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CBN Finally Prohibits Foreign Cash Deposits by Banks

Bank customers with US dollars or any foreign currency will no longer be able to pay cash into their domiciliary accounts. This is because the Central Bank of Nigeria (CBN) has proscribed the acceptance of foreign cash deposits by commercials banks operating in the country.

The policy became effective yesterday.
The central bank gave the directive in a circular addressed to all authorised dealers and the general public.
Prior to the CBN circular, banks in the country had been rejecting foreign currency deposits from their domiciliary account holders since last week.

To this end, the CBN said it considered the recent statement by banks concerning the large volume of foreign currencies in their vaults and their decision to stop accepting foreign currency cash deposits into customers’ domiciliary accounts as a welcome development.
“Therefore, in its continued effort to stop illicit financial flows in the Nigerian banking system which aligns with the anti-money laundering stance of the federal government, the CBN prohibits from the date of this circular, the acceptance of foreign currency cash deposits by banks,” it added.

In a related development, the Senate yesterday expressed grave concern over the continuing depreciation of the naira and consequently summoned the Governor of the CBN, Mr. Godwin Emefiele, to brief it on the situation.

In the same vein, the Senate Committee on Ethics and Public Petitions has summoned the Director General of the Department of State Security (DSS), Lawal Daura over allegations of undue interference in the affairs of the Rivers State Election Tribunal.
The parliament also urged the federal government to intensify efforts at diversifying the national economy from dependence on oil exports into taxation, agriculture, manufacturing, international tourism and solid minerals prospecting.

The resolution was the aftermath of a motion moved by Senator Nazif Suleiman (Bauchi North), who expressed “serious concern over the state of the Nigerian economy as it affects the naira”.
According to him, the Senate was worried that the naira had depreciated in the last few months at a much faster rate than it had appreciated in the last two years.

He further argued that the depreciation was a consequence of lower revenue resulting from lower oil prices. The situation, he added, had been worsened by speculation in the foreign exchange market.
He also said the Senate observed that the foreign exchange needs of various sectors of the economy was being made available while Nigeria’s commitments in the global economy had dwindled.

The senator also expressed suspicion that the Nigerian banking industry might be currently defaulting in the global economy, a situation he said was sending the wrong signals on the economy.
Suleiman also said speculative activities caused by the situation was resulting in huge capital flight with attendant inflationary consequences, which he said would affect the average Nigerian on the street.

He noted that the “illicit fund flows and money laundering going through the Nigerian financial system contribute to weakening the naira which brought about the recent decision of CBN to increase its vigilance to ensure that Nigerian banks are not used as conduits for illicit fund flows and money laundering in foreign currencies”.

He canvassed the need to regulate the demand and supply of foreign exchange by the CBN through the various options available to curtail the depreciation of the naira and consequently discourage speculation.
In his contribution, Minority Whip, Senator Philip Aduda, blamed the downward slide of the naira on the inability of the federal government to put in place stable economic policies.

Also speaking on the motion, Senator Gbolahan Dada (Ogun West), said if the situation must be effectively tackled, Nigeria must define its economic policies and make laws that will address fraud.
He regretted that Nigeria’s dependence on imported goods without tangible production had been the bane of a stable foreign exchange rate.

In his remarks, Senate President Bukola Saraki said all powers must be deployed to defend the naira, adding that the influx of foreign items into the country must be adequately curtailed in a way that activities of speculators would be brought under control.
He recalled that 15 years ago, when the government of President Olusegun Obasanjo began the move to stop the importation of cement into the country, it looked like a tall order.

“However, the policy has come to stay with the importation of cement completely stamped out,” he said.
Also yesterday, the Senate committed the request of President Muhammadu Buhari for the approval of a $75 million (N14.7billion) loan from the World Bank for  the Edo State Government to the yet to be constituted standing Committee on Local and Foreign Debts when constituted.

But the Senator representing Edo Central, Clifford Odia, opposed the request on the grounds that it will plunge the state into further debt, saying if the loan is approved, it will raise the state’s debt profile under Oshiomhole to N44.1 billion ($225m) from the World Bank.
Buhari while urging the Senate to approve the loan request, in his letter to the Senate on Tuesday, said the second tranche of a sum of $225 million put at $75 million, had already been approved by the Senate in 2012.

Also yesterday, the Senate launched an investigation into allegations of undue interference by the DSS in the handling of the Rivers State election petition.
Against this background, Daura is expected to appear before the Senate Committee on Ethics and Public Petitions today. The investigation was triggered by a petition to the Senate by the Rivers State House of Assembly last week.

The petition, which was sent to the Senate by all 31 members of the state assembly, alleged among others, that the DSS had arrested some officials of the Independent National Election Commission (INEC) as well as members of the Election Petition Tribunal and consequently subjected them to intimidation and harrassment with the intention to compromise the tribunal and truncate the course of justice.
At the commencement of the probe yesterday at the National Assembly, the committee chairman, Senator Samuel Anyanwu said the Senate wanted a prompt response to its invitations and questions on the petition.
Anyanwu also said the Senate would give due consideration to the allegation of abuse against the DSS in the petition. He also asked the petitioners to provide detailed information on the petition.
“The issue of independence of the judiciary is a very serious pillar in the dispensation of justice. That is why the committee takes the allegation of intimidation of tribunal members very seriously because if the judiciary is intimidated, then the independence is compromised.

“So we want all details about this allegation supplied to the committee without delay,” Anyanwu stated.
While defending the petition yesterday, the Speaker of the Rivers State House of Assembly Ikuinyi-Owaji Ibani, who led other members of the House to the meeting, disclosed that INEC Resident Electoral Commissioner in Rivers State, Mrs. Gesila Khan and other senior officials of the commission had been arrested and detained by the DSS in Abuja.

“We make bold to say that they lack the power or the authority to invite any judicial officer serving in the Rivers State Election Petition Tribunal for questioning concerning their handling of election petitions pending before them based on some purported petitions from interested parties,” he declared.

“While we commend the stance and efforts of President Muhammadu Buhari to instill discipline, strengthen institutions of state and deepen democratic values where all Nigerians will have equal opportunities, we are appalled by their present clandestine and surreptitious moves aimed at derailing an efficient, transparent and unbiased justice delivery system and thereby bringing the judiciary into disrepute, public ridicule and odiom,” he said.
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