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Court orders CBN, banks to freeze accounts without BVN

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The Federal High Court in Abuja has
ordered the Central Bank of Nigeria 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”.
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.
Justice Nnamdi Dimgba had made the
orders on October 17, 2017 upon an ex parte motion filed on behalf of
the Federal Republic of Nigeria and the Attorney General of the
Federation.
Named as defendants are Access Bank Plc,
Citi Bank Nigeria, Diamond Bank Plc, Ecobank Nigeria, Fidelity Bank of
Nigeria Plc, First Bank of Nigeria Plc, First City Monument Bank Plc,
Guaranty Trust Bank Plc and Heritage Bank Plc.
Other banks are Keystone Bank, Skye Bank
Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, United Bank for
Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc and the CBN.
A copy of the enrolled order, made
available to journalists on Saturday, showed that the ex parte motion,
marked FHC/ABJ/CS/911/2017, was moved on behalf of the applicants by A.
D. Tyoden.
The title of the ex parte application
indicated that the accounts without BVN allegedly had insufficient Know
Customer Guidelines, contrary to the directive of the CBN and Section 3
of the Money Laundering (Prohibition) Act, 2011 (as amended).
The title reads, ‘In the matter of an
application seeking an interim order directing all the money deposit
banks (commercial banks) to disclose/declare all individual and
corporate accounts in their custody not covered by Bank Verification
Numbers and for an interim order of forfeiture of the monies therein
being accounts with insufficient Know Customer Guidelines contrary to
the directive of the CBN and Section 3 of the Money Laundering
(Prohibition) Act, 2011 (as amended).’
Granting the ex parte motion, the court
ordered banks to file before the court separate affidavits deposed to by
their Chief Compliance Officers, disclosing the accounts of 
individuals, corporate bodies and government agencies in their custody
without BVN.
The court directed that the order be equally served on the Central Bank of Nigeria.
It furthered ordered the banks to
advertise the accounts without BVN in a widely circulated national
newspaper as notice to those who might have any interest in any of the
accounts.
The court also made an interim order
appointing a Bank Examiner from the CBN to examine the books of “any
bank that fails to comply with the order of the honourable court to file
affidavit of disclosure.”
Justice Dimgba adjourned until November
16 for the hearing of the substantive application seeking the forfeiture
of the proceeds of the accounts without BVN.
The court order read in part, “That an
order is hereby made freezing the said accounts by stopping all outward
payments, operations or transactions (including any bill of exchange) in
respect of the accounts pending the hearing and determination of the
substantive application.
“That an order is hereby made directing
the 1st to 19th defendant banks to disclose any investments made with
funds from these accounts without BVN in any products including
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.
“That an interim order is hereby made
directing the Central Bank of Nigeria 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 on the Central Bank and
NIBSS.
“That an interim order is hereby made
appointing a Bank Examiner from the Central Bank of Nigeria to examine
the books of any bank that fails to comply with the order of the
honourable court to file affidavit of disclosure.
“That 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 bank in a widely
circulated national newspaper 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 of same 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 of Nigeria.”
When contacted, the spokesman for the
Central Bank of Nigeria, Mr. Isaac Okorafor, however, said he was not
aware of the case and could therefore not speak on it.
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