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Uwaleke, ACMAN Boss Urges CBN to Set Up Whistle-Blower System

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Uche Uwaleke, president, Association of Capital Market Academics of Nigeria (ACMAN) has urged the  Central Bank of Nigeria (CBN) to set up a whistle-blower system to assist in its implementation of recent guidelines and policies.

Uwaleke, ACMAN Boss Urges CBN to Set Up Whistle-Blower System

Uwaleke, also a renowned Professor of Capital Market, gave the advice at a media briefing on recent financial stability measures taken by the CBN and their likely impact on the nation’s capital market.

According to Uwaleke, aside the raft of COVID-19 interventions through the banking system which require close monitoring, the financial sector has recently witnessed a number of measures by the CBN designed to stabilize it and possibly insulate it from the negative impact of the pandemic.

“These include the Global Standing Instruction designed in part to reduce the Non-Performing Loans in the banking industry as well as measures that directly impact the liquidity in the forex market’.

“In order to contextualize the CBN’s recent measures regarding forex, it is pertinent to realize that the Q2 2020 negative growth in real GDP, high inflation rate, increase in inflation and downturn in virtually all macro indicators are all partly attributed to scarcity of forex following collapse in oil price since oil revenue accounts for over 90% of our forex receipts. This precarious supply situation is excercebated by spurious demand for forex, activities of speculators and sharp practices. So, the CBN is faced with a double Whammy sort of situation’.

He listed part of the sharp practices which exert pressure in the forex market as the over-invoicing of products imported into the country due to the activities of middle men arguing that, requiring banks to raise Form-M only in favour of a supplier as opposed to routing payments for imports through agents will go a long way in reducing the pressure in the forex market especially if the product price verification mechanism the CBN is putting in place is effectively implemented.

He equally commended the directive by the CBN to Exporters to ensure that all export proceeds are repatriated as a measure capable of boosting forex supply if complied with. He urged the CBN not to hesitate to apply sanctions on violators to serve as deterrent. According to him, ‘this is the time for the apex bank to wield the big stick, not mere slap on the wrist, on any Deposit Money Bank that flouts the Form-M order regarding third parties’.

‘I have not stopped wondering where people who hawk forex in the black market get their hard currencies. The CBN should device means of checking round tripping to ensure that the banks are not diverting forex to the parallel market. Ditto for BDCs especially now that the Bank has announced plans to resume sale of forex to the BDCs’

Uwaleke believes that improved liquidity in the forex market will rub-off positively on the capital market but thinks that the real challenge now is how to ensure that these laudable measures are not circumvented thereby defeating the purpose for which they were put in place. He therefore urged the CBN to put in place a comprehensive Whistle-Blower System to support the effective execution of these measures.

On the proposed WBS, he goes on to explain: ‘’I am not referring to the one set up by the Federal Ministry of Finance some time ago. I am also aware of the Whistle-Blower policy statement contained in Section 5 of the CBN Revised Code of Corporate Governance for Banks and Discount Houses which requires banks to have a whistle-blowing policy that contain mechanisms, including assurance of confidentiality, that encourage employees and stakeholders to report any unethical activity to the bank or the CBN. Again, the comprehensive WBS is different from the Customer complaints mechanism handled by the Consumer Protection department of the apex Bank.

‘I am talking about a facility that allows customers, shareholders, NGOs and other members of the public, who may not be stakeholders of a bank, to report to the CBN any observed wrongdoing by a bank or non-bank financial Institution akin to the whistle-blower policy of the South African Reserve Bank. Through this system, the public can report any alleged violation of the guidelines or directives of the CBN especially in relation to forex. It goes without saying that whistle-blowers who inform regulators of suspected instances of infractions, especially at this time, can be a vital source of information to support regulation against sharp practices’.

Uwaleke is convinced that following the example of South Africa, the WBS will help rein-in misconduct in Nigeria’s financial markets. ‘Whether this should involve monetary incentives to individuals who come forward to report possible violations is left for the CBN to figure out’ he noted.

 

 

 

 

 

 


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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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