2019: CBN warns banks over money laundering

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    Diamond Bank

    Ahead of the 2019 elections, which are expected to inject more funds into the Nigerian economy, any deposit money bank that violates the Money Laundering Act would be penalised, the Central Bank of Nigeria (CBN) has warned. CBN Governor, Mr. Godwin Emefiele, read the riot act to lenders yesterday at the Monetary Policy Committee (MPC) meeting in Abuja, where the anchor lending rate, the Monetary Policy Rate (MPR), was retained at 14 per cent for the umpteenth time. Specifically, he said the apex bank’s stance on 2019 elections was conveyed to bank’s chief executives at a recent meeting. The banking watchdog also left unchanged the Cash Reserves Ratio (CRR) at 22.5 per cent; liquidity at 30 per cent and Asymmetric corridor at +200 and -500 basis points around the MPR. “On 2019 elections, we have had meetings with the banks and we have told them to be wary of money laundering issue that may arise and we have advised them to be very careful on money laundering issues,” Emefiele said.

    “I believe they will be careful because they have been told that if they are caught laundering money, they will be heavily penalised.” On lending to politicians, he said, lenders have learnt their lessons and he believes that the right thing for everybody is to conduct their business carefully. “But we at the Central Bank, we are staying behind and watching to make sure that when things go wrong or about to go wrong we will deal with it appropriately,” he said. Emefiele said all of the 11 members of the monetary policy committee who met voted to hold the rate.

    Nigeria emerged from its first recession in 25 years in 2017 but continues to suffer from sluggish growth and high inflation. “A hold position is an expression of confidence in the policy regime, given the gradual improvement in both output growth and price stability,” Emefiele said.

    Economic growth dipped to 1.50 per cent in the second quarter, continuing a slowing trend that began in the first quarter. Emefiele said with the Nigerian economy on recovery path and given that the 2019 general election was a few weeks away, MPC members’ decisions were guided by the scenario to hold on to prevailing rates. He said that while economy was recovering, buoyed by stability in forex supply, security challenge arising from farmers and headers crisis, implementation of Economic Recovery and Growth Plan (ERGP) and full implementation of 2018 budget are key areas government must work on. On the MTN $8.1 billion capital repatriation saga, he said the banking watchdog was on the verge of an agreement with the telecom giant, declining to provide further details. Last August, CBN ordered MTN and its banks to bring $8.134 billion back into Nigeria, sending the company’s shares plummeting. The regulator alleged the firm had sent the funds abroad in breach of foreign exchange regulations.

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    The CBN governor said: “You must know that in issues like this, there are several things involved, such as whether the Certificate of Capital Importation (CCI) was issued in 24 hours and several others. “Of course, these issues were dealt with over the period, but the one that appears to have generated the kind of attention that we think it shouldn’t be generating is the issue of repatriation. But let me say something: That it is better for you to be slow in taking some of these decisions and when you take them, you know that they are potent and rational for those decisions.

    “We were rational for the decisions we took because there were certain documents we expected to be submitted, those documents have been submitted. We are in a process where we are saying this matter will be resolved. We have held meetings with the MTN Group from South Africa and we are at the verge of announcing the resolution.

    “I am very certain that we have reached the end of the road on this issue and I will continue to say that the sanctity of the CCI issued by our banks remains sacrosanct and no other company is being investigated on the issue of CCI.” Allaying the fears of other foreign investors in Nigeria, he noted that investors such as Nigerian Breweries, Guinness and lots of foreign investors have been carrying out their businesses for over 50 years “and they have conducted their businesses in a way that we instructed and that is why there have not been issues.”

    MTN’s latest troubles  with CBN came about two years after it agreed to pay over $1 billion to settle a dispute over SIM cards in Nigeria, whose finances have been hit by a weak economy and volatile global oil prices. Nigeria accounts for a third of MTN’s annual core profit, making it MTN’s biggest market.

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