Embezzlement: Why Nigerian Banks May Run Into Trouble Soon

There may be trouble in the Nigerian banking sector shortly if indications by the Nigeria Financial Intelligence Unit (NFIU) are anything to go by.

The agency is piqued that banks and other critical institutions within the economy are not complying fully with its guidelines on the regulation of local government funds.

The guidelines are with regards to commencement of investigations into revenue allocations to local government areas across the states of the federation and the need for relevant stakeholders to abide by financial regulations as spelt out in the constitution.

Should there be breaches, the agency is likely to dump the blames on the doorsteps of commercial banks which had already been saddled with the responsibility of ensuring that the stipulated guidelines were followed.

The agency thus reinforced the June 1, 2019 deadline to all financial institutions, other relevant stakeholders, public servants and the entire citizenry to ensure full compliance with the provisions of the guidelines.

According to the agency, its action had become necessary in order to check abuses and embezzlement of funds meant for the local government development which are often seized or siphoned by state governors.

The unit, in a follow up statement issued by its Chief Media Analyst, Ahmed Dikko, and made available to journalists,  reiterated its warning that any contrary action to its circular to affected institutions will be sanctioned.

 “The Nigerian Financial Intelligence Unit (NFIU) is using this second press statement on the above subject to reiterate its position that the 1st June effective date of the guidelines to all financial institutions and public officials on the local government funds stands.

“The unit also maintains its understanding of the 1999 constitution that no debit is allowed on any local government  funds unless and until the funds are credited to and reach the bank accounts of a local government in any state of the federation.”

“The provision of the cumulative cash withdrawal not exceeding N500,000 per day is also firmly in place effective 1st June 2019.

“We observed isolated comments to the contrary in the past few days which in our assessment only amounted to wilful misinterpretation of the 1999 constitution and therefore of no consequences to the operations of the entire financial system.

“The provision of the guidelines to the financial institutions was also on account of legitimate powers provided by the NFIU Act 2018 and any violations of the said guidelines will be sanctioned appropriately.”

According to the agency, its action had become necessary in order to check abuses and embezzlement of funds meant for the local government development which are often seized or siphoned by state governors.

He said the move was also to avoid a possible isolation of the entire Nigerian financial system by other international financial systems “because of deficiencies in our anti-money laundering and counter terrorism financing implementation”.