October 23, 2017

Money Laundering: Financial experts laud FG’s move to freeze non-BVN accounts

Money Laundering: Financial experts laud FG’s move to freeze non-BVN accounts

(L-r) Ag. SGF, Habiba Lawal; Vice President Yemi Osinbajo; President Muhammadu Buhari; Justice Minister, Abubakar Malami; Minister for Agriculture, Ausu Ogbe and the Minister of State for Agriculture, Heineken Lokpobiri singing the National anthem during the Federal Executive Council Meeting at the State House, Abuja. Photo by Abayomi Adeshida 04/10/2017

Financial experts on Monday said the Federal Government’s move to freeze all accounts not covered by Bank Verification Number (BVN) would check money laundering.

The financial experts told Newsmen in Lagos while reacting to the court order by the Federal Government mandating banks to freeze all individual and corporate accounts not covered by BVN.

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

A Federal High Court in Abuja ordered the Central Bank of Nigeria (CBN) and the 19 commercial banks in the country to disclose all accounts in their custody and the balances in such accounts.

The court ordered the banks to disclose the details of all such accounts, their owners and their proceeds in their affidavit of compliance deposed to by their Chief Compliance Officers.

It also made an interim order directing the banks to freeze all the said accounts by stopping “all outward payments, operations or transactions’’ pending the hearing of the substantive application seeking the forfeiture of the balances in the accounts to the Federal Government.

The banks were also directed to disclose “any investments made with funds from these accounts without BVN in any products’’.

Such investments to be disclosed by the banks as directed by the court include “fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and any other relevant information related to the transaction made on the accounts’’.

Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said that compliance with the court order would help to check fraudulent practices, including money laundering.

“I’m totally in support of the court order to freeze all individual and corporate accounts in commercial banks not covered by the BVN.

“It should have even been made long before now considering that the deadline issued by the CBN expired long ago,’’ Uwaleke said.

He said that operating an account without BVN violated the “know your customer’’ directive by the CBN as well as the money laundering Act.

“Why should a bank operate a non-BVN account except for fraudulent reasons?

“So, compliance with the court order will help to check fraudulent practices including money laundering,’’ Uwaleke added.

He said that it would also help to expose questionable sources of wealth such as ones from crime like kidnapping and theft of public funds.

“It will boost the government’s fight against corruption, improve the country’s image and promote investor confidence in Nigeria,’’ he stated.

Prof. SheriffdeenTella, Professor of Economics, Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, said that all accounts by now should have BVN unless an illegal account.

Tella said that it was wrong for banks to allow transactions in such accounts within the last 18 months.

“If transactions have been taking place in such accounts within the last 18 months, the bank itself will be in trouble,’’ Tella said.

He said that it was right to execute the order to allow for forfeiture of the illegal funds.