The Nigerian Financial Intelligence Unit, NFIU, yesterday, threatened to sanction financial institutions in the country, following their non-compliance with certain anti-money laundering provisions.

Speaking at a regional training for financial and regulatory institutions on the revised Financial Action Task Force recommendations, organised by the the Inter-Governmental Action Group against Money Laundering in West Africa, GIABA, Ms. Juliet Ibekaku, Director, NFIU and GIABA National Correspondent of Nigeria, said it has received a number of reports from financial institutions in the country, and that the reports are not impressive.

According to Ibekaku, who was represented by Mr. Daniel Iseye of the Financial Institution Training Centre, FITC, this calls for urgent improvement as the NFIU will not hesitate to recommend sanctions within the provisions of extant laws.

He noted that meting appropriate sanctions to defaulting institutions is the only way to ensure deterrence and to protect Nigeria’s financial system.

She emphasised the need for Nigeria’s financial system to be safeguarded from criminals, so as to attract the much needed foreign direct investments that will help grow the economy.

She said, “All hands must be on deck to ensure that the Anti-Money Laundering and Combating the Financing of Terrorism, AML/CFT, programme in Nigeria is evaluated favourably both in terms of policy frameworks and effectiveness – given that effectiveness is now a cardinal principle in FATF mutual evaluation process.

“The Nigerian Financial Intelligence Unit will continue to render full support for initiatives and programmes designed to enhance best practices and increase capacity in the area of AML/CFT in Nigeria.”

Also speaking, Mr. Shehu Abdullahi, Director General, GIABA, represented by Mr. Buno Nduka, Director, Programmes and Projects, disclosed that financial institutions in Nigeria and other West African nations are performing poorly with regards to compliance to AML/CFT standards, adding that this is adversely affecting efforts to tackle money laundering and financing of terrorism activities in the region.

Source: Vanguard 9by Michael Eboh)

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A total of N11.089 trillion was invested in treasury bills by financial institutions and investors in 2012, data compiled by THISDAY have shown.

It showed that while a total of N4.393 trillion was invested in the short-term instrument through the Central Bank of Nigeria’s (CBN) Open Market Operations (OMO), treasury bills purchased via the Primary Market Auction (PMA) last year was a total of N6.695 trillion.

The research revealed that banks and other investors were willing to invest more in all the auctions as the treasury bills were over-subscribed.

OMO is a monetary policy instrument used to buy or sell securities in the open market. The CBN uses it to control the volume of money supply in the economy. As a result of its restrictive monetary policy, the apex bank intensified its mop up of excess liquidity in the system by sale of treasury bills with OMO.

On the other hand, the banking sector watchdog sells treasury bills at the PMA to fund fiscal deficit and shortfalls in federal government’s revenue.

A breakdown of the data gathered from the Financial Market Dealers Association (FMDA) showed that at the OMO, while a total of N2.560 trillion was subscribed in the first quarter, the amount sold stood at N999.977 billion. Similarly, just as the amount of subscription recorded in the second quarter of the year was N1.906 trillion, the apex bank only sold N679.648 billion.

In the same vein, in the third quarter of 2012, while the banks and other investors were willing to invest a total of N551.979 billion, only a total of N330.216 billion was allotted to them. Also, in the last quarter of 2012, the amount of treasury bills sold at the OMO was N2.383 trillion.

Data for the PMA which is held twice monthly also showed that for the 91-day tenor, a total of N861.241 billion was sold; the regulator also sold a total of N1.279 trillion for 182-day bills. Similarly, the at the 364-day bills also recorded a total of N1.207 trillion.

Analysts attributed the rising appetite for Nigerian treasury bills to the high yield observed last year.

A senior analyst at BGL Securities Limited, Mr. Femi Ademola, also identified the stable exchange rate as a factor that influenced the demand for treasury bills and other fixed income securities.

He added: “The yield is attractive and the exchange rate is stable. That is very key for any investor, especially the foreign investors. Treasury bills are very attractive to the banks because the CBN is using OMO to compel to buy. When you use OMO, banks are under compulsion to buy.

“Also, treasury bills are attractive to banks now that they have to mark-to-market their investments as a result of the International Financial Reporting Standards (IFRS).”

Managing Director/Chief Executive Officer (MD/CEO), Partnership Investment Company Plc, Mr. Victor Ogiemwonyi had said that banks’ rising investment was not aligned with the economic growth prospects of the economy.

According to him, “banks are service institutions, and as such, they should aim to help build their customers businesses so they will have businesses to service. Recent developments in our banks seem to consist only of collecting deposits mainly from government institutions and buying government treasury bills with them to earn large margins.

“This seems to be their only goal. Creating credit that builds businesses is no longer a part of banking business for many of our banks today. Where they give credit at all, they price it so badly that the loan is destined not to perform.”

Ogiemwonyi described this investment strategy as “unsustainable,” stressing that it was unsupportive of growth.

“Banks should aim to be of service at the most cost effective to the users of their services. The current model where their only goal seems to be, to make the most profits as much as possible even when it means squeezing the customer in the most Machiavellian way, will not be in their interest.

Source: Thisday (written by Obinna Chima)

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The Central Bank of Nigeria has issued fresh directives to banks to comply with the amended anti-money laundering/combating the financing of terrorism regulation, 2009 so as to align with money laundering Act, 2011 and terrorism Act, 2011.

A circular by the CBN on Friday listed the sections of the AML /CFT that were amended as Section 1.15.2, Section 1.18.3 and Section 1.18.1.2.

It said, “Financial institutions are required to investigate suspicious transactions and report their findings to the Nigerian Financial Intelligence Unit in the Economic and Financial Crimes Commission within seven days of the transaction, in compliance with section 6 (2) (c) of MLPA, 2011.

“Financial institutions are required to report in writing any single transaction, lodgment or transfer of funds in excess of N5,000,000 and N10,000,000 or their equivalent made by an individual and body corporate respectively to the NFIU in accordance with section 10 (1) of the MLPA, 2011.”

It added that in compliance with section 2(1) of the MLPA, 2011 financial institutions are also required to render reports on transfers to or from a foreign country of funds or securities by a person or body corporate, including a money service business of a sum exceeding $10,000 or its equivalent to CBN, Securities and Exchange Commission and EFCC in writing within seven days from the date of the transaction.

It added, “Furthermore, in compliance with section 14 of the Terrorism (Prevention) Act, 2011, financial institutions are required to, within a period of not more than 72 hours, forward the following reports of suspicious transactions relating to the NFIU- fund derived from illegal or legal sources but are intended to be used for any act of terrorism ; proceeds of a crime related to terrorism financing ; proceeds belonging to a person, entity or organisation as terrorist.”

It noted that financial institutions are not statutorily liable for violation of confidentiality rules for every lawful action taken in furtherance of their obligations under the CBN AML/CFT Regulation, 2009, as amended.

The circular also said that the details of a report sent by any institution would not be disclosed by the institution or any of its officers to any other person.

Source: Punch ( written by Ademola Alawiye)

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