Unless the court order ordering the forfeiture to the Federal Government of funds in bank accounts that do not have Bank Verification Number (BVN) or incomplete KYC is upturned, over five million Nigerians both at home and abroad stand the risk of losing more than N200 billion, an investigation by Saturday Telegraph has revealed.
Following an application by the Attorney- General of the Federation, Mr. Abubakar Malami (SAN) on behalf of the Federal Government, the Federal High Court, Abuja, presided over by Justice Nnamdi Dimgba Igwe had on October 17, 2017 granted an ex parte order that all funds in bank accounts owned by corporate organisations, government agencies or individuals that are without BVNs would be forfeited to the government in 14 days from the date the order was given should the owners of the accounts fail to show cause why their monies should not be forfeited. Although banks have been scrambling to contact their customers that are yet to do the BVN registration since the beginning of the week, our correspondent gathered that most of such customers would be unable to complete the registration before the expiration of the 14 day deadline set by the court.
Indeed, data released by the Nigeria Interbank Settlement System (NIBSS) shows that of the total number of 97.57 million bank accounts in the country, including corporate and individual savings, current and other forms of accounts, only 51.7 million bank accounts had been linked with BVNs.
This indicates that 45.87 million bank accounts did not have BVNs as at June 18, 2017. Banking sources disclosed that while some of these accounts belong to customers who did not want to complete the BVN registration in order to attract the attention of the Economic and Financial Crimes Commission (EFCC), most were owned by dead customers and those that opened such accounts under different names and have been unable to provide the valid means of identification that prove they are the bona fide owner of the account.
The Head of Operations at a mid-sized lender, who did not want to be named, revealed that many banks have accounts with monies running into millions of naira that belong to dead customers, who died without a will, and whose next of kin could not access such funds due to the ordeal they go through in obtaining Letters of Administration.
The bank official said: “There are many customers who died without leaving a will and their relatives and next of kin have been battling for years to obtain the Letter of Administration, the key document that is required to enable them to access the funds in the deceased customers’ accounts.
So what is going to happen to these monies? Are we going to hand them over to the government?” Revealing that the total funds in these accounts in the banking industry could be over a N100billion, the bank official said lenders were concerned that compliance with the court order could result in law suits being instituted against lenders by the deceased customers’ next of kin.
Similarly, findings show that with a large number of Nigerians in the diaspora yet to do their BVN registration, the court order could lead to them forfeiting over $200million (N72billion) to the government. Several Nigerians in the diaspora who expressed concern about the court order in Facebook posts and in telephone chats with friends and associates in Nigeria, disclosed that they were yet to do the BVN registration mainly due to the fact that their places of residence are very far from the cities where the Central Bank of Nigeria (CBN) set up BVN registration centres for Nigerians outside the country.
One of such customers residing in the United States, who identified himself simply as Ken, said it would cost him about $1,000 to make the trip to the nearest city that has a BVN registration centre, adding for now, he could not afford such an amount.
Another Nigerian resident in the US revealed in a facebook post that at least 5,000 Nigerians like him were yet to do their BVN registration. He disclosed that about $200million could be at risk if the government goes ahead to enforce the court order. Last week, Senior Special Assistant to the President on Foreign Affairs and Diaspora, Mrs Abike Dabiri-Erewa, appealed to the CBN and the Attorney-General of the Federation, to give Nigerians in the Diaspora more time, and also put modalities and logistics in place to enable them to obtain their BVN to avoid forfeiture of funds in their bank accounts.
In a statement issued by her Special Assistant, Media, Abdur-Rahman Balogun, Mrs. Abike Dabiri-Erewa, said: “I hereby appeal to the CBN to look into the challenges Nigerians living abroad face in getting their BVN done and extend the deadline for them to get the BVN done.
The Attorney-General of the Federation should intervene in this matter to assist Nigerians living abroad who at a disadvantage by allowing them more time to comply with the BVN directive.” Estimates of the size of the Nigerian Diaspora vary greatly and range from about 5 million to 15 million people. In fact while they can be found in practically every part of the world, the largest populations of Nigerians can be found in the UK, USA and South Africa.
The CBN had earlier extended the deadline for BVN registration for Nigerians in the Diaspora from June 30 2016 to December 31, 2016. In a circular to all banks, CBN Director, Banking and Payments System Department, Dipo Fatokun, said the extension followed observations by the regulator showing a low percentage of registration of Nigeria banks’ customers in the Diaspora. He attributed the extension to lack of accessibility to registration centres and unavailability of registration centres in some foreign cities where the Nigerian population is high.
Also, as part of efforts to ensure the BVN registration of more Nigerian bank customers in the Diaspora before the expiration of the new deadline, the CBN appointed Avante International Technology Inc., to join OIS and VFS, two firms that it had earlier contracted to handle the exercise.
Attempts by Saturday Telegraph to contact the CBN, Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, were not successful. However, a source at the Apex Bank said it would not stop the banks if they choose to challenge the court order. A Port Harcourt-based legal practitioner, Mr. Patrick Okonji, said the court order was “highly necessary” as the banks had already stopped funds outflows from accounts without BVNs. “I’m really disappointed that the Judge could make such an order.
The banks had already said that while funds could be deposited in accounts without BVN, they cannot be withdrawn unless the account owner enrols on the BVN platform. So the government wants to take this money that belongs to people? It is not fair,” he stated.