CBN Sanctions 9 Banks For Hiding NNPC's $2.274b

                                
Nine deposit money banks (DMBs) are in trouble for hiding over $2.274 billion belonging to the Nigerian National Petroleum Corporation (NNPC) from the Treasury Single Account (TSA)
The Central Bank of Nigeria (CBN) has banned the banks from the foreign exchange market.

The banks, whose suspension would remain in force until they remit all the funds to the TSA, are United Bank for Africa (UBA) $530m; First Bank of Nigeria (FBN) $469m; Diamond Bank Plc ($287m); Sterling Bank Plc ($269m); Sky Bank Plc ($221m); Fidelity Bank ($209m); Keystone Bank ($139); First City Monument Bank (FCMB) $125m; and Heritage Bank ($85m).
President Muhammadu Buhari has been briefed on the breach by the banks. They have been mandated to move the monies to the TSA before any consideration for their re-entry into forex trading.

Some of the banks declined to comment but here is what others have to say:

UBA said: “Our attention has been drawn to report of the ban of UBA from the foreign exchange market by the CBN over the non-remittance of NNPC/NLNG dollar deposit

“We wish to state very categorically that UBA has completely remitted all NNPC/NLNG dollar deposits

“We thank all our numerous customers, business partners and other stakeholders who have reached out to us on account of this report.”

But some sources, who asked that their identities be veiled, said the issue was being resolved. They said the matter was not an infraction in the sense of the word, adding that if it were so, the apex bank would have since debited their accounts at source.
An official of Fidelity Bank said: “NLNG was paying dividends from the investment of the goverment in the company  to the NNPC.

“These dividends had accumulated to about $5billion.NNPC was investing this dividend payment in a dedicated account as fixed deposits with commercial banks.

“When the goverment raised the issue that the dividends should have been paid into the Federation Account, the CBN Governor invited the CEOs of all the banks that had the funds to Abuja for a meeting on the following:

• a reconciliation of the amount in each bank with the records of CBN/NNPC; and
• agreed a repayment time table of the funds with the banks;

“As at the time the TSA Implementation commenced in September 2015 some of the banks had paid back over 50 per cent of the funds based on the repayment timetable;

“This repayment by the banks was the bailout of $2.1bn (N414billion) that was shared by the FGN and state governments in July/August 2015

“When the TSA commenced, the banks reported these funds as part of goverment deposits they had, but it was not remitted like other TSA funds because of the remittance timetable that had been agreed with the CBN.

“The NNPC invited banks earlier this year to submit a revised repayment plan for the balance of the funds

“From the above you can see that the CBN and NNPC had a clear picture of the status of these funds with the banks”, the official stated.

An official of FCMB who spoke on condition of anonymity, said: We are working with the Central Bank of Nigeria on an amicable resolution. This is really a function of the dire macroeconomic situation and liquidity in the FX markets, rather than concealment, or wilful non-compliance by banks.”

A Diamond Bank source said bank never concealed any funds. The official, who asked not to be named, said Diamond Bank had actually paid $500million to date. He said the banks approached the CBN, pleading that the balance be paid in naira, since the value of the local currency has fallen so badly, as well as the fact that there is acute shortage of the greenback.