Nigeran banks flout AML law

Nigerian banks have been indicted over non-compliance with the Money Laundering (Prohibition) Act, making them to serve as conduits for looting state resources.

A report by the Central Bank of Nigeria on Sunday said some banks flouted the Money Laundering Act but did not give the names of the banks involved in the offence.

The report titled ‘Banking Supervision Annual Report 2007’ said, “Some lapses were noted in banks’ compliance with the provisions of the Money Laundering (Prohibition) Act, 2004.

“These included non-observance of the know-your-customer principle, failure to fully report international transfer of funds of $10,000 and above, lack of full awareness of controls among employees and failure to include money laundering audit in the audit programme.”

The CBN in the report, however, said it continued to collaborate with the Nigerian Financial Intelligence Unit on the assessment of banks’ anti-money laundering control.

In the last eight years of former President Olusegun Obasanjo, powerful politicians siphoned states funds in connivance with the banks. But local banks, however, claimed innocence.

Meanwhile, the report said total assets of the banking sector increased, by 55.37 per cent or N3.73tn, from N6.74tn in 2006 to N10.47tn in 2007.

“As in 2006, banks’ funds were held in cash and due from other banks, while advances/leases, which constituted the largest component of total assets, grew from N2.081tn in 2006 to N3.802tn (36.32 percent) in 2007.

The report said the major components of liabilities also witnessed increases.

It further said total deposits, other liabilities, and paid-up capital and reserves rose by 55.81 per cent, 86.33 per cent and 64.36 percent, respectively.

It noted that in 2007, the aggregate deposits in the banking sector continued to grow.

“It grew from N1.4tn in 2003 to N1.8tn in 2004, N2.5tn in 2005, N3.4tn in 2006 and N5.4tn in 2007.

“The observed trend reflected a growth rate of 10.4 percent in 2003, 27.5 percent in 2004, 41.7 percent in 2005, 35.2 percent in 2006 and 55.8 percent in 2007,” it added.

Source: Punch