NFIU threatens to sanction banks over illegal withdrawals from LG funds


Nigerian Financial Intelligence Unit (NFIU) has issued guidelines to stimulate the reduction of crime vulnerabilities created by cash withdrawals from local government funds across the country.

Acting Chief Media Analyst of NFIU, Ahmed Dikko, made this known in a statement in Abuja on Monday. He announced that the effective date for operation of the guidelines was June 1.

He urged all financial institutions, relevant stakeholders, public servants and citizens to ensure full compliance with the provisions of the guidelines which had already been submitted to the institutions.

“The guidelines include full enforcement of corresponding sanctions against violations,” he stated.

Mr Dikko said that cash withdrawal and transactions from State Joint Local Government Accounts (SJLGA) “posed (the) biggest corruption, money laundering and security threats at the grassroots and to (the) entire financial system and the country.

He said, “with this analysis, the unit decided to uphold the full provisions of Section 162 (6) and (8) of the 1999 Constitution.

“State Joint Local Government Account shall be paid in, allocations to the local government councils of the state from the Federation Account and from the government of the state.

“The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state and not for the other purposes.

“As far as the NFIU is concerned, the responsibility of the account as a collection account is fully reinstated.”

The media analyst explained that the measures were necessitated by reasons on the NFIU to respond to threats of isolating the country’s financial system by international financial systems due to deficiencies in anti-money laundering.

“Therefore, it is no longer possible to allow the entire system to suffer deliberate and expensive infractions or violations by public officials and business interests.

“With effect from June 1, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, locally and internationally.

“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000 per day.

“Any other transaction must be done through valid cheques or electronic funds transfer,” Mr Dikko said.


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