As 14-day Ultimatum on BVN Expires, Fate of Nigerians in Diaspora, Intestate Accounts Come under Focus

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Obinna Chima and Bamidele Famoofo

If the order handed down on October 17 by Justice Nnamdi Dimgba of the Federal High Court, Abuja, to 19 commercial banks in Nigeria and the Central Bank of Nigeria is anything to go by, then tens of millions of bank customers whose accounts are without the Bank Verification Number will no longer have access to their monies in such accounts. They could forfeit the monies to the Federal Government of Nigeria.

The court ordered the banks to disclose all accounts in their custody, the balances in such accounts, the owners, and their proceeds in their affidavits of compliance deposed to by their chief compliance officers. The court also directed the CBN and the Nigeria Interbank Settlement Systems “to validate the information contained in the affidavit of compliance/disclosure filed by the respective 19 banks” within seven days from the date of service of the orders on them. The judge was ruling on an ex-parte motion filed on September 28 by the federal government.

One of the orders from the ruling reads, “An interim order is hereby made granting leave to the applicants or any officer authorised by them to advertise the accounts without BVN disclosed by the banks in a widely circulated national newspapers as notice to any person or body corporate or financial institution who may have any interest in any of the said accounts to claim ownership within 14 days of the publication of the order and show cause why the proceeds in the account should not be permanently forfeited to the Federal Government.”

Freezing funds in bank accounts without BVN link is one of the anticorruption strategies of the President Muhammadu Buhari administration. The government intends to recover ill-gotten wealth stashed in the coffers of banks in Nigeria.

But the pronouncement by the Abuja High Court has attracted mixed reactions from Nigerians. While some believe the order given by the court to the CBN and the commercial banks to freeze accounts not linked to BVN is insensitive, others say it is a step in the direction. Yet, a few say CBN and the banks should put measures in place to enable those without BVN, especially diaspora Nigerians, get linked to the verification system launched on February 14, 2014 to register all customers in the country’s financial system using biometric technology.

About 30,511,506 BVNs have been issued in Nigeria, according to the CBN. The Nigeria Inter-Bank Settlement System says 45.85 million bank accounts remain unlinked to BVN. But in relation to the active accounts, the number of unlinked accounts is put at 15.72 million, as at February.

A Senior Lecturer in Development Economics at the Lagos Business School, Dr. Bongo Adi, said the move by the federal government to make bank customers forfeit their monies was morally wrong and sent out a bad signal about the country’s banking system.

Adi stated, “If we consider it from a moral point of view, there is something we call in economies error of targeting. There is the Type 1 error and there is the Type 2 error. The Type 1 error is that you are likely to miss those whom you target. Let’s say they are looking to stem corruption or financial irregularities. But there is the likelihood that they may not get those they are looking for.

“So, there is no way we can prove that the accounts that had not been linked to BVN have some form of malignancy. Now from an economic point of view, don’t forget that there are Nigerians in the diaspora who have money in the system but have not gotten the chance to come around and register for their BVN. This is going to discourage financial inclusion.”

In his reaction, the chief executive of Financial Derivatives Company Limited, Mr. Bismarck Rewane, also pointed out that if the decision of the court was implemented, it would lead to a liquidity squeeze in the market. But Rewane stated that the court ruling would help sanitise the system.

According to Rewane, “It does mean that all that money would be transferred to the central bank and that would drain liquidity. Let’s say it is N500 billion in all the banks and the banks are to comply by transferring the monies to the central bank account, which is the federal government’s bank.”

A manager with one of the commercial banks in Lagos, Mr. Sanmi Akinleye, said those mostly affected by the BVN issue were Nigerians in the diaspora. Akinleye said, “Those Nigerians in the United States of America, who have money in commercial banks in Nigeria, only have four points in the whole of the United States to register for BVN.”

He argued that both the CBN and the 19 commercial banks must seek ways to make necessary provisions for Nigerians, not only in the United States, but also in other countries to have the opportunity to link their accounts to BVN.

Senior Special Assistant to the President on Foreign Affairs and Diaspora, Mrs. Abike Dabiri- Erewa, had earlier pleaded with the CBN to further extend the deadline for the BVN registration by the Diaspora for them to retain their monies in the banks.

Dabiri-Erewa said Nigerians in the diaspora had contributed immensely to the growth of the Nigerian economy by remitting billion of dollars annually through the banks to the economy. She believes the diasporas should be given some consideration now that they need their country to protect their hard-earned monies in the local banks.

But special aid to the president on prosecution, Okoi Obono-Obla, who spoke recently on the court’s pronouncement, said the Buhari administration would be justified should the funds in the accounts be taken over by the federal government. Obono-Obla, who is also Chairman of the Special Presidential Investigation Panel for the Recovery of Public Property, regretted the huge number of unlinked accounts.

“From central bank statistics, 46 million accounts are yet to be linked with BVN numbers after three years,” he said, stressing, however, that he does not know how much money the accounts hold.

He said those who had not linked their accounts to BVN had violated a CBN policy and should have themselves to blame.

“Anyone who has not complied with that directive, it means that his account is fraudulent and so whatever is there should go to the government.”

Obono-Obla added, “Our laws are not even as strict as what we find in the U.S. In the United States, if you do not operate a bank account for three years, all the money in that account goes to the federal government of the United States of America…

“You don’t expect the government to sit back. Government must take action to ensure that these accounts are closed or government must take action to find out who are the owners of these accounts. Why have they not linked these accounts with BVN as directed by the Central Bank of Nigeria, the regulator?”

The presidential aide also said, “I will never absolve the banks from the endemic and pandemic corruption we have, because the banks promote corruption. They know these accounts, they know people who bring money into these accounts and some of these accounts are fake.”

But the 19 commercial banks affected by the court ruling are in the court, challenging the position of the federal government and the Abuja high court. They are allowed under the law to challenge the order of the court up to the Supreme Court.

Meanwhile, a lawyer, Ebun-Olu Adegboruwa, has criticised the order for forfeiture of funds in accounts without BVN. Adegboruwa said the BVN was a policy decision not “backed by law”. He also faulted the “bindingness” of the order on millions of bank customers who he said are not directly parties to the suit.

He is quoted as saying, “I think it is improper to obtain interim orders to freeze bank accounts of estates that are in dispute between the beneficiaries, of estates of deceased persons that are still being contested, of profits of companies that are still subject to litigation or other disputes, just to mention a few examples of the arbitrariness of these orders.

“There is nothing in section 3 of the Money Laundering (Prohibition) Act 2011 that makes BVN a condition precedent for operating a bank account in Nigeria. Nothing at all. What the law requires is verifiable identity of the customer, such as name, address, photographs, identity cards, etc. BVN is a policy decision of the Central Bank of Nigeria and a court of law should not base its orders on executive policies that are not backed by law.”

Some bank customers who spoke with THISDAY expressed divergent views.

A former banker, Mr. Moshood Isamotu, said forfeiting money in accounts not linked to BVN was too harsh. Isamotu argued that the federal government should have asked the banks to place a no withdrawal order on the affected accounts until BVN was supplied by the holders of such accounts.

Mr. Ahgboola Thunji, a teacher, believes the government should have a rethink on the planned takeover the funds in accounts without BVN. Thunji said, “I think the government should have a rethink for the following reasons: first, some account holders who stay abroad have no access to do this BVN. Secondly, some of the people who own these accounts are dead and the families have not been able to access the money and nobody to do the BVN, and there are some other cases like that. I think the CBN should tell the concerned to register these complaints before announcing forfeiture of such monies.”

Both men, however, expressed support for the federal government’s efforts to recover looted funds.