Opinion
Fuss Over BVN Deadline
Justice Nnamdi
Dimgba of the Federal High Court, Abuja, caused nervousness among stakeholders in Nigerian banks with his recent interim order for the forfeiture to the Federal Government of all monies in the bank accounts of corporate/governmental institutions and individuals that are without Bank Verification Numbers (BVN).
The court had also ruled that the order should be enforced two weeks from the date it was issued if owners of such accounts failed to show cause why their monies should not be relinquished.
It further ordered the 19 commercial banks in the country to disclose the details of all such accounts in their custody, the balances in the accounts, their owners and their proceeds in affidavit of compliance deposed to by their chief compliance officers, pending the determination of the substantive suit. The order followed an application by the Attorney General and Minister of Justice, Abubakar Malami, SAN, on behalf of the Federal Government.
This ruling has brought forth mixed reactions across the length and breadth of the country. The banks are already considering filing a class-action suit to prevent the Federal Government from executing the order.
The government claims that as at February 2017 there were over 51.72 million accounts in the banking sector without BVN. A statement by the Nigerian Interbank Settlement System, NIBSS, indicated that there were a total of 97.57 million accounts in the banking sector as at February with only 51.72 million of them with BVN.
The development has engendered raging debates on the legality or otherwise of the planned forfeiture of funds in accounts without BVN. Opinions are segmented while some Nigerians keep fulminating against the government; has government crossed permissive lines in the banking industry?
Many Nigerians have interrogated its legality and have reached the conclusion that the action, if implemented, will discourage financial inclusion that the nation is in dire need of. They equally fear that the seizure of these funds may also inhibit financial system stability.
As the argumentation advances, the questions to ask are, what will happen if an account holder has died and the matter is in administration or when money in an account is a subject of litigation? What will the bank do in such circumstances? Will it abdicate a customer’s deposit and face litigation?
Again, what will be the fate of Nigerians in Diaspora who have accounts domiciled in the country but are without BVNs? What about Nigerians serving long prison terms? Will they lose their deposits as well?
To me, these are questions that require immediate answers, not the uncertainties that the ordered loss may throw up. Clearly, the plan by government to take over monies in these accounts isn’t well thought-out. The scheme was rushed through to ambush funds in certain bank accounts that have not been linked to the BVN scheme.
The Federal Government needs to adopt cautious approach to the matter to avert actions that may derail the intended gains of the court order, which is to rid the banking industry of money laundry and other inappropriate practices.
There is also the apprehension that if implemented, the relinquishment order could lead to a liquidity squeeze in the country, even if it enhances honesty and transparency in the banking sector. That may eventually cause the economy to shrink again and become very complicated to manage. These options have to be carefully weighed.
What I expect the government to do is to develop policies that will embolden rather than dampen financial inclusion. Moreover, there are still challenges in the implementation of the BVN scheme which should have been corrected by now before resorting to the courts to confiscate monies without BVNs.
I am not inadvertent of the fact that the Federal Government is desperately seeking ways to broaden its revenue base. But this shouldn’t be done at the prejudice of the citizens’ constitutional rights. I agree completely with lawyers who have argued that deploying interim orders for permanent purposes such as individual or corporate assets does not forebode well for Nigerians.
After all, there is no provision in the Money Laundering (Prohibition) Act (2011), that makes BVN a condition precedent to operate a bank account in Nigeria. BVN is a mere policy decision of the Central Bank of Nigeria, CBN, and so lacks the force of law. As such, it may not be expedient for a competent court of law to base its decision on an executive policy not backed by law.
The truth is that the CBN has to grant all account holders sufficient time to comply with its directive. Enforcing the order of forfeiture without an Act of the National Assembly amounts to illegality and an infraction of the constitutional rights of citizens and the corporate bodies involved.
Rather than seize funds in the accounts, the government should restrict access to non BVN accounts, especially if it vigorously suspects that they are being utilised for money laundering and other illegal activities.
By: Arnold Alalibo
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