Banks and their supervisor, the Central Bank of Nigeria (CBN), have been accused of working to derail the government’s anti-corruption war.
The Federal Government and the Attorney-General of the Federation (AGF) are querying the double standards allegedly being exhibited by the CBN and the banks in opposing their effort to ensure strict implementation of the Bank Verification Number (BVN) policy.
The banks initiated the policy through the Bankers Committee to, among others, check financial crimes.
The Federal Government and the AGF claimed that the banks’ opposition to the suit they filed over the implementation of the BVN policy confirmed their suspicion that the banks were allegedly benefiting illegally from the haphazard implementation of the policy and the bar placed on customers without BVN since the deadline ended about two years ago.
These are contained in court documents filed by the government and the AGF in response to an objection filed by the commercial banks to a suit they filed seeking, among others, to ensure a total implementation of the BVN policy or the forfeiture of funds in accounts without BVN, in furtherance of the government’s war against corruption.
The Federal Government and the AGF filed the suit before the Federal High Court, Abuja on September 28, through their lawyer, A. Danjuma Tyoden.
Defendants in the suit are 19 commercial banks and the CBN.
The commercial banks are: Access, Citibank, Diamond, Ecobank, Fidelity, First, First City, Guaranty Trust, Heritage, Keystone, Skye, Stanbic IBTC, Standard Chartered, Sterling, Union, Unity, Wema and Zenith.
On October 17, Justice Nnamdi Dimgba granted some reliefs in an ex-parte motion for interim injunctions filed by the plaintiffs, including ordering the banks to provide information on the accounts without BVN, temporary freezing of the accounts and for the owners to show cause why funds in the accounts should not be forfeited to the government.
Rather than comply with the court order as it relates to them, the banks filed a notice of objection, querying the competence of the suit, the October 17 orders by the court and the court’s jurisdiction to hear and determine the suit.
In the joint notice of objection filed by their lawyers – Paul Usoro, Babatunde Fagbohunlu and Adeniyi Adegbonmire (all SANs) – the 1st to 18th defendants asked the court to decline jurisdiction over the suit, dismiss it and vacate the order made on October 17.
Angered by the position taken by defendants and the CBN’s failure to support the suit, but allegedly stealthily working with the banks, the government and the AGF filed a counter to the banks objection, accusing them of, among others working to frustrate the anti-graft war by shielding rogue customers, who have refused to acquire the BVN because of dirty funds in their accounts.
In a supporting affidavit deposed to by Usman Dakas, the government and the AGF said: “The applicants (the banks) do not wish to comply with the interim order of this court and disclose the accounts without BVN and their holders in order to frustrate the plaintiffs’ anti-corruption policies that would benefit the entire nation.”
They stressed in their written address that the banks’ motive for electing to challenge the competence of the suit rather than comply with the order for them to produce information on the accounts without BVN, was ploy to frustrate the government’s anti-corruption war.
The plaintiffs said: “The applicants have filed this motion to frustrate the plaintiff’s constitutional responsibility to ‘abolish corrupt practices’ and the clear directives and regulations of the CBN on the BVN scheme so that they can continue to keep the funds in the accounts without BVN and be trading with them and declaring fat profits for their various shareholders.
“Is it not worrisome that while the banks are happy not to allow the customers, whose accounts are not covered by BVN, to operate the said accounts, yet they want the interim order of this court, directing them to disclose these accounts and their holders, dismissed and or struck out?”
They argued that it is not the duty of banks to complain, because since the BVN policy was directed at the customers and not the banks, only the customers could complain about any order made in respect of their funds trapped in the accounts without BVN.
On the banks’ request that the court should decline jurisdiction to entertain the suit brought under Section 17(1) of the Advance Fee Fraud Act (AFFA), which could only be prosecuted by the Economic and Financial Crimes Commission (EFCC), the plaintiffs argued that the law did not bar them and other government agencies tasked with the responsibility of fighting corruption from suing under it (the portion of the AFFA).
They argued that the AFFA, being an Act of the National Assembly, is subject to the Constitution, which implies that the EFCC referred to in Section 17(1) of the Act being an agent of the Federal Government, the Federal Government can decide to exercise the right conferred on the EFCC under the AFFA by itself, because “the sovereign (FG) cannot be authorised by its agent”.
The plaintiff faulted the banks’ argument that the BVN policy did not fall under the Money Laundering Act (MLA) and argued that BVN policy was in furtherance of due diligence and know your customer provisions of the MLA.
They urged the court to disregard the banks contention in that regard and argued that should the court hold, as contended by the banks, that the MLA did not provide punishment for non-compliance with the BVN regulations, it would defeat the objective of the law, which is to ensure that the banks are not made safer haven for keeping illicit and laundered funds.
The plaintiffs wondered why the banks, who admitted that they have the responsibility to enforce the due diligence and know your customer provision of the MLA, are now seeking, by their current motion, to shield their customers and doing their case for them?
They noted that “it is ironical that they (the banks) are fighting the order of the court asking them to disclose accounts without BVN. Does it lie in their mouth to defend customers, who are in violation of the CBN regulation that constitute part of the due diligence and know your customer requirement of the MLA?
“Indeed, banks occupy a position of trust and must act in the overriding interest of the public where and when necessary in the fight against crime, expose people with dual personality and must not benefit from wilful complicity, given that the person who steals is just as guilty as the one who keeps the stolen funds.
The plaintiffs noted that not only did the commercial banks fail to provide information to the accounts without BVN, the CBN appears to be working with them, the CBN Governor having failed to respond to his letters written to him on the issue.
The lawyer to the plaintiff, Tyoden, said his letters to the CBN Governor, dated June 28 and July 19, 2017 were not only ignored, the Chartered Institute of Bankers of Nigeria (CIBN) demanded for CBN’s position on the issue before it could assist.
The plaintiffs stated: “We submit that the refusal of defendants/applicants (the banks) to furnish the plaintiffs with the facts relating to the accounts in their custody without BVN is because, if produced, the suspicion of the plaintiffs would be provedý.
“In fact, if the defendants/applicants have nothing to hide, why are they refusing to file the affidavit of disclosure as ordered by this court?
“The funds in the accounts not covered by BVN is not their (banks’) property, why are they now scared of forfeiture and crying more than the bereaved, when the law allows opportunity to be given to the account holders to show cause after publication, before a final forfeiture order is made?”
At the last proceedings in the case on November 15, the court varied some of the earlier orders made, following agreement by parties that the orders had created unintended consequences.
The court, which had stayed further operation of such accounts pending the determination of a case pending before it, said on November 15 that the accounts could be operated once the owner registers for BVN.
Justice Dimgba announced the modification after parties in the case agreed that as presently couched, the order creates an awkward and unfortunate result, such that even when account owners have got their BVN, they still will not be able to operate the accounts because doing so will be in violation of the order of the court.
He adjourned to December 11 for the hearing of all pending applications.