Bank Employees' Assets Declaration and the War Against Corruption

Recently, the Chairman of the Economic and Financial Crimes Commission (EFCC), Abdurasheed Bawa, made a declaration that the Bank Employees Assets Declaration Act of 1986 would be resuscitated to block loopholes created by some bankers as the country looks forward to sanitise the financial system.

Bawa made this disclosure shortly after a closed door meeting with President Muhammadu Buhari on 1 April 2021.

According to Bawa, the decision was taken due to the role bankers are expected to play in the fight against corruption.

Section 1 of the 1986 Bank Employees Declaration of Assets Act makes it mandatory for every employee of the bank to make full disclosure of assets upon employment on an annual basis. The law under Section 7 Sub-Section 1 stipulates that it shall be an offence for an employee of a bank to own assets in excess of their legitimate and probable income.

After the deadline as stipulated by the EFCC Chairman, there are consequences that will arise as a result of non-declaration of assets by bank employees. For instance, there is a spelt out penalty of 10 years imprisonment upon conviction as well as forfeiture of assets beyond and above legitimate income and probable earnings of such bank employees.

This piece of legislation has been in existence since 1986 under the military, effective in September of that year. For a long time, this aspect of the country’s legislation was rendered ineffective by those who ordinarily should implement it. But with the appointment of Bawa, the revival of this Act has become a part of the tool in the current fight against illicit financial flows and money laundering.

Bankers have always been aware of this legislation but the level of compliance has not been encouraging. In the 80s, bankers were handed such forms which they completed and submitted. But as it’s always the case in most systems, the implementation of that provision of the law was more or less abandoned, and it was no longer considered as a fundamental part of the banking regulation. Consequently, there were failed banks and the government had to constitute failed bank tribunal.

Stakeholders blamed the failure of authorities including the CBN, Chartered Institute of Bankers of Nigeria (CIBN), and Bankers Committee for certain abnormalities in the industry. According to them, these regulators rely on the banks they are supposed to supervise, to supply them information. For instance, they argue that the failed banks episode happened barely some months after the regulators had given those banks clean bills of health. This suggests that the information supplied by the banks may have been doctored. In addition, some banks declared huge profits, and in no time, went under.

Nigeria has been battling with cases of corruption and money laundering, with bankers and bank officials accused of being accomplices. Some monies have remained redundant in many accounts due to death of the owners of the accounts which some bank officials convert to theirs while leaving families of the account owners in penury.

This is in spite of the fact that the banking sector is no stranger to self-regulation, given its tempting, delicate and fragile operating system. As a matter of fact, the CIBN Act of 2007 has been regulating the banking system. It has a code of conduct to which bankers agreed with the CBN. There is a disciplinary tribunal that has the power of the High Court which ensures that reported infractions, unethical conduct, and indiscipline are brought before the tribunal, and sanctions recommended for formal prosecution. But one of the challenges has been weak reporting system by bankers, leading to the inability of CIBN to take appropriate actions.

The spirit behind the Act of 1986 is to make clear, the financial standing of bank employees at the time of employment, and after years of service, in a bid to ascertain that their legitimate earnings are commensurate with their current lifestyles. This is coming on the heels of allegations that some bankers are direct beneficiaries of fraudulent transactions that are carried out in the bank.

What is common knowledge is the asset declaration by public officers including civil servants, politically exposed persons and those who work in the Ministries, Departments and Agencies (MDAs). They are required to declare their assets every four years.

For political officeholders, upon their election or appointment before they assume office, they are supposed to declare their assets at the point of entry and also at the point of exit. This declaration is done on oath. In other words, there is execution and attestation before a High Court or some other superior officer of the law. The Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), among others, are already covered by the Code of Conduct Act with regard to the declaration of their assets.

As it stands, financial experts believe that the impression created by the directive to bankers to comply with the pre-existing piece of legislation amounts to stigmatisation. In other words, there is the belief that the revisiting of the Act of 1986 encourages isolation which could cause apprehension in the industry. There are concerns that the Act may cause enrollment into the banking profession to further go down as a result of possible stigmatisation.

However, some concerned stakeholders caution against the drama about stigmatisation, arguing that a lot of bankers, from the highest cadre to the lowest level, are living above their means. According to them, an average banker even from their early point of calling, cuts corners by conniving with customers that want to beat the system. They insist that for every major corruption, there is a banker that facilitates the transaction. For instance, they allege that bankers assist customers to spread and deposit money in different tranches to various bank branches so that they won’t raise red flag by going beyond the regulatory limit of the Nigerian Financial Intelligence Unit (NFIU).

It is laudable that the EFCC is trying to use the Act for good reasons. But the worry is that the banks essentially are not owned by government per ce, though the government has shares in them. Banks are however largely private-driven.

More importantly, there are existing laws that can check illicit enrichment. Article 20 of the UN Convention Against Corruption is explicit on this. Section 7 of the EFCC Act empowers EFCC to investigate persons whose lifestyles are not commensurate with their means of income. It is believed in certain quarters that the assets of this country have been plundered the most by politically persons, many of whom remain untouchable. As such, EFCC has been accused of not being fair and even-handed in its mandate on tackling public sector corruption including false declaration.

The spirit behind the 1986 Act is the acknowledgement that bankers have fiduciary responsibility which is sacrosanct. If by 1986 we could have an Act, then it means it is a recognition of that responsibility which bankers have. Banking is very central to everything that we do, which explains why bankers are required by law to declare their assets on a yearly basis — more regularly than politically exposed persons and other public servants.

The banking profession wears a special toga, as it touches on virtually every facet of our national life. If the banking sector is sanitised, it will have a ripple effect on all other sectors of the economy. All these measures are taken to strengthen the fight against corruption, and not to stigmatise the banking profession or portray it as the scapegoat within the system. Besides, the banking career is not a roguish profession. Some bankers are in the forefront of exposing some of the mega corruption issues that we have seen the EFCC making headway.

Part of the essence of this law by the EFCC is to ensure that the country is free from financial crimes, and also to block the loopholes being exploited by unscrupulous players in the sector to undermine the national economy, through money laundering and illicit financial flows.

However, EFCC should not appear as if it is practising implementation by isolation. The fight against financial crimes should be holistic. There are provisions of the law for every category of professionals in the country. The emphasis should be the extent these laws have been activated in the fight against corruption. Financial infraction is a national problem, and so, it requires a national architecture to deal with the challenge.

While it is hoped that the Act of 1986 is a sincere attempt at sanitising the system, there should be a platform created to report thresholds of deposits on a daily basis, and the regulators should be able to access it to know the declarations made. This makes for easy reference to what has been declared as legitimate income to check those living above their means.

The Act may not be for corruption purposes or looting alone. It could be equally useful to track tax payments, source of money and other considerations including the adoption of Unexplained Wealth Order and whistle-blowing as canvassed in some quarters. When these measures come into force, any person including private individuals who are not required by law to declare their assets, will be prime targets. Once anyone is seen to have acquired wealth or shown sign of ostentatious living that is not necessarily explained from their legitimate earnings, they can be reported to the appropriate quarters.

To achieve this, the EFCC should involve experts to help in the review of asset declarations to see whether they are reckless or determine evidence of deliberate false declaration, and propose what action can be taken.

Some people may “under-declare” while others may “over-declare” depending on what they do. EFCC for now might not have the required resources, capacity, and manpower to collect and review all the forms declared by bankers and other individuals, as well as detect lapses that will lead to further investigation.

This shortcoming obviously has consequences. Many politically exposed persons have been made to declare assets at the time they were assuming office. But afterwards, nothing is heard, as there seems to be no strong connection between EFCC and the Code of Conduct Bureau. This gap can be bridged by activating the Unexplained Wealth Order.

Whistle-blowers can be individuals within the community or organisations, among others. The information provided by whistle-blowers can be put into proper use by the EFCC or any other agency of government involved in dealing with money laundering or issues relating to financial crimes. But it will be counterproductive to use the investigation as an object of witch-hunt against perceived opponents or those considered to be of “special interests”.

Moses Amadi