Banking
BVN: Banks May Beg Court to Stop FG
By Modupe Gbadeyanka
Deposit Money Banks (DMBs) operating in Nigeria may have to run to court to challenge an order granted by a court in Abuja to the Federal Government to takeover all funds in accounts without Bank Verification Number (BVN).
According to BusinessDay, this decision follows outcome of the meeting with legal advisers of banks on Tuesday and that of banks chief executives on Monday at the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
A source familiar with the outcome of the meeting says that while the banks do not want to be confrontational about this, the issue is beyond corruption as being touted by the FG.
Recall that Justice Abubakar Malami, Attorney-General of the Federation and Minister of on October 17 obtained an order from Federal High Court judge, Justice Nnamdi Dimgba, seeking to confiscate all funds in accounts without BVN to the Federal Government.
The order was obtained against 19 banks in the country with the Central Bank of Nigeria also included as a defendant in the case. The banks have been given an ultimatum of 14 days to advertise accounts without BVN in a national newspaper, during which time, the owners of such accounts are expected to show cause why the money should not be forfeited.
Stakeholders argue that there are many reasons for not having a BVN which include cases of death of an account holder where the probate process is still ongoing or many Nigerians that are outside the country.
They see no legal basis for such sweeping order, saying that if FG wants to enforce such an order, it should have been done by an Act of the National Assembly.
Johnson Chukwu, managing director/CEO, Cowry Asset Management limited told BusinessDay by phone that banks have strong basis to contest the order particularly on the aspect that FG gave a timeline for banks to advertise accounts without BVN in a national newspaper, during which time, the owners of such accounts are expected to show cause why the money should not be forfeited.
Chukwu said there is no provision of such in the Money Laundry Act, adding that the Act does not allow forfeiture of funds for reasons of not having a complete documentation.
He said if the banks are willing to challenge the order, it is good but was concerned that those who may lose their funds may be unable to challenge the order directly because they don’t have the capacity to do so or for other reasons.
The banks CEOs agreed to reach the Attorney General of the federation as well as others in the executive to explain to them the far reaching implications of the order, especially since it also affects foreign investors with funds in Nigeria.
“The economy may shrink again if the federal government goes ahead to seize the funds in the non – BVN linked accounts as the magnitude of the numbers involved is huge .The extent of shrinkage will depend on the volume and whether these accounts were active or dormant in spite of the regulation,” Bolade Agbola, Analyst and CEO of LAM Agro Consult Limited said in an emailed response to BusinessDay.
Ayodeji Ebo, managing director, Afrinvest Securities limited told BusinessDay by phone that the banks should engage with the Federal Government on the issue.
However, Ebo said it may be good for banks to get an injunction to halt the order and engage until agreement is reached.
Data obtained by BusinessDay from Nigeria Inter-Bank Settlement System Limited (NIBSS) shows that a total of 46 million bank accounts are yet to be linked to BVN as at February 2017, the latest period for which data is available.
Total bank accounts in the banking system were 97.57 million as at February 2017 while total accounts linked with BVN stood at 51.72 million, leaving a total of 46 million accounts yet to be linked with BVN, introduced in February 2014 to ensure that all bank accounts have the biometric identification of their owners.
“Expropriating people’s money can give the wrong impression especially for an emerging market like Nigeria,” said the banking source.
“The Government can choose to restrict access to non BVN accounts if it is concerned about money laundering but not seize funds in said accounts, to avoid hurting innocent people.”
Source: BusinessDay
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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