CBN deducts N5.5bn from StanChart, Citi, Stanbic IBTC over forex infractions

The Central Bank of Nigeria has deducted total sum of N5.486 billion from accounts of Standard Chartered, Citigroup and Stanbic IBTC Plc over violation of extant laws and regulations, including the Foreign Exchange (Forex) mitoring and miiscellaneous Provisions.

The apex bank debited Standard Chartered the sum of N2.4 billion ($7.9 million), deducted N1.2 billion from Citigroup and N1.889 billion to meet a regulatory fine imposed last week when it was found to have aided telecommunications giant, MTN Nigeria, to illegally repatriate funds from the country.

The apex bank described reasons for the action as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’.

The CBN normally debits the account of banks when it imposes a fine or to implement aspects of its monetary policies such as cash reserve requirements.

One of the affected banks, Stanbic IBTC Holdings on Thursday announced that the CBN has deducted the N1.886 billion fine placed on it for its involvement in the $8.1 billion MTN deal.

The commercial lender in a notice sent to the Nigerian Stock Exchange (NSE) stated that the CBN has deducted N1.88 billion from the accounts of its banking subsidiary Stanbic IBTC Bank PLC.

This pertains to the fine imposed on the bank in relation to the remittance of foreign exchange on the basis of certain capital importation certificates issued to MTN Nigeria Communications Limited.

The lender’s group, in a statement signed by Chidi Okezie, Company secretary, stated that the CBN has debited the account of its banking subsidiary, Stanbic IBTC Bank which it has with the CBN to the tune of $8.1 billion for the full amount of the above-stated fine advised to the Bank.

The group stated “Stanbic IBTC Holdings PLC, as well as our banking subsidiary, maintain our position on this matter, which is the fact that the Bank has done nothing illegal and accordingly the Bank will continue to provide CBN with documents and details in support of our contention that our actions in relation to these transactions were not illegal.”

It further stated that “Please note that this debit does not impact on the capacity of our banking subsidiary to handle clients’ requests or clients’ ability to continue to carry out viable business transactions with either the Bank or any member of the Stanbic IBTC Group,

whether in relation to the importation of capital or otherwise, and our business transactions will continue to be handled professionally and in a manner that is aligned with Nigeria’s laws and regulatory guidelines.”

The Daily Times recalls that the CBN, had since last week ordered MTN and its lenders to return $8.134 billion it alleges MTN had sent abroad in breach of foreign exchange regulations.

MTN denies any wrongdoing, while Standard Chartered said it was fully co-operating with the central bank with a view to resolving the issue as soon as possible.

Citibank said in a statement it has sent a detailed response to the central bank addressing the allegations after the U.S. bank had received a letter imposing sanctions on it.

The centrak bank fined Standard Chartered, Citibank, Stanbic IBTC Bank and Diamond Bank, for allegedly failing to verify that MTN had met all its foreign exchange rules.

Stanbic IBTC Bank, the local unit of South Africa’s Standard Bank, was fined 1.8 billion naira and Diamond Bank 250 million naira.

Stanbic, said in a statement on Thursday that it had been debited by the central bank for the fine.

The bank, however, noted in a statement to the Johannesburg stock exchange that it would continue to engage with the central bank despite the debit.

But the CBN’s Director, Corporate Communications, Isaac Okorafor, had said that the actions of the Bank became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.

The CBN has therefore asked the Managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria.