Business
Fresh anxiety over the probe of banks chiefs
…as EFFC state resolve to persecute them
Palpable tension seems to envelope the banking sector at the weekend over the threat by the Economic and Financial Crimes Commission, EFCC, to put its search light on the chief executives of banks in its drive to rid the country of corruption in the public sector. This coming against the accusation that banks in the country have been identified as major facilitators and conduit pipe for the perpetration of corruption in government and it’s agencies.
The Executive Chairman, EFCC Mr. Olanipekun Olukoyede, stirred the honest nest at the weekend at the gathering of bankers when he gave indication of the resolve of the commission to begin prosecution of top officials of banks over alleged financial crimes and other infractions.
He stated that plans have reached advanced stage to prosecute top bank officials for financial crimes, urging stricter adherence to regulatory oversight. He made this known at the opening of the 17th Annual Banking and Finance Conference, with the theme, “Accelerating Economic Growth and Development: The State of Play and the Way Forward,” organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.
In his address at the gathering, he stated that, “So, in as much as we are ready to work with you to sanitise the system, we must also note that it is extremely important that when there is criminal infraction, penal sanctions be followed.
“I can tell you with every sense of humility that we will no longer fold our arms.
“Some of the major financial fraud that has been carried out that looked like an onslaught against the economy was done through the banking industry.”
He added, “And it’s so sad that we have also compiled our documents and have made the necessary investigations and we are prepared to start it.
“Now, very soon you will see some banks being prosecuted, some top officials being prosecuted.
“We need to just do something drastic to bring everybody in line and to make us do the right thing.
“It’s extremely important. In the system where there are no penal sanctions for criminal infractions, that system will never survive.”
Olukayode called on the CIBN to tighten regulatory oversight of its members to abide by the codes of professionalism as a means of supporting government’s efforts to stimulate the economy.
The EFCC chairman hinted that going by the commission’s experience in the investigation of crimes involving bankers, the commission can authoritatively establish a case of gross contempt for regulation that borders on impunity.
According to him, operators often came up with means to circumvent regulations and rules in a desperate bid for higher yields.
He averred that added, “Sharp practices such as forex round-tripping, defrauding of depositors through phantom charges and complicity in money laundering and illicit financial flows schemes involving politically exposed persons continue to undermine the integrity of the sector and by extension the nation’s economy.
“I hope that you will all look at yourselves in the mirror and leave this place with a renewed commitment to professionalism and determination to provide services that will assist the nation’s economy.”
He said economic recovery policies, however, well thought out, would not achieve the desired outcome without a buy-in by operators in the financial services sector, adding that where such operators prioritize profit over national growth and wellbeing, progress would remain elusive.
Olukoyede said the banking and finance sector was a crucial artery of the Nigerian economy, adding that its efficiency or otherwise has implications for the economy.
He said, “I am gratified that this event is coming at a time when Nigerians are clamouring for solutions to the nation’s economic woes.
“Nigeria needs your skills, competencies and expertise to navigate this difficult phase in her journey to economic growth and prosperity.
“The stability of our economy, currency and current inflationary pressures are sources of concern to all of us and the challenging situation calls for serious introspection to devise new solutions to help the nation’s economic recovery process.”
Nonetheless, he said the EFCC remained committed to working with the institute in sanitising the financial services sector through robust enforcement of the anti-money laws and insulating it from attacks by cybercriminals both from within and without.
Earlier in March the EFCC boss challenged audit firms to be more assertive in unraveling frauds in banks. He gave the charge in Abuja on Monday, March 4, 2024 at the 2024 Annual retreat of the Association of Chief Audit Executives of Banks in Nigeria, ACAEBI. Olukayode condemned the raft of fraudulent activities associated with the local banking industry, urging bank auditors to do more in sanitizing and strengthening the financial sector and growing the economy.
He spoke through The Commission’s Director; Internal Audit, Idowu Oluwole-Apejoye, noting that banking fraud across the country would often has either inside or outside enablers.
“Broadly speaking, banking fraud in Nigeria is both inside and outside-related. The insider-related fraud comprises outright stealing of customers’ deposits’ authorized loan facilities, forgery and several other kinds of unhealthy and criminal practices. The outsider-related ones include hacking, Automated Teller Machine, ATM, fraud, conspiracy among others. And the absurd one is when there is collaboration between the both of them,” he said.
He said that an estimated 70 per cent of financial crimes in Nigeria is traceable to the banking sector and called for concerted efforts by relevant authorities and professionals, especially, bank auditors to prevent and detect fraudulent practices in the industry.
He called for a fusion of preventive and detective measures for effective outcomes and cost management of bank frauds, noting that bank auditors were crucial in the fight against economic and financial crimes “as gatekeepers on responsible financial conduct, adherence to regulations, and effective functioning of the financial services industry”.
Olukoyede sought for more collaboration from bank auditors with the EFCC. “As you retreat, use this opportunity to review developments in the financial sector of our nation and offer sound recommendations to the EFCC on how the rising cases of financial crimes can be curbed in our banks. I also call on you to always approach the Commission on any issue that you consider germane in addressing corruption not only in the financial sector but in all other areas of life in our dear country,” he said
Earlier in March, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, revealed that security agencies including the Economic and Financial Crimes Commission were investigating questionable foreign exchange allocations and forward contracts previously estimated at $2.4bn.
The development followed the conclusion of the audit of $7bn dollar debts inherited by the Cardoso-led CBN from the previous administration of the apex bank.
The new administration of the apex bank had engaged a global firm, Deloitte, to carry out an audit of the $7bn debts. Cardoso had earlier said about $2.4bn FX allocations from the $7bn backlogs were invalid.
Elaborating further on the issue while speaking with journalists shortly after the 294th meeting of the Monetary Policy Committee in Abuja , the CBN governor disclosed that security agencies were investigating the FX transactions that had been declared invalid by the audit report.
The apex bank, according to him, was providing the necessary documents to help the investigation.
Cardoso said law enforcement authorities, including EFCC were focused on unraveling issues around foreign exchange transactions that did not meet the standards of the regulatory agency
He stressed that the report of Deloitte consultants revealed that the majority of the transactions did not meet the criteria for payment.
Speaking on the resolve of the EFCC boss to try bank chiefs, Dr. Olufemi Omoyele of the department of Entrepreneurship, Osun State University said ‘’It’s a welcome development given that a lot of financial crimes that have impacted negatively on the economy has been in one way or the other aided by the banks. There is a need to beam a searchlight on bank, the EFCC by now must have investigated them thoroughly and their finding should translate into trial if they have sufficient evidence.”
Project director, Accountability and Transparency Network, Biola Adewumi told Business Hallmark that the earlier these banks chiefs are put on trial the better. “I can tell you that they have played a significant role in dragging the economy to the sorry state we have found it now. Nigerians are not happy with some of these bank chiefs, they aided and abetted serious financial crimes of politicians, and they themselves have severally sabotaged the economy through their activities.’’
