The Central Bank of Nigeria, CBN, on Wednesday, July 15, requested statutory powers to freeze accounts linked to criminals in the country.
1st News reports that this was contained in a statement issued by CBN’s Director Legal Services; Mr. Kofo Salam-Alada, at the Senate Committee’s public hearing on its Bill for an Act to Repeal the Banks and Other Financial Institutions Act (BOFIA) 2004 and re-enact the Banks and Other Financial Institutions Act 2020.
Further, the CBN called for creation of a Credit Tribunal to strengthen credit recovery processes and enforcement of collateral rights.
Specifically, Salam-Alada explained to the lawmakers that the 2004 BOFIA provided for the CBN governor “to apply to the court for orders to freeze accounts; which are deemed to be linked with criminal and other civil infractions.”
However, he noted that in the new bill, which has passed through the First and Second Readings; that provision was omitted, entirely.
“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 said.
Meanwhile, on the Creation of Credit Tribunal, the director defended the position of the CBN. According to him, such a tribunal would greatly enhance loan recovery in the nation’s banking industry.
“As part of measures to address the role of non-performing 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 (OFls) and enforcement of rights over collateral securities,” the director said.
Also, on dormant accounts in banks, the CBN called for the inclusion of provisions to improve the administration of such accounts; adding that “such provisions should address such requirements as the criteria for determining dormancy; the processes for managing the funds in dormant accounts and procedure for reclaiming funds by beneficiaries.”
Equally important, the CBN urged a review of the framework for managing failing institutions in line with international standards to properly delineate roles for the agency tasked with managing failing banks and other financial institutions and those with responsibility for resolving banks and other financial institutions whose licenses have been revoked.