Senate has unravelled N30 trillion foreign exchange frauds by all commercial banks in Nigeria. The alleged fraud was perpetrated by the commercial banks that collected foreign exchange on behalf of importers.
The fraud, which the legislative body revealed, covered between 2006 and March 2017, involved both ‘living and dead’ commercial banks.
“We have been able to also go into the database of the operating system in the Nigeria Customs Service (NCS). And we identified Form M by Form M, import by import, vessel by vessel, liabilities of importers and commercial banks that are yet to be handled. We are talking about monies in regions of over N30 trillion.
“There is no bank that is exempted. All the banks are involved. Both the banks that are dead and the ones living. The ones that are no more operating were acquired by some banks. So, the activities of those banks that are no longer in operation we have been able to tie them to those that acquired them as part of the liabilities,” chairman, Senate Committee on Customs and Excise, Hope Uzodinma said on Wednesday.
To this end, the panel has queried the commercial banks on the non-utilisation of foreign exchange and gave them three weeks to respond.
Uzodinma, who disclosed this in a meeting with representatives of all the banks alongside the Central Bank of Nigeria (CBN) and Ministry of Finance on Wednesday, said the documents were obtained from the NCS.
He said finance minister, Kemi Adeosun, her counterpart in budget and national planning, Udoma Udo Udoma, governor of the CBN, Godwin Emefiele, as well as chief executives of the commercial banks were expected to appear before the panel next month.
While accusing the banks of foreign exchange allocation manipulation, the lawmaker expressed concern that the amount of foreign exchange government was giving out to commercial banks and importers for the purposes of importation were not being utilised.
The panel also gave hard and soft copies of the transactions to the banks concerned at the meeting.
According to Uzodinma, the investigation was sequel to a motion at plenary, asking the panel to probe and identify areas of revenue leakages in the import and export value chain.
Speaking with journalists after the meeting, Uzodinma said: “The committee started investigation and took time to enter into the import and export value chain and identified supposedly areas of leakages and malpractices, ranging from unutilised Form ‘M’, abandoned Form ‘M’, partially utilised Form ‘M’, abandoned assessments of Custom Duties and foreign exchange allocation manipulation.
“And we have been able to give all this information to the various banks who purchased foreign exchange on behalf of the importers to go home and come back to show us evidence utilisation of the forex, failure of which they will be compelled to refund those foreign exchange they bought from Central Bank or inter-bank, purposely to be used for import.
“What we are saying in essence is that the amount of foreign exchange government is giving out to commercial banks and importers for the purposes of importation are not being utilised as agreed. In essence making the foreign exchange scarcity scarce in the market.
“So, we don’t see this as a healthy development because in the process, some Asian companies are now round-tripping, sending monies that they don’t deserve out of this country without due process.”
This, he said, is responsible for the scarcity of foreign exchange in the market, adding that by the time the panel concludes its investigation and action plans implemented, the issue of forex scarcity would drastically reduce.
“I can tell you that the exchange rate will come down drastically because only genuine importers will now enjoy government forex allocation”.
On why the committee is picking on commercial banks only and excluding the importers, he said: “The Foreign Exchange Utilisation Manual prepared by the Central Bank as a regulation guiding import and export has entrusted with commercial banks this quantum of responsibilities. Because they are purchasing this money on behalf of the importers.
“So, once you are acting on behalf of somebody the offence or the inaction of that person is your own inaction. So, we are now calling the banks because they are supposed to be the gateway for us to enter into the stream. So, by the time the banks who must have carried Know Your Customer programme, they know the address, the places of these importers and they are the people that opened Form M for them.
“They are the people that purchased these foreign exchange for them. And the regulation requires them to monitor to ensure that these importers pay the correct custom duties on the importation. And also, there is what we call Bills for Collection. It is the responsibility of the banks to know, ascertain, confirm that the documents sent as Bill for Collection that will warrant the release of the forex to the exporter are genuine.”
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