The Central Bank of Nigeria (CBN) has spoken on the scam in
which six of its officials and 16 others from some commercial banks are
involved.
The suspects, the Economic and Financial Crimes Commission
(EFCC) alleged, stole and recirculated, defaced and mutilated currencies
amounting to N8b.
Instead of destroying defaced local currency, the officials
substituted it with newspapers cut into the size of naira notes, the EFCC said.
The fraud has been partly to blame for the failure of monetary policy to check
inflationary pressure for years, according to the agency.
The suspects are: Patience Okoro Eye (Abuja), Afolabi Olufemi
(Lagos), Kolawole Babalola (Ibadan), Olaniran Muniru Adeola (Ibadan), Fatai
Yusuf Adekunle (Head, Security, CBN, (Ibadan) and Ilori Adekunle Sunday
(Akure).
The remaining 16 suspects are from various commercial banks.
They were found to have conspired with the CBN executives to swing the heist,
the EFCC said.
CBN’s Director, Corporate Communications, Ibrahim Mu’azu,
yesterday retraced the events that led the management of the apex bank to hand
over the suspects to the EFCC for prosecution.
He said: “As soon as the Bank’s internal investigations
concluded beyond reasonable doubt that some wrong doing had occurred, the
affected members of staff who are middle-level officers were, depending on
gravity of offence, either summarily dismissed or immediately placed on
indefinite suspension on 21 October 2014, and all handed over to the EFCC for
further investigation and prosecution. The CBN has also conducted a nationwide
audit of all 37 branches of the Bank and found that this was an isolated scheme
at Ibadan Branch. The Bank will continue to collaborate with the EFCC to ensure
that affected CBN staff, as well as their accomplices in some commercial banks,
are brought to justice.”
Mu’azu said the scam was unearthed during a routine internal
audit of the bank’s cash destruction activities in September 2014. He said the
CBN Briquetting Panel comprising Senior Bank Staff from various branches,
noticed some anomalies at the Ibadan Branch, and immediately reported this to
the Bank’s management.
He said on further investigation ordered by the CBN
Governor, it was discovered that a systematic scheme, which had been on for
several years, was being run in which mutilated higher denomination notes
originally meant for destruction were swapped with lower denomination
currencies. This practice known as interleafing, basically labels a box with a
higher value than its true content.
Mu’azu said as soon as the bank’s internal investigations
concluded beyond reasonable doubt that some wrongdoing had occurred, the
affected members of staff, who are middle-level officers, were, depending on
gravity of offence, either summarily dismissed or immediately placed on
indefinite suspension on 21 October 2014. They were all handed over to the EFCC
for further investigation and prosecution.
The CBN has also conducted a nationwide audit of all its 37
branches and found that this was an isolated scheme at Ibadan Branch. Mu’azu
said the bank will continue to collaborate with the EFCC to ensure that the
affected CBN staff as well as their accomplices in some commercial banks are
brought to justice.
An economist, Henry Boyo, said he was not surprised when he
heard about the scam, alleging that there are even bigger fraud going on within
the CBN which the public take for granted. “It did not surprise me at all. It
was expected. What is clear is that the institution of the CBN is fraught with
fraud. Whether it is the intervention fund or monetary policy strategy, it is
the more you look, the less you see,” he said.
Boyo said the practice whereby the CBN carries out regular
mopping up of excess liquidity from the system is in itself questionable. He
said over N6 trillion is mopped up from the system annually, and that the one
for the first quarter has already been conducted, with N1.5 trillion taken off
the system. Commercial banks were paid 10 to 15 per cent interest, which came
to about N600 billion profit, he said.
Boyo alleged that the intervention fund running into
billions of naira also needed to be examined just like the Polymer note scam.
But another economist, Brown Okorie, said the mopping up of
excess liquidity in the system is the statutory function of the CBN, used to
bring down inflation and achieve exchange rate stability.
He pointed out that the apex bank had several tools which it
could use to control the inflation rate, but emphasised that the best option at
the moment would be to reduce the excess liquidity in the system. “The CBN will
look at the indicators and decide what tools to use to control the inflation
rate, which will all be aimed at reducing excess liquidity in the system,”
Okorie said.
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