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Tag: Banks

  • SERAP to Saraki, Dogara: ‘Withdraw directives to banks to unfreeze Mrs Jonathan’s accounts’

    Socio-Economic Rights and Accountability Project (SERAP) has urged the President of the Senate Dr Bukola Saraki and Speaker of the House of Representatives Mr Yakubu Dogara to “Urgently withdraw the patently unconstitutional directives to some banks to unfreeze former First Lady Mrs Patience Jonathan’s accounts.”

    The organization said that, “the directives to banks to unfreeze Mrs Jonathan’s accounts amount to mingling of the executive and judicial powers in the National Assembly. Checks and balances should ideally help contribute to the rule of law and strengthening our democratic dispensation but if one branch of government grows too strong and overreaching the country might be in trouble.”

    In a statement signed on Sunday by SERAP deputy director Timothy Adewale the organization said that, “It’s an affront to our constitutional democracy for the National Assembly to turn itself into a tool for checkmating the country’s justice system, especially the prosecution of grand corruption. Rather than helping Mrs Jonathan’s desire to achieve justice for what she may consider to be violations of her human rights, such directives are doing exactly the opposite and politicising the criminal justice process.”

    The Senate had last week decided that Mrs Jonathan’s accounts should be unfrozen, saying that some of the accounts including with Stanbic IBTC, First Bank, Union Bank, Diamond Bank, Fidelity Bank, Ecobank and Bank Zenith Bank were frozen based on some administrative lapses. It claimed that the Economic and Financial Crimes Commission (EFCC) used the banks to close the accounts without due process of law. The House of Representatives in September gave a similar directive to the banks to free the former first lady’s blocked accounts.

    But SERAP said that, “Nigerians are concerned about their lawmakers’ thirst for power, and about the National Assembly aggrandizing its legislative powers without sufficient checks and constitutional scrutiny and validity. The National Assembly ought to focus the exercise of its legislative powers solely on making laws for the peace, order and good government of our country, addressing only matters of prime national concern, and when necessary, checking the excesses of the executive branch.”

    The statement reads in part: “The directives purportedly unfreezing the accounts of Mrs Jonathan will not give the public the confidence that the National Assembly will change its ways and embrace the rule of law.”

    “The National Assembly should not show itself as incapable and unwilling to address the concerns of Nigerians about its operations and apparent lack of transparency. These kinds of interventions by the National Assembly could portray our lawmakers in the eyes of Nigerians as forgetting what they are in Abuja to do.”

    “The Senate and House of Representatives should advise Mrs Jonathan to seek appropriate judicial remedies if she feels the criminal justice mechanisms have violated her human rights. That’s the essence of the rule of law, separation of powers and checks and balances. The supposed directives to banks have unfortunately again put the reputation of the National Assembly at stake.”

    “What Nigerians want and deserve is a balanced sharing of constitutional powers for the sake of the public good, and not ‘Imperial National Assembly’, a National Assembly that sits on its throne in Abuja and treats Nigerians as serfs in their fiefdoms.”

    “If the body that makes law also controls its execution, implementation and interpretation, it can effectively tailor the laws to help itself and its friends and hurt its perceived enemies. It can thwart the virtue of impartial general law-making by rendering it a tool for singling out.”

  • FG set to seize funds in accounts without BVN

    FG set to seize funds in accounts without BVN

    Justice Nnamdi Dimgba of the Federal High Court in Abuja has granted a request by Attorney General of the Federation, Abubakar Malami, for a temporary forfeiture of all funds held in bank accounts not linked to BVNs.

    The latter are accounts without sufficient know-your-customer credentials, PREMIUM TIMES has reported. .

    The order followed an originating motion of notice filed by Mr. Malami on behalf of the Nigerian government on September 28. Justice Dimgba granted all the nine reliefs sought by Mr. Malami —himself represented by a lawyer, Usman Dakas— on October 17.

    The court ordered all the 19 deposit money banks, DMBs, operating in the country to release to Nigerian government names of accounts not yet connected to BVN; account numbers; their outstanding balances; domiciling locations; and domiciliary accounts without BVN and where they are domiciled.

    Nigeria deposit money banks that were listed as respondents in the ex-parte suit are: Access Bank, Citi Bank, Diamond Bank, Ecobank, Fidelity Bank, First Bank and First City Monument Bank. Others are: Guaranty Trust Bank, Heritage Bank, Keystone Bank, Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank, Sterling Bank, Union Bank and United Bank for Africa.

    The remaining three are: Unity, Bank Wema Bank and Zenith Bank. The court also ordered all of them to disclose any investments made with funds and to withhold authorisation for any outward inflow of funds from the accounts.

    All the details are to be submitted to Nigeria Inter-Bank Settlement System, NIBSS, and the CBN for authentication.

    The banks were also directed to publish all bank accounts not linked to BVN in national newspapers with a 14-day notice for individuals with interest in such accounts to come forward and justify why their funds should not be forfeited to the Nigerian government.

    Mr. Dimgba also ordered the CBN, which was joined as 20th respondent alongside the 19 DMBs, to appoint an official who will examine all the details submitted to the apex bank for compliance. The government argued the matter under Section 3 of the Money Laundering Act, 2011.

    The section said banks must “ensure that documents, data or information collected under the customer due diligence process is kept up-to-date and relevant by undertaking reviews of existing records, particularly for higher risk categories of customers or business relationships.”

    The Bank Verification Number is a unique identification number that can be verified and used to transact business across all the banking platforms in Nigeria.

    The CBN imposed the policy to capture customers’ data for financial transactions and check fraud in the banking system. Registration for BVNs commenced on February 14, 2014, across the country.

    The CBN said over 20.8 million customers enrolled 40 million bank accounts before the October 31, 2015, final deadline for customers residing within the country.

    The CBN extended the deadline for Nigerians in the diaspora to December 2016 to sign up for the BVN system. But hundreds of thousands home and abroad are still believed to be left behind.

  • BVN: CBN directs banks to keep database of fraudulent customers

    The Central Bank of Nigeria (CBN) on Thursday ordered banks to establish a database of customers identified through their Bank Verification Numbers (BVNs) as fraudsters.

    The directive was contained in the Regulatory Framework for Bank Verification Number (BVN) Operation and Watch-list for Nigerian Financial System released by the CBN.

    According to the apex bank, the implementation of the framework takes immediate effect.

    The Director Banking & Payments System of the regulatory bank, Dipo Fatokun, who signed the framework, said bank customers are to abide by the regulatory framework for BVN operations and the watch-list for the Nigerian Banking Industry and also report all suspicious or unauthorised activities on their accounts.

    TheNewsGuru.com reports that recent data from the CBN showed that Nigeria experienced a total of 3,500 cyber-attacks with 70 per cent success rate and loss of $450 million within the last one year mainly through cross channel fraud, data theft, email spooling, phishing, shoulder surfing and underground websites.

    Although e-fraud rate in terms of value dropped by 63 per cent, after the BVN introduction and improved collaboration among banks via the fraud desks, the total fraud volume rose significantly by 683 per cent.

    The new regulation is expected to assist the CBN to a great deal, in curbing the menace of fraudsters

    According to Fatokun, the new framework is in exercise of the powers conferred on the CBN, by Sections 2 (d) and 47 (2), of the CBN Act, 2007, to promote the development of efficient and effective payments systems for the settlement of transactions.

    He said the framework provides standards for the BVN operations and watch-list for the Nigerian Banking Industry. The watch-list comprises a database of bank customers’ identified by their BVNs, who have been involved in confirmed fraudulent activity in the banking industry in Nigeria.

    Fatokun said the regulatory framework shall guide activities of the participants in the provision of the BVN operations in Nigeria and that the CBN, Nigeria Inter-Bank Settlement System (NIBSS), Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Bank Customers are participants in its implementation.

    He said the CBN, in collaboration with the Bankers Committee, proactively embarked upon the deployment of a centralized BVN System and launched the BVN in February, 2014. This, he said, is part of the overall strategy of ensuring effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system.

    The BVN gives a unique identity across the banking industry to each customer of Nigerian banks.

    “This framework also defines the establishment and operations of a Watch-list for the Nigerian Banking Industry, to address the increasing incidences, of frauds, with a view to engendering public confidence in the banking industry.

    This framework, without prejudice to existing laws, is a guide for the operations of the watch-List in the Financial System”.

    The Watch-list is a database of bank customers identified by their BVNs, who have been involved in confirmed fraudulent activities.

    The framework is expected to clearly define the roles and responsibilities of stakeholders; clearly define the operations of the BVN in Nigeria; define access, usage and management of the BVN information, requirements and conditions and provide a database of watch-listed individuals.

    It is also expected to outline the process and operations of the watch-List and deter fraud incidences in the Nigerian Banking Industry.

    In implementing this framework, the CBN is expected to approve the Regulatory Framework and Standard Operating Guidelines as well as approve eligible users for access to the BVN information.

    The Nigeria Interbank-Settlement System (NIBSS) is to collaborate with other stakeholders to develop and review the Standard Operating Guidelines of the BVN while the banks are to ensure proper capturing of the BVN data and validate same before the linkage with customers’ accounts.

     

  • Senate summons Magu, seven bank MDs over freezing of Patience Jonathan’s account

    The Senate Committee on Ethics, Privileges and Public Petitions on Monday summoned acting Chairman of Economic and Financial Crimes Commission, EFCC, Ibrahim Magu and the Managing Directors of seven banks over the freezing of the accounts of former First Lady, Dame Patience Jonathan.

    The Senate is inviting seven banks Managing Directors at a time when the case is also being considered in the House of Representatives by the same committee.

    Those banks summoned by the Senate panel are Zenith Bank, First Bank, Ecobank, Fidelity Bank, Stanbic-IBTC, Diamond Bank and Skye Banks.

    The committee, headed by Senator Sam Anyanwu, issued the summons at the hearing of a petition by the former First Lady.

    According to the petition submitted for consideration on behalf of Jonathan by Granville Abibo (SAN), the former first lady complained that both the Economic and Financial Crimes Commission and the National Drug Law Enforcement Agency have at different times “unleashed terror, dehumanizing, degrading and despicable treatment” on herself and her blood relations without justification.

    The accounts in question in which the former first lady’s funds are trapped include that of companies Pluto Property and Investment Company Limited, Seagate Property Development Investment Company and Transocean Property and Investment Limited.

    Also, the account of her NON-Governmental Organisation, The Women for Change Development Initiative, and A. Aruera Foundation as well as Finchley Top Homes Limited and the former Fist Lady’s salary account were frozen, the Senators were told.

    “The accounts of her siblings, Innocent Nyegerefaka, Mohammed Oba and Esther Oba have all been frozen by EFCC without an court order, all because they are blood relations of Dame Patience Jonathan,” the petition further reads.
    Anyanwu, who issued the summons, insisted that the Managing Directors must appear in person as no representative would be accepted.

    But the Acting Chairman of the EFCC, Ibrahim Magu, was absent from the hearing.
    In a letter sent to the committee, the agency said Magu was out of the country and would be returning on Tuesday (today).

    The committee therefore set Wednesday for Magu’s appearance.

    This was even as Patience Jonathan’s counsel informed the committee that they have resolved their differences with the NDLEA and hence would like to strike its name off the petition before the Senate.

    But the counsel to Patience Jonathan, Charles Ogboli, while speaking before the committee said the former first lady’s accounts and that of her relatives were frozen without any court order by the EFCC, adding that this culminated in the death of Lazarus Eware, a brother to Mrs. Jonathan.

    Ogboli said: “The immediate elder brother to Patience Jonathan, Mr. Lazarus Eware, died as a result of unfortunate maltreatment of him by Economic and Financial Crimes Commission as he could no longer cope in the face of this repeated humiliation terror attack and financial handicap.

    “He could no longer meet up with the responsibilities of his family, including children’s school fees and medical bills.

    “As we speak, his lifeless is still lying in a mortuary yet to be buried.

    “The only offence said to have been committed by him is that he is the elder brother to Dame Patience Jonathan.”

  • CBN recovers N50bn excess charges from banks

    …urges customers to report banks charging above recommended charges

    The Central Bank of Nigeria (CBN) said on Wednesday it has recovered over N50 billion from banks in excess charges imposed on customers in the last three years.

    This amount, the CBN said has been returned to bank customers who suffered from these excessive charges.

    Speaking at the ongoing Abuja International Trade fair, the Acting Director of Corporate Communications at the CBN, Mr. Isaac Okorafor, said the apex bank was committed to ensuring that bank customers are not burdened with excessive charges from their banks.

    Okorafor urged bank customers to go to the CBN website to see the approved charges required by banks.

    Besides visiting the website, Okorafor advised the banking public to report excessive charges they feel their banks had imposed on them.

    The CBN spokesman also said the apex bank has so far disbursed N43.92 billion to local farmers through the Anchor Borrowers’ Programme (ABP), an agricultural intervention programme initiated by the bank.

    Okorafor said the programme was done in partnership with 13 participating financial institutions with over 200,000 small holder farmers from 29 states.

     

  • CBN bans banks from taking SMS charges on bulk transfers

    Indications emerge over the weekend that commercial banks can no longer take Short Message Service (SMS) charges on bulk bank transfers done through the Real Time Gross Settlement (RTGS).

    TheNewsGuru.com reports that the Real Time Gross Settlement systems (RTGS) is a funds transfer system where money transfer takes place from one bank to another on a “real time” basis and “gross” basis. Settlement in the “real time” means that the transaction happens almost immediately.

    The banks were previously charging N4 per transaction or text message fee on all bulk transfers, but were directed by the Central Bank of Nigeria (CBN) to halt such fees in the interest of customers.

    TheNewsGuru.com reports that the CBN’s directive has further cut banks’ multiple revenue streams that form a major part of the huge profits they declared in recent years.

    An official in one of the leading commercial banks confided in TheNewsGuru.com that most salary accounts that are funded through bulk transfers are no longer getting transaction alerts because the fee cannot be absorbed by customers or charged on their accounts.

    He noted that banks had started complying with the CBN directive while customers under such arrangements are expected to use bank-specific digital codes to check their account balances as they can no longer get bulk-transfers related transaction alerts.

    TheNewsGuru.com reports that the Nigerian Communications Commission (NCC) had earlier directed that any person subscribing to any of the Nigerian GSM networks must not be charged more than N4 for SMS, sent to other networks. The NCC set a price cap of N4 per message for all domestic Off-Net Messaging Service in line with Sections 4 and Chapter V11 of the Nigerian Communications Act (NCA), 2003.

    Speaking on e-payment at a meeting with financial journalists in Lagos, CBN Director, Banking & Payments System Department, ‘Dipo Fatokun, described e-payment as any form of payment that allows the use of electronics system to initiate, authorise and confirm the transfer of money between two parties.

    The transaction reason, he said, could be for the payment for goods and services, settlement of obligations, gifts among others.

    He explained that e-payments are driven by a network of interconnected systems, which make it possible for exchanges of value between payer and payee, sender and receivers or donor and donee.

    “Banks, Payment Service Providers (PSPs), Financial Authorities and Central Banks play various roles in developing the payments system infrastructure to drive electronic payments, that is nationally utilized. The e— payments industry refers to all stakeholders, operators, regulators, infrastructures, merchants, retailers and the final consumers of the payments products and services. Payment technologies and platforms bind the industry together in a tight ecosystem,” he said.

    Fatokun disclosed that global non-cash (electronic payment) transaction volumes grew at 8.9 per cent to reach $387.3 billion in 2014, an increase, driven by accelerated growth in developing markets.

    “Cards have been the fastest growing payments instrument since 2010, as cheque use has declined consistently and significantly. Debit cards accounted for the highest share (45.7 per cent) of global e-payment transactions and were also the fastest growing (12.8 per cent) payments instrument in 2014,” he said.

    According to him, global non-cash volumes are estimated to have grown by 10.1 per cent to reach $426.3 billion in 2015, aided by high growth in emerging economies across the world, including Africa even as the Nigerian e-payments industry has been evolving in line with the evolution in global payments in both Wholesale and Retail systems.

    “Banks, PSPs, and the CBN have played various roles in developing the payments system and creating products and channels for electronic payments. The Retail Payments Transformation Programme of the CBN has led to the introduction of various electronic payments products and services by operators in the industry. The electronic products are gradually reducing the usage of cheques and cash, as noticed consistently in the annual performance report since the inception of the Cash-less Policy in 2012,” he said.

    He said the volume and value of transactions based on cheques and National Electronic Funds Transfer (NEFT) have been consistently reducing yearly since 2013, while same data for the Nigeria Interbank Settlement System- NIBSS Instant Payment (NIP), Automated Teller Machine (ATM), and mobile money channels have been on the increase. This is an indication of users’ preference for instant value channels over non-instant payment channels.

    “The ATM Channel accounts for the highest volume of transactions, while the NIP accounts for the highest value of transactions annually. This is because the ATM is usually the e-payment channel that new and lower value account holders always interface with, while corporates and upwardly mobile middle class customers make transfers using NIP,” he said.

    The CBN director disclosed that banks and other e-payment service providers operate in a highly regulated environment. “Regulation is necessary to ensure that operators focus on delivering products and services that enable compliance, efficiency, financial stability and a positive customer experience. The attempt to regulate electronic payments in Nigeria started with the CBN Electronic Banking Guidelines, issued in August 2003,” he said.

    Also, in furtherance of its effort to promote and facilitate the development of efficient and effective systems for the settlement of transactions, including the development of electronic payments system, the CBN has since 2008, issued and reviewed several e-payment related framework, guidelines and circulars.

  • Depositors are real owners of banks, not you – CBN tells bank directors

    The Central Bank of Nigeria, CBN, has warned directors of commercial banks who treat bank depositors with disdain to desist from such unprofessional conducts or face sanctions.

    The apex bank also frowned at insider abuses perpetrated by executives of the bank.

    The Governor of the apex bank, Godwin Emefiele said this on Tuesday at this year’s edition of the CBN-Financial Institutions Training Centre (FITC) Continuous Education Programme for Directors of Banks and Other Financial Institutions.

    Emefiele, who spoke on the theme: “The Next Level of Corporate Governance Practice”, said fit and proper persons should be appointed into the boards of banks, adding that corporate governance is undoubtedly an essential pillar in financial system stability.

    He said the failure of banks’ boards in carrying out their oversight functions by checking management excessive risk taking, conflict of interest, undue concentration on short term gains and excessive executive compensation fundamentally affect the ability of financial institutions to meet their core mandates.

    The CBN boss directed independent bank directors to rise up to their responsibilities and be the conscience of their institutions in the interest of depositors and minority shareholders. “Independent directors do not need to be friends of the managing directors. They can’t fire you but the CBN can remove you if you don’t do your job well,” he said.

    Emefiele said banking needed independent directors who “are bold, sound and experienced to do what we want them to do.”

    Emefiele said the CBN will get tougher on insider related loans, adding that many bank chiefs and executive directors borrow from the banks at very low interest rates.

    He said banks are not owned by shareholders who he said were simply used by God to establish them. He said depositors funds are 10 times higher than shareholders’ funds, hence the interest of the depositors should be paramount. “A bank managing director who feels he set up the bank has only been used by God to set up such bank. The real owners of the banks are depositors,” he said.

    The apex bank chief noted that though shareholders are important to banking, the most important stakeholders are the depositors. “It is important for us to ensure we all protect them. That is why in the programme, we said that independent directors must remain independent and perform their roles and responsibilities, no matter how tough it is. They have to look at insiders who are shareholders and tell them what is good and what is not right. Yes, we are going tough because it is a dynamic environment and we will continue to take drastic actions against that insider abuse,” he said.

    He spoke of a bank with 4.5 million depositors that the CBN is monitoring but has decided the lender will not be allowed to go down.

    “If we allow the bank to go down, how can we explain to the 4.5 million customers that their money is lost? The impact of such closure on the economy will be tough,” the CBN boss said.

    To him, running an efficient and sound bank is all about strong governance, adding that weak governance ensues when shareholders employ inexperienced or unenlightened people to run their banks.

    “Weak governance will ensure that liquidity position in banks is eroded. We want to make sure that banks remain strong by ensuring that strong governance exists. It is also about checking your conscience to tell yourself, have you performed your role diligently, that you are not only serving your own interest as shareholders but also serving the interest of larger stakeholders? These are some of the issues we will be looking at going forward because those depositors are very important,” he added.

    ”It encompasses the protection of minority shareholders, disclosure provisions, the role and structure of the board, complexity on the definition of related parties, compensation structures and much more. Therefore weak corporate governance can undermine financial stability by heightening vulnerability of financial institutions to external shocks,” he said.

    He said institutions with sound corporate governance and effective board oversights are more resilient to shocks and operate more profitably. “Given the crucial financial intermediation role which banks and other financial institutions play in the economy, corporate governance for financial institutions is, arguably, of great importance in contrast to governance in non-financial companies,” he said.

    He said that prior to the global financial crisis of 2007 to 2009, it was taken for granted that the banking sector in Nigeria was safe and sound. However, this trust proved to be misplaced as it was realised that none of the 25 banks that scaled the CBN consolidation exercise was immuned from failure if they operated in a poor corporate governance environment.

    Accordingly, the 2014 CBN Code of Corporate Governance for Banks and Discount Houses (an improvement on the 2006 Code) was one of many responses to the industry’s post-consolidation corporate governance challenges arising largely from the integration processes. The mass enlightenment on corporate governance in the industry today could very well be attributed to the issuance of the CBN Code. The implementation of the Code largely addressed ineffective board oversights; overbearing influences of chairmen on MDs/CEOs; weak internal controls and prolonged tenure on the board amongst other anomalies.

    “While appreciable momentum had been attained in corporate governance practices in the Nigerian Banking Industry, we need not rest on our oars as vulnerabilities are still evident. The recent economic recession has shown that the financial industry still harbours weaknesses in governance, exemplified by instances of unclear rendition of returns, corporate governance abuses, such as unreported losses, huge exit packages for directors, insider non-performing loans, over-domineering executive management, contravention of regulatory/prudential guidelines and lending limits, poorly appraised credits and weakening of shareholders’ funds among others. Overall, the huge challenge of ‘key-man’ risk abound in our industry,” Emefiele said.

     

  • ‘Unfreeze Patience Jonathan’s accounts immediately’ – Reps order First, Union, Eco, other banks

    ‘Unfreeze Patience Jonathan’s accounts immediately’ – Reps order First, Union, Eco, other banks

    The House of Representatives Committee on Public Petitions has directed six commercial banks to free accounts operated by former first lady, Patience Jonathan.

    The committee chaired by Rep. Uzoma Nkem-Abonta (Abia-PDP), gave the directive on Tuesday in Abuja at a hearing on a petition by Jonathan.

    The affected banks are Union Bank, First Bank, EcoBank, Diamond Bank, Fidelity Bank and Skye Bank.

    TheNewsGuru.com reports that the Economic and Financial Crimes Commission (EFCC) had directed the banks to freeze the account over allegations of some irregularities over the sources of the funds.

    Officials of Union Bank, led by a lawyer, Mr Kenneth Otowo, had told the panel that the bank placed Mrs Jonathan’s account under a ‘precautionary restriction’ following a directive by the EFCC.

    “We received a communication from EFCC to put a precautionary restriction on the account. The letter was dated March 21, 2016, so we had to act based on that,’’ he said.

    But, the committee deplored the action, saying that the bank could only take such decision if EFCC proved that it had obtained a court order to that effect.

    “Until EFCC proves otherwise, I’ll ask you to remove the precautionary restriction on the account. Let me tell you, whatever you’ll do, you must follow the law. A bank can’t hold a legal entity to ransom.

    “I want to order all other banks that all the accounts that have no specific pending order from the courts, please release them.’’ the committee chairman said.

    Counsel to EcoBank, Mr Afam Osigwe, said Jonathan’s account could not have been on restriction because there was no court order to that effect.

    He later said that the bank would cross-check its records and get back to the committee.

    As for Diamond Bank, Jonathan’s lawyers said three of her accounts were frozen there.

    However, Mrs Unoma Ndulue, who represented the bank, said two out of the three accounts were fully operative, while one was closed.

    On Fidelity Bank, Mrs Jonathan’s lawyers said they did not have a direct issue with the bank, but that it was through the EFCC.

    Officials of First Bank and Skye Bank were not present at the meeting.

    Meanwhile, the committee has given Mr Ibrahim Magu, the EFCC acting Chairman, up to Oct. 4 to appear before it or have arrest warrant issued against him.

    Similarly, the panel asked Jonathan’s lawyers and the Federal Inland Revenue Service (FIRS) to reconcile their positions on an alleged tax default of over N10 million.

    FIRS had said that Aridolf Resort Wellness and SPA, owned by Mrs Jonathan, failed to pay taxes in spite of serial reminders.

    However, her lawyers insisted that they had paid all their taxes to the agency.

  • Senate vows to expose, prosecute banks used for MMM fraud

    The Senate on Thursday vowed to expose all commercial banks in the country used by discredited Ponzi scheme popularly called Mavrodi Mondial Movement (MMM).

    The upper chamber said the exposure of the banks used for MMM became necessary so that the affected banks would face appropriate sanctions.

    The Vice Chairman, Senate Committee on Information and Communication Technology (ICT) and Cybercrime, Foster Ogola, stated this during an interactive session with banks executives on cyber crime.

    According to him, exposing the banks used for the deal would help to prevent such fraud in future.

    He also said the Senate would come up with a legislation making digital education compulsory in both primary and secondary schools in Nigeria.

    Ogola said: “We need to secure our cyberspace and financial sector against all forms of crimes or frauds as seen with the MMM operators, who came in collaborations with insiders, expressly entered into the banking system, duped Nigerians and bolted out.

    “We have to stop anything meant to defraud us from getting or hacking into our digital system. The first step now is to expose all the banks involved in the MMM fraud.

    “As a chartered fraud examiner, when the scam called MMM Ponzi scheme came with its 30 per cent interest rate in 30 days early last year, I told people that it was a fraud but many refused to listen and some of them later learnt their lessons in bitter ways.”

  • Forex: Customers ignore BDCs operators, trade directly with banks

    Forex: Customers ignore BDCs operators, trade directly with banks

    Indications emerge over the weekend that over 700 Bureaux De Change (BDC) operators are inactive in the Central Bank of Nigeria’s (CBN’s) Forex Window as forex end users embrace commercial banks.

    The preference for commercial banks followed the uncompetitive rate regime that shifted the business patronage in favour of the lenders. The practice has cut BDCs’ turnover, putting their businesses under threat.

    Confirming the development at the weekend, Association of Bureaux De Change Operators of Nigeria (ABCON) President Aminu Gwadabe said the BDC business had been badly affected by the uncompetitive rate as the CBN sells dollars to BDCs at higher rate compared to what the regulator sells to commercial banks, yet both institutions target the same market segment and customers.

    On the CBN’s approved list, 3,389 BDC operators have been licensed and are expected to get $40,000 weekly from the CBN Forex Window. The apex bank disburses about $135.5 million to the 3,389 registered BDCs weekly to sell to forex end users. The funds are for Personal Travel Allowances (PTA), Business Travel Allowances (BTA), medical needs and school fees.

    The BDCs, Gwadabe said, buy dollar from the CBN at N360/$1 and sell to end users at N362/$1 while the regulator sells to commercial banks at N358/$1 and the banks sell to end users at N360/$1.

    Gwadabe described the buying rate for the BDCs as “uncompetitive” and “a big disincentive for many forex users to patronise the operators. He said the banks and the BDCs service the same market segment, they should get dollars at the same rate to enable both institutions compete favourably.

    According to the ABCON boss, the banks enjoy a large customer base with the customers having their accounts debited to cover the cost of purchase. Such convenience plus a lower rate put the banks at an advantage position to attract more customers than BDCs, he said.

    He lamented that BDCs are not only buying at exorbitant rate, but also sell at a rate higher than that of the banks, hence creating low patronage for the operators.

    Gwadabe advised the CBN to review the rate at which the dollar is sold to the BDCs to boost the recovery of the naira against dollar. The naira has remained at N368/$1 at the parallel market in the last one week, a major improvement from N520/$1 it exchanged last February.

    He said the success recorded by the CBN in stabilising the naira was largely contributed by the BDCs, which remain backbone of the retail forex segment of the economy.

    “The CBN should be proactive enough to quickly review the BDC buying rate to ensure effective competition among all the stakeholders. There is no need to give the banks undue advantage over the BDCs as is currently the case based on the level of disparity seen in the dollar buying rate by both sectors. Nothing stops the CBN from ensuring that both the banks and BDCs buy dollars at same rate,” he stressed.

    Gwadabe said the rate challenge faced by BDCs, if not checked, would trigger a liquidity crisis that may derail the ongoing recovery of the naira against the dollar. He said the BDCs will continue to support CBN’s determination to stabilise the exchange rate, and strengthen the value of the local currency.

    Gwadabe also called on the CBN to increase the volume of Personal Travel Allowances (PTAs) from $4,000 to $8,000; Business Travel Allowances (BTAs) from $5,000 to $10,000; school fees from $5,000 to $20,000 and medicals from $5,000 to $15,000 quarterly to deepen liquidity in the market.

    Gwadabe praised the CBN for liberalising the forex market and making more dollars available, adding that making the funds readily available in right volumes will double the positive impact of the policies on the economy.