the account of banks when it imposes

 

CContrary to speculation in some quarters that the Central Bank of Nigeria (CBN) might soften the sanctions it imposed on four banks for helping MTN Nigeria Communications Limited illegally repatriate funds, the apex bank has debited the lenders’ ac-counts with the huge fines it slammed on them for the violation, New Telegraph learnt yest usatimes.cc erday The regulator had, last week, announced that it had fined Standard Chartered Bank N2.4 billion; Stanbic IBTC, N1.8 billion; Citibank, N1.2billion and Diamond Bank, N250 million for allegedly assisting the telecoms giant to illegally move $8.13 billion abroad. It also ordered the lenders and MTN to immedi usanews.cc ately refund the repatriated sum. Following the public announcement of the fines, the four lenders had separately issued statements, indicating that they were prepared to engage with the CBN to resolve the issue.

However, New Telegraph gathered from a reliable source at the CBN that the banking watchdog had debited the accounts of the affected lenders with the fines. This means that Standard Chartered Ba news nk’s account has been debited N2.4 billion, Citigroup’s N1.2 billion, Stanbic IBTC’s, N1.886 billion and Diamond Bank’s, N250 million.

The CBN usually debits the account of banks when it imposes a fine or to implement aspects of its monetary policies such as Cash Reserve Requirements (CRR) if such lenders do not comply. In a letter dated September 6, to the Nigerian Stock Exchange (NSE), Stanbic IBTC, confirmed the development, informing stakeholders that the CBN had debited the full amount of the stated fine from the bank’s account with the apex bank. The letter, signed by the Group Company Secretary, Chidi Okezie, and Acting Head, Marketing and Communications, Bridget Oyefeso- Odusami, stated in part: “Following our earlier announcement to The Nigerian Stock Exchange on 30 August 2018, in respect of the penalty of N1.886 billion imposed by the Central Bank of Nigeria on our banking subsidiary – Stanbic IBTC Bank Plc in relation to the remittance of foreign exchange on the basis of certain capital importation certificates issued to MTN Nigeria Communications Limited, we write to update the NSE that the CBN has debited the account of our banking subsidiary with the CBN for the full amount of the above stated fine advised to the Bank.”

The lender further reiterated its position that it has not breached any extant laws relating to Certificates of Capital Importation (CCIs) executed on behalf of MTN, adding, it will continue to provide the CBN with documents and details to support its stance that the transactions on behalf of MTN were not illegal. When contacted, a Standard Chartered Bank official did not confirm that the bank’s account had been debited, only stressing that the lender was fully cooperating with the CBN with a view to resolving the issue as soon as possible. Similarly, Citibank said in a statement it had sent a detailed response to the CBN addressing the allegations. Also, while MTN has strongly denied any wrongdoing, the CBN has emphasised that the telecoms company must comply with the directive. In fact, a few days ago, the apex bank dismissed reports that MTN may refund $8.1 billion demand in local currency. Isaac Okorafor, CBN’s spokesperson, said MTN would not get a naira-denominated benefit to refund the $8.1 billion.

He was quoted as saying: “The report is very clear, what we have here is in dollar terms and not naira.” In a related development, citing the CBN’s CCIs allegation, coupled with the report that the Nigeria’s Attorney General (NAG) is seeking payment of $2 billion in taxes allegedly incurred over the last decade by MTN, Moody’s Investors Service has announced that it had placed the telecom firm’s ratings on review for downgrade. “MTN’s ratings have been placed on review for downgrade to reflect the uncertainty around the potential implications of the recent CBN and NAG announcements on MTN’s credit profile,” Moody’s said.