By Patrick ONOJA investadvocate

Feb 01 2011 09.51 GMT

Lagos (INVESTADVOCATE)- Unconfirmed sources has it that the reason for the Central Bank of Nigeria’s (CBN’s) directives that Account holders should update their accounts with Banks is to indict Banks that seized funds of dead Accountholders and used same to transact businesses.

 

The Source (name withheld) told investadvocate that the reason is to know the number of dead accountholders whom Banks are using their deposits to transact businesses.

 

“Some of the customers having huge funds as deposits with these Banks may have died and their relatives may not be aware of such funds” the Source said.

 

Our source affirmed that Nigerian Banks are sitting on billions of Naira of dead customers without the relatives of these dead customers knowing it.

 

However, Kingsley Moghalu, Deputy Governor, Financial System Stability of Nigeria’s Central Bank was reported as saying that the reason for the directive was as a result of the ongoing reforms to sanitise the Nation’s Banking Industry.

 

Moghalu further affirmed that Deposit Money banks (DMBs) had prior to this time, faced  challenges in trying to obtain the necessary information from Depositors as required by the CBN due to two reasons.

 

The first of the two reasons, he said, was that information already obtained over the years may be out of date or inaccurate.

 

Another reason he gave was that the Bank’s customers may have been reluctant in giving required information; thinking that they may not be relevant.

 

Also, Mohammed Abdulahi Head, Corporate Affairs of Nigeria’ Apex Bank had said in a Statement December 2010, that the account update is part of the Customer Due Diligence, which involves Know Your Customer compliance; accepted worldwide as a tool for the fight against money laundering and terrorism financing as well as protecting the interest of customers. All banks are required to ensure compliance.

 

However as at the time of filling in this Report, investadvocate was unable to get in touch with Abdulahi for the CBN’s side of the story.

 

On Monday January 31 2011; which was the end of the extended deadline, investadvocate visited Amuwo Odofin Branch of Union Bank of Nigeria Plc (UBN), a lot of the Banks customers were seen in a crowded Banking Hall filling the Customer Record Update Forms.

 

As earlier reported, Nigeria’s Apex Bank on November 29 2010 had issued a one month directive that  customers of DMBs update their bank records or risk being stopped from operating such accounts.

 

The initial deadline was December 31 2010, but CBN having reviewed the exercise CBN directed that it should be extended till January 31 2011.