CBN bars nine banks from forex market for allegedly concealing NNPC’s $2bn

The Central Bank of Nigeria (CBN) has banned nine deposit money banks (DMBs) from the foreign exchange market for allegedly hiding over $2 billion said to belong to the Nigerian National Petroleum Corporation (NNPC).

President Muhammadu Buhari last year began the implementation of Treasury Single Account (TSA) that mandated public funds remitted to CBN.

Our source said that First Bank of Nigeria, Heritage Bank Plc, Keystone, Sterling Bank Plc, United Bank for Africa, Skye Bank and Fidelity Bank Plc First City Monument Bank and Diamond Bank Plc were involved in the matter.

Sources had revealed that the funds were collected by the banks as revenue for NPA, but failed to move it into NPA’s TSA with the CBN and were earning interests.

About $24.1million (N7.47billion at N310 per dollar) was allegedly traced to Heritage Bank, the successor bank to the defunct Societe Generale Bank while another €6 million (N2.09billion at N348 to a dollar) was allegedly concealed in two banks – First Bank of Nigeria and FCMB.

All efforts to get the response of the affected banks did not produce much result. Only FCMB and Fidelity Banks responded to our enquiries .

FCMB says: “We are working with the Central Bank of Nigeria on an amicable resolution. This is really a function of dire macroeconomic situation and illiquidity in the forex markets, rather than concealment or wilful non-compliance by banks”.

This is how Fidelity Bank responded: “NLNG was paying dividends from the investment of the government in the company (NLNG) to the NNPC. These dividends had accumulated to about $5bn. NNPC was investing this dividend payment in a dedicated account as fixed deposits with commercial banks.

“When the government raised the issue that the dividends should have been paid into the Federation account, the CBN Governor invited the CEOs of all the banks that had the funds to Abuja for a meeting on the following:

“A reconciliation of the amount in each bank with the records of CBN/NNPC;

“Agree a repayment time-table of the funds with the banks.

“As at the time the TSA implementation commenced in September 2015, some of the banks had paid back over 50% of the funds based on the repayment timetable.

“This repayment by the banks was the bailout of $2.1bn (N414bn) that was shared by the FGN and state governments in July/August 2015.

“When the TSA commenced, the banks reported these funds as part of government deposits they had but it was not remitted like other TSA funds because of the remittance timetable that had been agreed with the CBN. The NNPC invited banks earlier this year to submit a revised repayment plan for the balance of the funds.

“From the above you can see that the CBN and NNPC had a clear picture of the status of these funds with the banks”. The bank explained.

It would be recalled that the management of First Bank of Nigeria, a subsidiary of First Bank of Nigeria Holdings Plc and First City Monument Bank (FCMB) had to debunk earlier allegation that they were involved in the concealment of N11.23 billion alleged to belong to the Nigerian Ports Authority (NPA).

The authority of NPA was said to have uncovered fraud totalling N11.23 billion in three deposit money banks that included First Bank of Nigeria Limited, Heritage Bank and FCMB.

First Bank of Nigeria in a statement said, “In view of the media story making the rounds on the NPA funds allegedly concealed in the Bank, the Management wishes to clarify that following the Federal Government of Nigeria’s directive on the implementation of the Treasury Single Account (TSA) and the subsequent Central Bank of Nigeria’s (CBN) directive to the Deposit Money Banks (DMBs) to transfer all MDAs accounts to the TSA with the CBN, FirstBank has since complied and transferred all MDAs funds including that of the NPA to the designated TSA account.

“For avoidance of doubt and for the information of the general public, we do not have such funds in any of our accounts or deposit portfolio, the statement then explained.

The management of FCMB explained that the bank was not involved in any case of concealment or fraudulent treatment of funds belonging to the NPA.

The bank in a statement obtained by our correspondent said, “FCMB regularly receives Naira and US Dollar payments on behalf of NPA which are remitted to the NPA’s Treasury Single Account (TSA) accounts with Central Bank of Nigeria (CBN). On one occasion, FCMB received Euro payments for NPA.

“FCMB has made requests from NPA for a Euro account to which to transfer the Euro proceeds, as the bank was only in possession of Naira and US Dollar TSA account details for NPA.

“We have also informed NPA that upon receipt of the correct account details, the transfer will be made. This remains our position as we wait the account details. It is important to reiterate that the said balance has not at any time been concealed from either the NPA management, or the CBN. The bank has not been informed of any investigation relating to these funds or its conduct regarding same,” the statement added.