The Nigerian Financial Intelligence Unit (NFIU) has reiterated its warning to banks not to allow state governors to mismanage allocations meant for local government areas.
Speaking with newsmen on Saturday, Spokesperson for the NFIU, Mallam Sani Tukur, said banks and other financial institutions should be prepared for local and international sanctions if found guilty of breaching any of the new guidelines for the operations of the states/local government joint accounts. which take effect on June 1.
Tukur stated, “Any bank that connives with governors or local government chairmen to breach the directives will face the necessary sanctions.
“For instance, if you (as a bank) deliberately allows the withdrawal of let’s say N100m, you may be sanctioned to the tune of that amount; you may be made to forfeit that same amount of money to the (Federal) government.
“Or, if there is a threat to the international financial system on account of a transaction, the international financial system can sanction the bank concerned instead of Nigeria as a whole.”
The NFIU spokesmen, however, said there are no specific punishments in place for erring governors.
“We deal with banks and other financial institutions. The guidelines we released is generally for banks not to allow such to happen,” he said.
“If they connive with governors to allow that to happen, they will be sanctioned. If the governors also withdraw that money, we will get the records and if it is discovered that a transaction was used for money laundering or other sundry activities, which contravene the guidelines, intelligence can be shared and used by other relevant security agencies for necessary action.”
Insisting that the NFIU will not abolish of the states/local government joint accounts, he said, “That account has a constitutional backing, what we are pushing for is that the account should not be used by state governors for withdrawals and payments; it should be used for the distribution of funds to local government councils.
“The account should not be used by governors to pay contractors. What they are supposed to use that account for is the distribution of funds directly to local governments.
“State governments are even supposed to give 10 per cent of their allocations for distribution to local governments that is the requirement but they are not doing that.”