E-Financial
Worries over Arrests of Top Bankers for Alleged Terrorist Financing
The banking industry and State Security Service (SSS) are embroiled in claims and denials over the continued detention of senior personnel of 13 Nigerian banks for alleged terrorist financing and money laundering believed to have been perpetrated by Aminu Suleiman Lamido, son of Alhaji Sule Lamido, Jigawa State governor.
The banks whose staff are affected are Fidelity Bank Plc, First City Monument Bank Plc (FCMB), Wema Bank Plc, Access Bank Plc, Skye Bank Plc, First Bank Nigeria Limited (FBN), Sterling Bank Plc, Diamond Bank Plc, Zenith Bank Plc, Unity Bank Plc, Ecobank Plc, Guaranty Trust Bank Plc (GTBank) and Citibank.
THISDAY reeported that the chief executive officers of the affected banks have continued to receive a barrage of phone calls from both foreign institutional investors and their foreign partners over the allegation.
Some financial market analysts have also warned that the development, which is being closely watched by the global financial community could make foreign banks shut down credit lines, not just to the affected banks, but to all the other local banks.
In addition, it may also lead to the withdrawal of funds from the Nigerian banking system by the banks that have international affiliations, international institutional investors and may hamper the performance of banks listed on international stock markets.
Some of the banks with foreign investors include Diamond Bank, which has the International Finance Corporation (IFC) and Actis as institutional investors. The bank had also issued a Global Depository Receipts (GDR) and had done a private placement in US dollars in the past.
Also, Zenith Bank which issued a GDR last year, is also listed on the London Stock Exchange (LSE).
In the same vein, GTBank which has investment by IFC, had issued both the GDR and Eurobond and is concluding plans to float another $400 million Eurobond. It is also listed on the LSE.
While First Bank and Fidelity Bank have respectively tapped from the Eurobond and GDR markets, Citibank and Ecobank are international banks.
In addition, FCMB also has foreign investor in form of Sabre Capital, while Access Bank has investments from IFC and FMO, the private sector investment arm of the government of Netherlands, and had issued a Eurobond and GDR.
Commenting on the development, the chief executive officer of a leading financial advisory firm, who preferred anonymity, said: “It will make things extremely difficult for Nigerian banks.
Firstly, if you remember in the last five years, Mallam Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria (CBN), has been applauded and acknowledged for cleaning the system and so for anybody to come out now to say there is rot in the system, puts a lot of question mark on what the CBN had done.
“Foreign banks that have availing credit to Nigerian banks were doing so on the grounds that the banking system is transparent and properly governed, so the allegation might make some of them to start having a rethink on their relationship with Nigerian banks.”
Continuing, he explained: “For a bank like GTBank that has plans for a roadshow to market its Eurobond, it cannot do so again until this allegation is sorted out. For banks like Zenith, Fidelity, First Bank, Ecobank, Citibank, FCMB, Access and Diamond that have foreign investments in form of Eurobond, GDR and other form of partnership, they will feel the heat, which is not good for the country.
“The situation has the capacity of limiting foreign investment and participation in the Nigerian banking system, especially at a time when government is talking about attracting more foreign investment. So we may start seeing the exit of some of these foreign investors to countries like Ghana or Cote d’ Ivoire if the situation is not properly managed.”
Nigerian banks have resumed processing international tuition payments from Naira accounts through the Central Bank of Nigeria (CBN)’s Form A portal.
Form A is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase foreign exchange at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
This development comes a month after commercial banks announced the resumption of international transactions on their naira cards.
In an email to customers, Guaranty Trust Bank Limited (GTBank) and Lotus Bank announced that the service is now available for applicants paying undergraduate and postgraduate tuition fees abroad.
“Pay international tuition fees directly from your Naira account,” the notice from GTBank read.
To access the service, customers are required to register and submit their applications via the Trade System Portal at www.tradesystem.gov.ng.
GTBank explained: “Select the ‘Form A’ application for Educational Fees. Choose GTBank as the processing bank, attach required documents, and submit the application.”
Similarly, Lotus Bank stated, “Register on the Trade System Portal. Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application.”
In a similar notice, Lotus Bank also informed customers of processing international fees using its facility.
“Register on the Trade System Portal (www.tradesystem.gov.ng). Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application,” the bank said.
In 2022, Nigerian banks said international school fees and upkeep requests via Form A will be processed within 120 days due to forex scarcity at the time.
Safaricom, M-PESA and PayPal have announced a strategic collaboration to enable account linking and seamless fund transfers across their networks.
This collaboration aims to empower more than 35 million M-PESA customers and two million businesses and micro traders in Kenya to access PayPal’s global network.
By first linking their PayPal and M-PESA wallets, users can easily transfer funds from their PayPal accounts into their M-PESA wallets, and vice versa. This service is designed to enhance the experience for customers and businesses transacting between the two platforms.
The solution is currently available to Safaricom M-PESA customers in Kenya, with plans to roll out the service to the other M-PESA markets in the future.
“As globalization and digitization continue to reshape how people and businesses connect, our partnership with PayPal is a bold step forward in enabling seamless, worry-free, safe, secure, and inclusive digital payments.
“This collaboration empowers over thirty-five million customers and two million businesses and micro-entrepreneurs across Kenya to participate in the global digital economy by conveniently sending and receiving payments across more than 200 markets. It’s part of our commitment to unlocking opportunities and transforming lives through the power of M-PESA,” said Esther Waititu, Chief Financial Services Officer, Safaricom PLC.
“Building seamless connections between the global economy and local financial ecosystems is crucial to expanding digital financial inclusion,” said Otto Williams, Regional Head and General Manager for the Middle East and Africa, PayPal. “We are thrilled to enable millions of M-PESA’s customers across Africa connect more easily to PayPal’s international customer base.”
For 18 years, M-PESA has driven financial inclusion and bridged the digital divide. With M-PESA Kadogo, introduced in 2016, Safaricom waived fees for transactions of Kshs 100 and below, making digital payments more accessible. Now, through Ziidi MMF, customers can invest from as little as Kshs 100, promoting a culture of saving and financial wellness.
The partnership will tap into the emergence and growing popularity of the gig economy that has seen a rise among Africans accepting online jobs for clients across the world.
It equally marks a growing trend of interoperability between fintech providers with a goal of providing customers with a digital financial ecosystem that meets their needs by combining different capabilities.
PayPal is a leading global payment processor with more than 400 million active PayPal accounts operating across 200 markets, while M-PESA is Africa’s leading mobile money service connecting more than 50 million customers across Africa, 2 million businesses and micro traders, with more than $1.1 billion transacted daily.
Federal government has mandated banks and financial institutions to begin reporting monthly transactions exceeding N25 million for individuals and N100 million for firms to the tax authorities.
Under the new provisions of the Nigerian Tax Act, financial institutions are required to submit quarterly returns to the Federal Inland Revenue Service (FIRS).
The agency will be renamed to the Nigeria Revenue Service (NRS) from January 2026, when the new tax system will take effect.
“Every person who has an obligation to deduct and remit tax under this Act or any other Returns for tax legislation shall render monthly returns to the appropriate tax authority, as specified deduction of tax in the regulation issued for that purpose,” the Act reads.
“Without prejudice to section 142 of this Act, every bank, insurance company, stock-broking firm, or any other financial institution, shall prepare, with or without demand be delivered by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of new customers;Nigerian fashion trends
“…and existing customers in the case of (i) an individual, all transactions where the cumulative transactions in a month amount to N25,000,000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to N100,000,000 or more.”
Prior to the new tax law, banks were mandated to report deposits of N5 million — a measure intended to curb illicit financial flows, according to TheCable
Experts said the shift is part of efforts to tighten anti-money laundering reporting in the financial sector.
In 2023, Nigeria was listed on the grey list by the Financial Action Task Force (FATF) over deficiencies in tackling money laundering and terrorism financing.
Since then, the country has been making efforts to exit the grey list, which subjects it to increased monitoring by the FATF.
In November 2024, Hafsat Bakari, chief executive officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), said Nigeria has achieved upgrades in five key recommendations from the FATF.
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