Foreign reserves: Reps probe banks over non-repayment of $7bn

Reps probe banks over non-repayment of $7bn

The House of Representatives, yesterday, mandated its Committee on Banking and Currency to investigate the non-repayment of $7 billion from Nigeria’s foreign reserves disbursed to 14 global asset managers and 14 Nigerian banks by the Central Bank of Nigeria (CBN) since 2006.

The 14 global asset managers and their Nigerian counterparts are: Black Rock and Union Bank Nigeria Plc., J.P. Morgan Chase and Zenith Bank Plc.; H.S.B.C. and First Bank of Nigeria Plc.; BNP Paribas and Intercontinental Bank Plc.; USB and United Bank for Africa.

Others are Credit Suisse and IBTC Chartered Bank Plc.; Morgan Stanley and GTB Plc.; Fortis and Bank PHB Plc.; Cominvest and Oceanic Bank Plc.; ING and Ecobank Plc.; Bank of the New York and Stanbic Bank Plc.; and Crown Agents and Diamond Bank Plc.

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The House took the decision at yesterday’s plenary session presided over by Deputy Speaker Ahmed Idris Wase following the adoption of a motion brought by Hon. Abubakar Yunusa Ahmad (APC, Gombe).

The banking and currency committee is to investigate the details of the disbursed funds by the Central Bank to the banks and the continued non-repayment of same 13 years after disbursement, as well as determine the terms and conditions of the disbursement to ascertain, if the terms and conditions have been complied with, as it relates to repayment of the fund and report back within eight weeks for further legislative action.

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While presenting the motion, Yunusa noted that sometime in 2006, the CBN disbursed $7 billion of Nigeria’s $38.07 billion foreign reserves to 14 global asset managers and their 14 Nigerian banks’ local partners to manage.

Yunusa submitted that he was aware that the CBN gave each asset manager and its Nigerian bank counterpart $500 million from the nation’s foreign reserves to manage.

The lawmaker said he was “concerned that of the 14 Nigerian banks that received the said funds about six of them namely; Oceanic Bank, Intercontinental Bank, Bank PHB, FIN Bank, AfriBank, and very recently Diamond Bank Plc. were merged/acquired by other banks under the oversight of the CBN.”

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He informed that the assets and liabilities of the six merged/acquired banks have been legally acquired as part of the legacies of the defunct banks.

He, however, expressed worry that after 13 years, Nigeria’s hard earned $7 billion foreign reserves has not been repaid to the CBN and there is no action put in place to ensure repayment of the funds.

The motion was unanimously adopted by the House.

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