Lawmakers probe banks over N1.2trn unclaimed funds

By Ismail Azeez, Matthew Dennis and Ariemu Ogaga

The House of Representatives’ Ad Hoc Committee on Unclaimed Funds in Commercial Banks and Infractions by the Central Bank of Nigeria (CBN) has commenced  investigation of funds stuck in the Deposit Money Banks, also known as commercial banks. This is due to the failure to link the account holding them to a Bank Verification Number (BVN) and the Treasury Single Account policy of the Federal Government.

The committee, yesterday inaugurated with several invited ministries, departments and agencies of the Federal Government as well as banks in attendance.

The committee is particularly probing   over 45 million accounts said to be holding funds amounting to over N1.2tn.

On January 26, 2022, the House had resolved to set up the committee to investigate the “suspicious and unclaimed funds” sitting with various accounts.

The committee will also investigate the unremitted funds collected on behalf of ministries, departments and agencies of the Federal Government by the banks.

The House had further mandated the committee to “look into the alleged  infractions by the Central Bank of Nigeria against the provisions of the enabling Act and Laws of the Federal Republic of Nigeria and the good people of Nigeria, especially in the area of intervention projects and programs.”

The committee is to report back within eight weeks for further legislative action.

These resolutions were based on a motion moved by a member, Dachung Bagos, titled ‘Need to Investigate Unclaimed Funds in Nigerian Commercial Banks and the Infractions by the Central Bank of Nigeria,’ which the lawmakers unanimously adopted.

Moving the motion, Bagos noted that the Bank Verification Number was introduced by the CBN in 2014 to the Nigerian banking system as a way of checking and combating money laundering, illicit financing and duplicitous ownership of bank accounts used for fraud.

Bagos stressed that about seven years after the introduction of the BVN, about 45.85 million bank accounts across Nigeria are yet to be linked to BVNs, as data released by the Nigerian Inter–Bank Settlement Systems on June 23, 2021, disclosed that the total number of bank accounts in Nigeria, as of May 2019, was pegged at 122.071 million and the active accounts, as of May, 2020 stood at 72.936 million.

The Chairman of the committee,  Unyime Idem, after representatives of the MDAs made their remarks, said, “For commercial banks, this resolution stipulates that you submit documents that would help us recover unclaimed funds in about 45 million accounts that are not linked to the BVN.

“About 45 million accounts are what the House has been able to discover through the recent reports. Those accounts are not linked to BVN. So, money in those accounts, we want to know the positions, whether you have refunded the FG or what happened to the funds. You are going to give us documents to back these investigations.”

According to Idem, the committee’s assignment is “enormous, crucial and sensitive, given what the country is facing economically.

He said, “We believe that the outcome of this  probe would help the country to recover a very substantial part of the unclaimed funds that have been hanging in some of the Nigerian commercial banks and other unauthorized hands.

“Money meant for the Federal Government is not supposed to sit with unauthorised hands for a very long time. Any money that was disbursed or meant for the Federation Account, if the contract has failed or was not executed, the proper thing is for the money to be refunded to the same source it came from.

“But unfortunately, whether out of oversight or deliberate; for whatever reason, so much money, based on the recent discovery, has been tied down somewhere. That is what informed the National Assembly, precisely the House of Reps, to commence this investigative hearing.”

The lawmaker also read a riot act to the stakeholders, saying, “For commercial banks and other agencies that are sitting on these funds that belong to the Federal Government, that are not willing show cooperation and not willing to refund; for banks that are collecting funds on behalf of the government, I think this House would not have a choice but to stop you from collecting funds on behalf of the government if you don’t show cooperation.

“But if you do, it would be a win-win. When we look at your books and then you check the one that belongs to the government and refund it appropriately, there would not be any issue.”

Earlier, while declaring the event open, Deputy Speaker of the House, Ahmed Wase, noted that the motion stated that about N1.2tn was not paid into the Consolidated Revenue Fund. He said the probe was necessary “so that we can improve the infrastructure deficit and other challenges in our nation.”

In his remarks, Director-General of the Budget Office, Ben Akabueze, who represented the Minister of Finance, Budget and National Planning, Zainab Ahmed, noted that over years, there had been circulars from government authorities to those concerned to enforce the TSA and BVN policies.

He said, “When we received this invitation that talked about unclaimed funds in Nigerian commercial banks, basically, my initial reading of this was that it was related to inactive accounts, dormant accounts; because the extant regulation guiding the management of these issued by the CBN, in October 2015, provides guidelines for the management of inactive accounts dormant accounts and unclaimed funds.

“Those guidelines obligate any bank to have notified the Federal Government of the existence of any such funds belonging to it. If they had I am sure that those funds would not be there. I hope, without prejudice to the work of this committee, that the CBN would also do the job of enforcing its own guidelines.

“As the work of the committee progresses, whatever other specific information required of us as a ministry, we would be able to provide.”

While reacting to this development, Dr. Basil Chukwu, a lecturer of Economics at Alex Ekwueme Federal University Ebonyi State, said Central Bank of Nigeria (CBN), should have been more proactive in handling the idle fund by investing the money into the Nigeria Economy.

Chukwu charged the Central Bank of Nigeria to partner with other Government Financial Institutions in putting an end to monetary value stocks in the commercial banks without ownership.

“First and foremost is that the 45million account yet to be linked to their Bank Verification Number (BVN), calls for great concern within the economy.

“This expose the fact that there are some illicit transactions going on in the country.This further shown that the Central Bank of Nigeria(CBN) is not proactive. In an economics we discourage idle balance.

“The CBN would have find a way around it to ploy such fund into the economy. The said N1.2trillion would have been used to carry out numerous interventions by CBN such as Loans to businessess, others to boost the Economic as long as it is for greater good,” he said.

The Lead Strategist of Nigerian Workforce Strategic and Enlightenment Centre (NIWOSEC), Comrade David Ehindero said “We hope that the intended probing by the Ad Hoc Committee is not a media thing. The Committee has done well in opening up the intention but the probe should be done by anti corruption agencies like the EFCC and ICPC which are core professionals in saddling such responsibilities without rancours.

According to him, members of House are Politicians and the level of probing over 45 million accounts said to be holding funds amounting to over N1.2 trillion can easily be Politicizes by their colleagues who own such Accounts.