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Banks aiding money laundering, says CBN

The acting Governor of Central Bank of Nigeria, CBN, Dr. Sarah Alade, has accused banks of aiding money laundering, which has put their integrity, professional and ethical standards in doubt.

Speaking at the regional course on Combating Money Laundering and
other Financial Crimes organised by the West African Institute for
Financial and Economic Management, WAIFEM, in Abuja, yesterday, she said that the involvement of banks in money laundering were in several
respects.

According to her, “bank facilities are used knowingly and unknowingly to further the act of money laundering and in most cases to retain the
proceeds of such crime,” in an address read on her behalf by the
Director, Research of CBN, Mr. Charles Mordi.

She said: “Over 80 percent of the proceeds of money laundering are
associated with banks, one way or the other, all over the world.”
She explained that such activities included round tripping, financial
fraud, capital flight, fake cheques, fake currency minting, advanced fee
fraud and insiders abuse.
Those involved in those acts, she argued, cause distortions in the
financial markets through misallocation of investment, warning that
money laundering also has a dampening effect on foreign direct
investment, FDI, “when a country’s commercial and financial sector are
perceived to be associated with the incidence of organised crimes.”
According to the CBN boss, such practices have “deleterious
macroeconomic consequences such as inexplicable changes in money
demand, prudential risks to banks soundness, contamination effects of
legal financial transactions and increased volatility of international
capital flows and exchange rate due to unanticipated cross border
asset transfers.”
Alade lamented that a concentration of economic power by organised
crime spells doom and could all too easily infect the political terrain of
any nation.
The activities of money laundering and terrorists were described as
borderless and they “form part of a large network operating across
agencies and across borders.”
This, she said, has exerted more pressure on governments in the sub-
region to put in place adequate measures to combat this menace.
In view of the growing menace of money laundering, law enforcement,
she said, “appears a needle in a haystack effort” but this should neither
deter nor dampen the enthusiasm of law enforcers.
Speaking earlier at the event, the Director General of WAIFEM, Professor
Akpan Ekpo, described money laundering as a key threat to financial
stability in any economy, especially developing economies.
He urged regulatory authorities in the West Africa to close ranks

AmarSim Associations Development Consultants

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