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Reps Seek to Warehouse Dormant Accounts in CBN



  • Reps Seek to Warehouse Dormant Accounts in CBN

The House of Representatives moved on Monday to contain abuse of depositors’ dormant accounts by commercial banks in the country.

Amendments to the Banks and Other Financial Institutions Act, 2004 have been proposed to stop the trend by empowering the Central Bank of Nigeria to assume control of such funds after a stipulated period of inactivity or dormancy.

A public hearing organised by the House Committee on Banking and Currency on a bill seeking to address the issue opened in Abuja on Monday.

The new bill is entitled: ‘A Bill for an Act to Amend the Banks and Other Financial Institutions Act to among other things, establish a deposit fund at the central bank for standardisation and management of dormant accounts in accordance with international best practices and for other related matters’.

The committee, which is chaired by Mr. Chukwudi Jones-Onyereri, said billions of naira belonging to Nigerians were held by the banks owing to a number of factors, including incarceration of the account owners, ill-health and death.

Lawmakers noted that banks could resort to abusing the funds by converting them to other uses without the knowledge of the account owners or their heirs.

“We in the House of Representatives have always pride ourselves for dispassionate argument, devoid of party lines, at least as much as humanly possible. It is with this same spirit that I hope stakeholders here present will argue their cause, with none but the Nigerian spirit and interest at the fore,” Jones-Onyereri stated.

The CBN is to assume control of the dormant accounts within six months of inactivity, after the account holder has been notified and is still non-responsive.

At the session, the CBN gave its support to the bill, saying that it fell in line with its existing regulations on the handling of such accounts by commercial banks.

An official from the Legal Department of the apex bank, Mr. Kofo Abdulsalam-Alaga, said an accountholders should be notified at inception what would happen to the accounts should they become dormant.

He stated, “We align ourselves with this bill. Banks should start disclosing to customers what will happen to dormant accounts when they are opening such accounts.

“The law should also give the CBN express powers to make regulations for the management of these funds.”

But, the Nigerian Deposit Insurance Corporation disagreed with the CBN over which organisation should warehouse the funds.

According to the NDIC, it is part of its primary duties to insure bank depositors’ funds and not the CBN.

The NDIC was represented by the Secretary of its Board, Mr. Belema Taribo, who made a spirited case for the corporation to keep the funds.

“These are funds at risk. They are dormant. The money should be warehoused by the NDIC, being that we are the insurer of funds,” Taribo argued.

He informed the committee that the incidences of unclaimed funds or dormant accounts were real, including accounts operated by government agencies.

Taribo added that despite the introduction of the Treasury Single Account, dormant agency accounts still existed and must be mopped up for proper management under the new law in view.

The NDIC seized the opportunity to raise the alarm over rising cases of non-performing insider loans, which he said constituted the highest percentage of non-performing loans in the banking industry.

It warned that the banking sector was being negatively affected by loans offered to directors and their family members by the banks.

Taribo told lawmakers that the position of the NDIC had been that the Banks and Other Financial Institutions Act should be amended to “prohibit directors and insiders from accessing loans in their banks.”

“This is almost crippling the banking sector. We had a bill on it, which we sent to the National Assembly to amend the BOFI Act in this respect, but I don’t know what happened to the bill,” he added.

However, lawmakers blamed regulators, primarily the CBN, for allegedly looking the other way, despite being aware of the insider abuses.

For instance, Jones-Onyereri recalled that under extant regulations, a director was not entitled to a loan above N50,000.

He added, “But, we know that directors are accessing billions of naira and nothing is happening to them. The CBN can’t claim not to be aware of these abuses. As a House, we have resolved that these abuses can no longer go unchecked.

“We are going to amend all the ridiculous penalties in the BOFI Act to spell out stiffer penalties for offences. The banks can pay some of these fines as they are today without bathing an eye. Such fines as N50 or 100. I believe when you have a fine like N20m, a bank will have a second thought before committing any infraction.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Dangote Commits $700M To Sugar Production In Support of Backward Integration Policy



Dangote Sugar Refinery Plc

The management of Dangote Sugar Refinery Plc has said it is committing over $700m to its sugar projects to support the Backward Integration Policy of the Federal Government to make Nigeria self-sufficient in sugar production.

According to a statement issued on Sunday by Dangote Industries Limited, the company disclosed this to visiting members of the Nasarawa House of Assembly on Friday.

The company noted that Nigeria was one of sub-Saharan Africa’s largest importers of sugar, second only to South Africa with an annual import of over $337m.

The Dangote Sugar management however assured the lawmakers that with the completion of its sugar projects in Nasarawa and Adamawa under the BIP, the nation would be saved more than half of the forex expended on sugar imports annually.

It added that the investment would also lift its people as other people-oriented infrastructures would come with the sugar projects.

The state lawmakers commended the Dangote Group for the choice of the state for the project and the accelerated pace with which the project was being executed, despite occasional delays arising from communal disagreements.

General Manager for the BIP, Dangote Sugar, John Beverley said when the factory was fully operational, it would have the capacity to crush 12,000 tons of cane per day, while 90MW power would be generated for both the company’s use and host communities.

He also disclosed that some 500km roads in all would be constructed to ease transportation within the vicinity. He solicited the support of the lawmakers in controlling the menace of land encroachment by settlers and itinerant farmers.

The Speaker of the Nasarawa State House of Assembly, Ibrahim Abdullah, and his team members, who were conducted around the company’s 78,000 hectares BIP in Tunga Awe Local Government Area commended the company for the project.

Abdullah noted that it would not only open up opportunities in the state but in Africa as a whole, and said the lawmakers were ready to partner and support the company towards the realisation of the sugar project through the relevant legislation.

When phase II of the project is completed, according to the company, it will make it the largest sugar refining plant in Africa.

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French Trade Advisors pledge Massive Investment In Lagos Free Zone



The Conseillers du Commerce Exterieur (French Foreign Trade Advisors) has expressed readiness to invest massively in the Lagos Free Zone (LFZ) being developed by the Tolaram Group as they endorsed the zone as the ideal industrial destination for French businesses in Nigeria.

This was made known on Thursday, April 15, 2021, during a visit to the Lagos Free Zone. The delegation led by the Ambassador of France to Nigeria, His Excellency Jerome Pasquier accompanied by his Economic Advisor, the Consulate General of France in Lagos and the Conseillers du Commerce Exterieur comprising of CEOs of several French businesses in Nigeria.

Speaking during the visit, the Ambassador of France in Nigeria, His Excellency Jerome Pasquier explained that the aim of the visit of the Conseillers du Commerce Exterieur to Lagos Free Zone (LFZ) was to discover the opportunities in the Lagos Free Zone and the Lekki Port project, which is expected to have a huge positive impact on businesses in Nigeria.

Pasquier commended Tolaram Group, the promoter of the zone, for the foresight of integration of Lekki Port into the master plan of the Lagos Free Zone (LFZ), which would serve as the gateway for import and export from the zone thereby giving businesses in the zone a competitive edge.

The Ambassador also commended the Lagos Free Zone (LFZ) for its Master Plan for the zone which includes world-class infrastructure that is in line with its vision to be the preferred industrial hub and investment destination in West Africa.

“I am impressed by the huge size of the Lagos Free Zone project. We are very happy that the French companies will be deeply involved in this Lagos Free Zone project. It is really impressive to see how ambitious this project is. The French Minister was in Nigeria yesterday and I explained to him that Nigeria is a country where we can have big projects. For us, this project means big opportunities and that explains why we need to be here. We are happy to be here and work with Tolaram Group”, he added.

It is noteworthy to mention that the first French company to be established in the Lagos Free Zone is the terminal operations arm of CMA – CGM which has established a subsidiary within the Lagos Free Zone and is the appointed operator for the container terminal operations scheduled to commence at Lekki Port next year.

In his remarks, the Chief Executive Officer, Lagos Free Zone (LFZ), Mr. Dinesh Rathi assured the Ambassador of France and the Conseillers du Commerce Exterieur that the zone remains the best destination for investment in Nigeria and the West African sub-region given the seamless integration with Lekki Port and the world-class infrastructure provided by Lagos Free Zone.

Explaining the configuration of the zone, Rathi disclosed that the clustering is planned in line with the international best practices of Work, Live, and Play. He stated that the land-use plan of the Lagos Free Zone allocates 70 percent area towards industrial developments, 20 percent towards logistics and support services while the real estate will cover the remaining 10 percent.

He also stated that Lagos Free Zone (LFZ) has simplified the process of business entry and operation in the zone in line with the Federal Government of Nigeria’s Ease of Doing Business policy.

“We have made it very easy for the business to berth and take off at zone by making our process less cumbersome and friendly, we are open for business 24/7 and willing to help investors to settle in very fast,” he said.

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AIICO Refutes Claims of Non-Remittance of Pension Assets to PTAD



AIICO Insurance Plc has refuted claims of non-remittance of pension assets to the Pension Transitional Arrangement Directorate (PTAD).

This was disclosed recently in a statement by Segun Olalandu, the Head, Strategic Marketing and Communications Department.

It stated: “The attention of the Management of AIICO Insurance Plc. has been drawn to a recent report in the media on allegations of non-remittance of pension assets to the Pension Transitional Arrangement Directorate (PTAD).

“AIICO Insurance Plc. hereby wishes to inform the public that all pension assets due for remittance have been duly transferred to PTAD since the year 2017, in full compliance with the directive. Both parties are presently engaged in a reconciliation exercise to conclude the process. We implore the public to disregard any information that may suggest otherwise as there is no basis to that effect.”

Mr. Segun assured that AIICO Insurance Plc. remains a responsible corporate citizen of Nigeria and will continue to engage the best practice in all its business activities and operations in line with extant laws and regulatory provisions guiding its practice.

AIICO Insurance is a leading composite insurer in Nigeria with a record of serving our customers that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance, and investment management services as a means to create and protect wealth for individuals, families, and corporate customers.

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