-border ATM cash withdrawal transactions.

In India and China, they controlled their local currency by creating “Rupay” and “Chinapay” payment systems and allowed the use of Visa/MasterCards to be tied to only domiciliary accounts.

These countries have also adopted their individual migration through the creation of their national EMV standard chips.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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