Leaked Memo: CBN Instructs Banks To Block Bank Account Of 38 Companies For Forex Abuse. CBN is the short for Central Bank of Nigeria. According to Wikipedia it is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on in 1959.
However, the main regulatory objectives of the bank as stated in the CBN Act is to maintain the external reserve of the country, promote monetary stability and a sound financial environment. They also act as a banker of last resort and financial adviser to the federal government. A memo leaked, which says that CBN Instructs Banks to block 38 companies’ bank account for forex abuse.
Leaked Memo: CBN Instructs Banks To Block Bank Account Of 38 Companies For Forex Abuse
According to Naira Metrics Naira Metrics the CBN did not state reason why the accounts were flagged but sources inform Nairametrics that it was due to suspicious of forex infractions. A memo circulating online indicates that the central bank has instructed banks to Post-No-Debit on account of 38 companies.
The PND (Post-No-Debit) is an instruction to banks not to let any withdrawals or transfers from the bank account of accounts owners, essentially blocking the account from outflows. However, it is a drastic measure taken to allow for investigation and possible to reclaim any illegal inflow into the account.
CBN Instructions And Companies Involved
CBN said “ you are hereby required to place the under listed accounts on Post-No-Debit with immediate effect and revert with the account names, numbers, currencies and balances of account added on PND.”
The account of Premier Lotto Ltd a popular lotto company and the owners of “ Baba Ijebu” lotto platform. Several Burea De Change operators, oil and gas firms are also among.
On the 26th August, the CBN announced it will go tough on exporters who are guilty of forex non-repatriation. It directs banks to submit the names, addresses, and Bank Verification Number of all the exporters who have failed to repatriate their export proceeds. And necessary action would be taken against such defaulters.
Earlier, the CBN offered a circular removing buying agents/companies or any third parties from accessing it’s SMIS forex window through FORM M forex purchases.
The Apex banks gave an instruction that “ Authorized Dealers are hereby directed to desist from the opening of Form M whose payment is routed through a buying company/agent or any other third parties” that is, effectively eliminating third parties or middlemen from transacting in forex deals in its official SMIS window.
An article from TheCable suggest that some of the Lotto companies on the list transferred $420 million abroad “under the guise of purchasing software” but the funds were later traced to the bank accounts of some of it’s directors.
A source told TheCable that “the forex was sourced from the black market, which puts more pressure on the exchange rate. The gaming companies are awash with naira which sit in their bank accounts, so they sort for a way to move the funds abroad”.