Monday, February 27, 2017

USA Africa Dialogue Series - Re: Anti-Graft War: Depositors Evade BVN, Move Cash Out Of Banks

My People:

See what we say?  A lot of money - naira and dollars - outside the banking system, aided by bankers, for fear of BVN.....and TSA is making it more difficult for civil servants to re-join the looting....

Both the TSA and BVN have immolated quite a number of corrupt persons in the country, but these steps must be followed up with:

  (1) interrogation of unclaimed bank accounts that BVN has "stranded";  they are just waiting for government to "look the other way."  By now, any unclaimed BVN-stranded accounts should be confiscated.

 (2)  hidden bank accounts that TSA has not "arrived" at due to collusion of some MDAs with banks.

  (3)  fat bank balances that don't seem to have legitimate source of earning, nor are they "moving" in the real sector;  we are talking of BILLIONS  and TENS of BILLIONS of Naira in individual and corporate accounts.  According to the report below, some of them have already been moved out - into wooden and earthen sheds near your neighborhood!

  (4)  un-registered real estate holdings all over the country whose ownership is "unknown" or suspect, none of them yielding any property taxes.  

We have to be more serious in addressing corruption in the country.

BVN - TSA - GIFMIS - IPPIS -  we must press on.....

Bolaji Aluko
Shaking his head

Anti-Graft War: Depositors Evade BVN, Move Cash Out Of Banks

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As the anti-corruption crusade of the federal government continues to gather momentum, especially with the introduction of the whistleblowing policy recently, some bank depositors, especially looters of public treasury, have devised new ways of concealing funds, which involve moving ill-gotten monies away from the banking system.

Checks by LEADERSHIP revealed that the corrupt individuals now move huge sums of money in their accounts from the banks secretly, with the help of some bank officials.

It was also gathered that for fear of losing high net worth customers, some bank officials disconnect accounts of some of these corrupt persons from their Bank Verification Number (BVN) to allow transactions, involving huge sums of cash and then reconnect them after the transactions have been completed.

Enveloped in apprehension of being tracked with the aide of whistle-blowers, the corrupt public officers now prefer stashing their looted funds in several abandoned property across the country.

The BVN is a tool put in place by the Bankers Committee, led by the Central Bank of Nigeria (CBN), to combat electronic fraud in the nation's banking system as well as ensure that every bank customer is identifiable and transactions easily traced.

Rattled by the introduction of this tracking numbers, looters and money launderers resorted to stashing money in places other than the banks.

Recently, the Economic and Financial Crimes Commission (EFCC) recovered $9.2 million and £750,000 stored in a safe by a former group managing director (GMD) of the Nigerian National Petroleum Corporation, Mr Andrew Yakubu and another N1.25 billion from a public servant.

Confirming the new tricks adopted by this category of bank depositrs to LEADERSHIP yesterday, former president of the Chartered Institute of Bankers (CIBN), Mazi Okechukwu Unegbu, said the BVN had been a major setback for looters in the Nigerian financial system.

According to him, the looters of the nation's treasury had been in the system before BVN was implemented and when BVN came, "they moved their monies outside of the banking system, which is why we can see them storing cash in their homes like the one that was recently discovered."

He, however, said, "BVN or no BVN, people are still looting; there is still corruption in the system, only that they are using more of cash now."

Also, a banker who spoke to our correspondent over the weekend noted that, while it is a punishable offence for any bank to operate an account without BVN, there are instances where bankers connive with customers to operate accounts without BVN.

He explained that, not wanting to lose high net worth customers, some bank officials unblock accounts to allow transactions and then block it after the transaction has been consummated. ''While it is rare, it is also not unusual to find bank officials waive certain KYC as favours to allow the customers consummate transactions," the banker who does not want his name in print stated.

Although the BVN rule stipulates that there will be no withdrawal, banks are allowed to still take deposits into those accounts, even as some customers who have fictitious accounts have continued to make deposits into those accounts without BVN.

According to Nigeria Inter Bank Settlement System (NIBSS), the custodian of banking industry data, total bank accounts in the country stands at 95.22 million as at December 2016.

Active accounts as at December 2016 stood at 65.48 million, while the number of accounts linked to BVN at the end of last year was 49.99 million. This figure has, however, risen to 50.92 million as at last month, leaving about 14.56 million active accounts that are without BVN.

Some bank officials who spoke to LEADERSHIP, however, denied that it was possible to operate bank accounts without BVN, as the CBN is strict on the implementation of BVN. An official of a top tier bank who insisted on remaining anonymous, said the apex bank had directed that BVN should be part of the Know Your Customer (KYC) requirements in opening bank accounts.

The BVN which is an addition to the Know Your Customer requirement is to ensure that the bank knows who is who and also serve as a fraud management tool in the industry by ensuring that accounts used for fraudulent purposes are identified and blacklisted, giving rise to the framework on watch-list.

According to the exposure draft issued by the CBN, the watch-list is a database of bank customers identified by their Bank BVNs who have been involved in confirmed fraudulent activities.

The watch-list for the Nigerian banking system was introduced by the apex bank to address the increasing incidence of fraud/forgeries and other unethical practices, with a view to engendering the needed public confidence that will ensure a safe and sound financial system.

It was also learnt that although the deadline for the registration for BVN has elapsed, about 14.56 million active accounts are still being operated without BVN.

Registration for BVN had elapsed last year January for customers within the country and, according to the directive of the CBN, accounts without BVN are not to be allowed to make withdrawals, either cash or transfers.

Following the expiration of the registration deadline, many accounts had become dormant and some had been closed. Also, there had been an increased number of change of names and the BVN along with the Treasury Single Account (TSA), which had exposed ghost workers in many states.

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