It is a fact
of life that banking institutions in the country have been known to be w
illing
receptacles, custodians, conveyors, and promoters of illicit financial flows.
Many therefore, believe that if the war on corruption embarked upon by the
Federal Government of Nigeria (FGN), is to be successful, the banking sector
where financial flows intended for domestic and international destinations are
remarkably huge, should be focused on. The necessary caveat being that the war
target(s) must be properly defined and all strategies effectively deployed in a
manner that will not result in unintended collateral damages.
The
President Muhammadu Buhari-led administration recently unfolded a 360 degree
turnaround anti-corruption strategy by securing a Federal High Court Order,
based on an ex-parte motion filed by the Attorney General of the Federation and
Minister of Justice. The order restrains the Central Bank of Nigeria (CBN) and
nineteen (19) deposit money banks (DMBs) in the country from operating accounts
without Bank Verification Number (BVN); and grants temporary forfeiture of
balances in such accounts to the Federal Government of Nigeria. The court also
compels the DMBs to, among other things, disclose the names of the accounts as
operated; account number(s); outstanding balances; domiciliary accounts and
branches/locations where the accounts without BVN are domiciled. Beyond these,
the affected DMBs are directed to disclose, among other things, any investments
made with funds from accounts without BVN in any products including fixed/term
deposits, bankers acceptances, commercial papers; and any other relevant
information related to the transactions made on the accounts.
Further, the
court order compels CBN and Nigeria Interbank Settlement System (NIBSS) to
validate the contents of what the banks will submit to the FGN under an
affidavit of compliance within seven (7) days of CBN being served the order.
The required validation, no doubt, anticipates that the banks will not submit
accurate and or complete details as ordered. It thus, places the burden of
ensuring the correct thing is done on CBN and NIBSS. Imperatively, it
challenges the banks to prove themselves above reproach by compiling and
submitting accurate and complete details as required.
The bottom
line: subject to final determination of a substantive suit, the ex-parte order
temporarily freezes all the accounts without BVN in the affected 19 banks by
stopping all outward transactions (including Bills of Exchange).
For those
who have watched the way the government has been executing its anti-corruption
war, not a few eye-brows had been raised and uncomplimentary remarks made,
especially with regard to its perceived partiality. It is hoped that the new
development of fighting the war through the banking system will unveil all
claims of those who have been involved in illicit money, which they have
stashed in the banks and thus, put to rest all claims of biases and ensure the
war is successful.
Bringing
these aspirations to reality is significantly dependent on the seriousness of
government in the matter, the astuteness and forthrightness of CBN and NIBSS,
transparent compliance by the operators and quick response by bank customers
who are yet to have their BVN.
Furthermore,
securing the Court Order, as good as it may seem, is clearly not enough.
Single-minded transparent implementation is what is required from all those who
will be involved in its execution and supervision. This requires their being
properly and adequately made to know, understand and appreciate the rational,
ultimate objectives being pursued, and the importance government and the people
of this country attach to the success of this new strategy. To signify its
seriousness, government may obtain from the implementers, written affirmation
or sworn affidavit to carry out the exercise diligently, ethically and
professionally in the best interest of this nation and its people.
While the
foregoing and the overall intendments of the government in going through the
banking system route to further prosecute a successful anti-corruption war may
be understandable, it is imperative that government recognizes the need to
ensure that innocent bank customers, the banking system and the economy are
protected. The customers, based on their confidence in the government, have
deposited their hard-earned money in banks licensed by the government.
Government must therefore, not betray that confidences for such betrayal will
portend grave danger for the future of savings, investments and economic
recovery, growth/development.
Much as it
is distasteful that since February 2014 when the BVN was launched, some 45.85
million accounts are yet to be linked to BVN, according to NIBSS (meaning that
a significant number of bank customers are yet to play their roles), sight must
not be lost of the fact that a variety of justifiable reasons (like illiteracy
cum ignorance, terminal/severe ill-health, unawareness, death and challenges associated
with obtaining Letters of Administration, insignificant balance in the account,
account is in debit, overseas residents, etc) may be responsible for the
situation. Assuredly, it cannot be the intention of government to confiscate
innocent peoples’ money. It is therefore, its responsibility to validate this
assertion by ensuring that it formally announces to the populace that it will
only confiscate money in bank accounts without BVN, if the owners do not
regularise the accounts within a specified period of time. That time-frame
should be long enough to prove to everyone that nothing bad is intended.
Secondly, the exercise, it should be explained, will be focused on non
BVN-linked accounts and except for accounts involved in proceeds of crime, more
convenient, flexible and cost effective arrangements will be made for owners of
the others to prove their ownership rather than go to court. Fourthly, that the
affected banks will not be jeopardized; and fifth, as much as legally and
practicably possible, implementation of the order should be with cognizance of
the wider macro-economic implications.
It is
therefore, in anticipation that the government would diligently see through
this strategy without any foreseeable and preventable backlash that the initiative
and government deserve to be commended.
[
As for bank
customers, the big Iroko tree has given apparent sign that it will soon fall.
Woe shall be unto whosoever hangs around it when it comes crashing. It is
strongly advised that bank customers obtain their BVN without further delay.
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