The Central Bank of Nigeria, CBN, has warned Nigerian banks to be wary of currency traffickers who may wish to use Nigeria as conduit for moving foreign exchange around in the global financial system.
The Bank said the warning became necessary to let bank users know the several protocols on illicit fund flows now being used for money laundering, and terrorism financing both in Nigeria and around the world.
The Global Financial Integrity, GFI, the international financial monitoring and assessment group, in a recent report ranked Nigeria as one of the 10 largest countries for illicit financial flows in the world.
The CBN said although it was yet to independently confirm details of the report that an estimated $15.7 billion of illicit funds go through the Nigerian banking system annually, it was important to warn Nigerians to avoid being used as a conduit for these illegal flows.
Describing the GFI’s report as “avoidable negative commentary on the Nigerian banking system”, the Central Bank said it was stepping up its vigilance to ensure that Nigerian banks were not being used as conduits to facilitate illegal foreign currencies movements.
“We note and applaud that in line with global best practice, Nigerian banks have started to curtail the acceptance of foreign currency cash deposits, much the same way as customers in other countries cannot just walk into banks and make foreign currency cash deposits without proper documentation,” the bank said.
Most commercial banks during the week rejected huge foreign exchange cash deposits by customers above the CBN stipulated limit without proper documentation.
Recently, the CBN issued fresh regulations that approves not more than $5,000 foreign exchange to be sourced from the Bureaux de Change (BDC) for school fees, medical services, others, as a way of checking incessant abuse of the FOREX market.
The CBN’s Director, Corporate Communication Department, Ibrahim Mu’azu, however, assured Nigerian bank customers that all persons seeking foreign currencies for legitimate personal and/or business interests would continue to receive adequate attention within the provisions of the law.
“The CBN’s Foreign Exchange Rules have many windows for accessing foreign exchange for legitimate business as well as for personal commitments, including payment of medical bills, school fees, mortgages, demand notes and other bills,” Mr. Mu’azu said.
He said Bureaux de Change (BDC) services to small-scale users equally remain valid as long as they were used to meet genuine needs, pointing out that fresh BDCs’ documentations to the CBN include the customer’s Bank Verification Number (BVN).
The CBN, the director said, would continue to support the Federal Government’s fight against money laundering, corruption, and terrorism financing, adding that it would block any and every avenue that may be used for these illegal purposes.
He restated the bank’s determination to ensure that all persons venturing into currency speculation and currency substitution would continue to find the business unattractive and dangerous.
“In these efforts, therefore, we seek the continued cooperation of all Nigerians to make this work for the enhancement of our shared progress, rather than the prosperity of a greedy few amongst us,” the CBN said.