The Central Bank of Nigeria (CBN) has issued an instruction to banks to remove the post-no-debit restriction from the bank accounts of 440 individuals and companies. Among these entities are fintech companies such as Bamboo and Risevest, as well as a sports betting company called Nairabet.
The directive was conveyed through a circular signed by A.M. Barau, the Director of Banking Supervision at the apex bank, and was sent to all banks. The banks are now required to notify all the affected customers, both individuals and companies, about this decision.
It could be recalled that in August 2021, the CBN secured a court order to freeze accounts belonging to individuals as well as companies including Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited for 180 days.
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According to the court document, the financial regulator was investigating ‘illegal foreign exchange transactions’ by the affected companies, which were weakening the naira. The companies were accused of carrying out forex operations to the detriment of the naira, which had been on a free-fall due to economic strains.
On the other hand, the accounts of the 440 individuals were blocked on the allegation that they were used to carry out cryptocurrency transactions and other forex operations that the central bank said were sabotaging the naira’s stability.
“That more specifically, there is a grave allegation that the defendants/respondents are engaged in illegal foreign exchange transactions, accessing/procuring of foreign exchange via their banks from the Nigerian foreign exchange market via several bureau de change, international money transfer operators and have transferred cash deposit of more than S10,000.00 (Ten thousand dollars) to various accounts overseas contrary to provisions of extant laws and regulations and also traded in foreign securities and cryptocurrencies in contravention to CBN Circular referenced TED/FEM/FPC/GEN/01/012 and BSD/DIR/PUB/LAB/014/001, dated February 5, 2021, and July 01, 2015.
“It is evident that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited are complicit in operating without a license as asset management companies and utilizing FX sourced from the Nigerian FX market for purchasing foreign bonds/shares in contravention of CBN’s directive,” the CBN said.
However, the apex bank refused to lift the restriction after the expiration of the court order, stymieing business for the companies. Chaka, Bamboo, and Risevest were asset management firms, helping Nigerians to trade in foreign stocks. Chaka had recently secured a license from Nigeria’s Securities and Exchange Commission (SEC) at the time.
CBN’s decision to lift the post-no-debit restriction on those accounts came weeks after Godwin Emefiele, who was the apex bank governor when the order was secured, was suspended and arrested.
The instruction to the banks as seen on the circular reads: “You are hereby directed to vacate the Post-No-Debit restriction placed on the accounts of the under-listed bank customers at our instance. You are also required to inform the concerned customers of the vacation accordingly.”