The Nigerian Financial Intelligence Unit, NFIU, has vowed to impose sanctions on any commercial bank which allowed transactions from any local government account without monies first reaching the LG account.
This essentially bars the access governors have to LG funds as currently obtained in most states where there is the State Joint Local Government Accounts, SJLGAs.
A statement issued in Abuja Monday by the Acting Chief Media Analyst of the NFIU, Mr. Ahmed Dikko, said from June 1, 2019, any bank that flouts the directive will be sanctioned 100 per cent locally and internationally.
The agency also stated that no cash withdrawal exceeding N500,000 per day could be made from any local government account with effect from June 1, 2019, noting that any other transaction must be done through valid cheques or electronic funds transfer.
It directed all financial institutions, relevant stakeholders, public servants and the public to ensure full compliance with the provisions of the guidelines which had been submitted to financial institutions and relevant enforcement agencies.
The NFIU disclosed that the complete guidelines had been released to the Governor of the Central Bank of Nigeria, CBN; the Chairman, Economic and Financial Crimes Commission, EFCC; the Chairman, Independent Corrupt Practices and other related offences Commission, ICPC, and Chief Executive Officers of all banks and other financial institutions.
It stated that the directive was sequel to findings which indicated that cash withdrawals and transactions of the State and Joint Local Government Accounts posed the “biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole.”
The anti-graft agency further explained that the measures were necessitated by the threats of isolation of the Nigerian financial system by other international financial systems on account of the deficiencies in the nation’s anti-money laundering and counter-terrorism financing implementation.
The NFIU explained that it would not allow the system to suffer the deliberate and expensive infractions or violations by public officials and private business interests.
It said, “Henceforth, all errant individuals and companies will be allowed to face direct international and locally targeted sanctions, in order not to allow any negative consequences to fall on the entire country.
“To be precise, with effect from 1st June, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent both locally and internationally.”
“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government for a cumulative amount exceeding N500,000 per day. Any other transaction must be done through valid cheques or electronic funds transfer.”
“Any state government that is willing to seek any expert economic advice in the unlikely event of these guidelines constituting an inconvenience to the management of the state can work with the NFIU or CBN,” the statement added.