The Central Bank of Nigeria (CBN) has reportedly frozen bank accounts of four fintech firms for up to 180 days after a federal court in Abuja approved an “ex parte motion”. The ex parte motion, which is a form of temporary suspension, was granted after a Nigerian chief, Micheal Kaase Aondoakaa, filed the motion on behalf of CBN Governor Godwin Emefiele.
Accounts locked to allow further investigation
According to a report, this temporary ban on bank accounts will allow the CBN to investigate further into the activities of the four companies. In the meantime, several Nigerian media outlets have identified the affected companies as Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited.
The report also indicated that the CBN’s decision to file the ex parte application came after the results of the central bank’s preliminary investigation revealed that the four firms were engaged in unlicensed wealth management businesses. In addition, the central bank accuses fintech firms of “using forex from the Nigerian foreign exchange market to buy foreign bonds / stocks, contrary to the CBN circular of July 1, 2015”.
In recent years, Nigeria has struggled with foreign exchange shortages, which in turn led to a sustained devaluation of the naira. In response to the decline in the naira, the CBN has put restrictions or restrictions on the amount of foreign currency that ordinary Nigerians can withdraw from banks.
Fintech firms undeterred
CBN has also blocked cryptocurrency firms from accessing the country’s banking system, while the sale of forex to currency exchange operators recently ceased. Despite such CBN interventions, however, the naira continues to lose ground against major currencies. At the time of writing, the parallel market exchange rate of the naira to the US dollar is 1: 515 while the official exchange rate is unchanged at 1: 411.
Meanwhile, in the CBN’s case against the fintech firms, a Nigerian prosecutor argued before a federal court judge that foreign exchange deals with the four firms “weakened the naira against the US dollar, hence the need to hold 15 of their accounts for about 180 days. “
However, another report quotes the CEO of Rise Vest Technologies Limited reassuring User that the “trading activities of his company will continue as usual and that the problem will be clarified with the supervisory authorities”. Bamboo systems are similar said its users on Twitter that its “legal and government teams are dealing with it”.
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