It is a fact of life that banking institutions in the country have been known to be willing 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.
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.