CBN Wants Retention Of Powers To Freeze Bank Accounts Linked To Suspected Criminals

The Central Bank of Nigeria (CBN), is seeking for statutory powers from the Nigerian Senate that will enable it freeze bank accounts that are linked to criminal suspects.

CBN’s director in charge of legal services, Kofo Salam-Alade made the demand on wednesday while appearing before a Senate Committee Hearing for a new Act seeking to replace the Banks and Other Financial Institutions Act (BOFIA) of 2004.

The lawmakers have commenced the process of repealing/replacing BOFIA 2004 with the re-enactment of BOFIA 2020. However, a particular omission in the new bill is making CBN worried it might render its fight against financial crimes.

Salam-Alade in his presentation to the lawmakers pointed out that the new BOFIA bill has ‘inadvertently’ omitted a clause that should normally grant the CBN Governor the power to freeze any bank accounts linked to criminals, using of a court order. The BOFIA 2004 contained this clause.

However, the new bill seeking to re-enact BOFIA does not have it. Interestingly, this new bill has passed its second reading at the senate, a development that is giving CBN real cause for worries.

Speaking further, Mr Salam-Alade argued that the clause should be re-introduced into the new BOFIA bill in order not to frustrate the apex bank’s fight against fraud and other financial crimes.

“This omission erodes the powers of the CBN and creates a huge gap in the regulatory and resolution framework. Therefore, we propose that the extant provisions should be reinstated,” Mr Salam-Alada noted.

According to Nairametrics, an online platform,the CBN director later called on the lawmakers to consider the creation of a credit tribunal that will have the responsibility of addressing the persistent issue of non-performing loans in the banking sector. Such a tribunal is expected to fast-track the recovery of bank loans and other financial institutions through the enforcement of rights over collaterals. Salam-Alade said:

“As part of measures to address the role of nonperforming loans, we propose the creation of a credit tribunal. The overarching objective is to create an efficient regime for the recovery of eligible loans of banks and other financial institutions and enforcement of rights over collateral securities.