Banks have begun the publication of names, account number and Bank Verification Number (BVN) of customers for defaulting in foreign exchange (FX) transactions as regards the directive of Central Bank of Nigeria (CBN) last month for banks to publish on their websites the names, account number and BVN of customers who engaged in fraudulent practices to obtain forex from banks.
Stakeholders have therefore reacted to the CBN FX policy stating that banks are meant to oblige to the regulating body authority.
Barrister Nosa Tokunbor said, “Every Bank, including the Central Bank have regulations and policies. If it is within the ambit of the law to so do, they are at liberty, provided they have given the public sufficient notice. Anybody who feels that it infringes on their personal rights as to whether they should not be amenable to the law, they can seek legal redress.
“But I think that issues of physical policies and what have you, they usually give notices and sufficient time to bring before the public.”
While reacting to question on the legal effect of the Banks action by affected customers, he said, “There cannot be increase in court cases as such because, firstly, there is apathy to seeking redress in court. Most of Nigerians are not too quick to resort to seek redress in court.
“Even if one or few of them do, in the face of the customers that are affected, it will not resort into much. However, seeking redress in court is still far better than resorting into self-help which does not come in at this point.”
A lawyer who warned of increasing legal cases as regards banks publishing FX defaulters said, “Despite CBN’s directive to banks to publish names of FX defaulters, customers have the right to sue banks for disclosing their details online. When that gets to court, it is the bank’s right to establish if the customer actually defaulted.”
An Economist and Private sector Advocate, Dr. Yusuf Muda said that, “If a bank wrongly publishes customers name, there is a risk of liability. Banks must be very sure of their facts before publishing any name.
“You could remember in the past when banks published names of loan defaulters that created unrest in the banking sector. Banks need to exercise caution and investigate properly before publishing any name.”
He said the policy is part of confusion created in the FX market, stating that “I do not see that solving the problem.”
An economist and senior Lecturer, Lagos Business School, Dr. Adi Bongo, said “CBN is the apex regulating body of the bank. So, if CBN directs banks to publish names of FX defaulters, it is their responsibility to oblige.
“I’m not expecting legal cases arising and moreover, the CBN gave directive on disbursement of FX and align a plenty.”
A Developmental Analyst, Abraham Kuti explained that banks get their funds from customers’ deposits generally, adding that the directive aims to create fear among FX dealers seeking for Personal Travel Allowance (PTA) and Basic Transport Allowance (BTA).
Kuti said, “In as much as the CBN being a government agency regulating financial activities and banks operations, it shouldn’t create policies that make banks look less commercial. The policy will defeat the purpose of bank as a business organisation and make it lose customers.
“Once a customer deposits money in a bank, it still belongs to the customer except it is proven otherwise that such money was acquired illegally, which is another different issue entirely.
“It is embarrassing that a customer will make money, deposit it in a bank and still be embarrassed when he chooses to hold the value of his money in another currency, especially Dollar.
“The customer that worked hard for his money shouldn’t be the one to pay the price for economic challenges facing his country.
“The CBN might choose to place limits on use of foreign currencies for a healthy naira or economy but customers shouldn’t suffer on their own money.
“The new idea of publishing FX defaulters’ names and details might further increase the use of alternative means of FX as customers wouldn’t want to be embarrassed on their own money.
“Two customer’s names published on UBA website were published for not returning the PTA. The question is who owns the money- is it the Bank, Government or the Customer?
“The idea of a Bank is to keep or hold a person’s money till time of use, whereas the government’s duty through the CBN is to prevent banks from exploiting citizens. Today the reverse is the case.”