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- The money left over in the accounts of nine banks for social program interventions that were never used fell to N399.34 billion
- This shows that N132.05 billion was taken out of the money in total from January and June 2024
- Experts voiced worry about the state of affairs and pushed the CBN to explain the money depletion
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
The amount of unutilized social program intervention money that remained in the coffers of nine Deposit Money Banks dropped to N399.34 billion. This is despite the fact that the Central Bank of Nigeria ended the program a year ago.
Source: UGC
The sum as of December 31, 2023, was N531.4bn. This indicates that N132.05 billion was taken out of the money in total between January and June 2024, with no justification given in the bank's financial accounts for these activities.
The fund management and the causes for such large outflows may come under closer examination and scrutiny as a result of this lack of transparency surrounding the withdrawals.
According to The PUNCH's recent research, the intervention funds were lowered by 24.85%, or N132.05 billion, to N399.34 billion from N531.4 billion in just six months, and were still with the banks a year later.
A study of eight bank’s half-year financial records showed that they still retained monies received from the central bank intended for release to beneficiaries.
Wema Bank, Access Bank Plc, Sterling Bank, Guaranty Trust Bank, First City Monument Bank, Zenith Bank, United Bank of Africa, and Stanbic IBTC Bank are the banks. Fidelity Bank has not yet uploaded its 2024 second-quarter results.
A more thorough analysis revealed that Zenith Bank continues to hold the largest amount of intervention funds, which now total N154.81 billion, down from N157.81 billion in December 2023—a N3 billion decrease.
Access Bank closely trailed suit, increasing by N58.37 billion to N152.99 billion from N94.62 billion in December 2023.
With a total intervention of N37.82 billion from N80.34 billion deposited with the banks as of December 2023, Sterling Bank comes in third place on the list, followed by United Bank of Africa Bank with N20.99 billion.
The amount of intervention money with Guaranty Trust Bank was decreased to N11.58 billion from N40.81 billion. Other banks include Wema Bank with N1.26 billion, FCMB with N13.17 billion, and Stanbic IBTC with N6.71 billion.
How experts react
Muda Yusuf, the director and chief executive officer of the Center for the Promotion of Private Enterprise, expressed concern over the situation and urged the CBN to provide an explanation for the fund depletion.
He also offered theories as to why the banks would have retained the intervention cash.
Speaking in an interview with our correspondent, the financial expert said,
“Some of those funds were kept with the banks before this administration and I would imagine that no new funds had gone into the pool of funds that existed before this administration came in but I also know that the CBN governor did say that further interventions will be done through the development banks.“So it is possible that those funds are being managed in conjunction with the Bank of Industry. The BOI is not a deposit money bank, so they don’t keep funds, but there is a way they partner, and it is the banks that now make the disbursement.“It is also possible the withdrawn funds were commitments to other applicants. For instance, if the CBN has signed an agreement with a borrower to disburse N1bn, then a new administration stopped the funds; it would be unfair to stop it because there is a new administration. So, existing transactions could have been permitted.“But I think the CBN still has to explain what is happening. It is important to clarify why those banks still have the funds,” he stressed.Banks send loan updates to customers after CBN's order
Legit.ng reported that Nigerian deposit money institutions have stopped taking new loan applications under the Central Bank of Nigeria's (CBN) development finance intervention funds.
Access Bank notified clients of this change on Monday, January 8, 2024. Other Nigerian banks have also begun to inform their customers using various means.
This comes after the CBN formally announced in December 2023 that it would no longer accept new loan applications under its current development finance intervention funds program.
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Source: Legit.ng
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