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Kidnapping epidemic: Banks enabling rapid growth of abduction industry – Experts
Given that some ransoms are deposited into bank accounts, security experts have charged commercial banks with contributing to the nation's kidnapping epidemic.
With backgrounds in law enforcement, intelligence, and the military, the experts and analysts emphasized that financial institutions that accepted ransom payments had made kidnappings possible. They gave security and President Bola Tinubu advice on how to stop the outbreak.
The Federal Capital Territory, Abuja, as well as the states of Lagos, Ogun, Nasarawa, and Delta have all seen an increase in abductions recently. Previously, these incidents were limited to the North-West of the country.
A number of abductions have been reported in the Federal Capital Territory (FCT) in recent weeks, involving the kidnapping of over twenty-five people by alleged bandits who sought enormous ransoms to free them.
Speaking about the involvement of banks in the expansion of the kidnapping industry, Adamu Kabiru, Managing Director of Beacon Consulting, confirmed that banks were involved in ransom payments.
The security and risk consultant firmly declared, in an interview with TVC, that he knew of two instances of kidnappings for ransom involving two banks.
"I will shock you today to tell you that the money was collected through our banking system in almost all of the cases where my company was involved," the speaker stated, adding that he meant it when he said it. Cash was collected and given to these guys (kidnappers) in almost all cases only very infrequently.
"They give account numbers; how daring and courageous of them." There are two guilty banks; I will not name them here as this is a public forum.
"However, I will be pleased to provide it to them if they are unaware, should the security agencies show interest and pay attention to this."
He pleaded with the financial authorities to fulfill their obligations by making sure banks efficiently apply the "Know Your Customer" policy.
"Therefore, even our financial regulators have a responsibility to ensure that banks play the Know Your Customers element very well," stated Adamu.
Get to Know Your Clients
It will be very simple, for example, to target those account numbers and, of course, apprehend the account holder if they play that KYC element extremely well. However, that hasn't been completed as of yet.
The former intelligence officer pointed out that cash payments over N5 million and N10 million, respectively, cannot be made or received by individuals or corporate entities under the Money Laundering Prohibition and Prevention Act of 2022.
The Nigeria Financial Intelligence Unit must receive reports on suspicious transactions from all financial institutions and certain non-financial institutions within 24 hours, according to the law.
Adamu told the security managers that they needed to "wake up from their slumbers" and insisted that they were technically capable of tracking the abductors.
He clarified that the victims' fear of being killed by their kidnappers was the reason why rescue efforts were hindered.
He claimed that the country did not have the tactical capacity to free the hostages, but that this could be done with competent personnel and solid intelligence to conduct complex rescue missions.
Adamu emphasized that certain bank employees had to be involved in order for the payment and withdrawal of the ransom money to be made in an interview with on Sunday.
According to him, the "vulnerabilities that exist in our banking system" and a variety of other businesses, such as suppliers of weapons and ammunition, informants, and other services, "fed" the industry.
"One can definitively state that there is a kidnapping-for-ransom industry in Nigeria and that it is thriving," he continued. A value chain comprising businesses such as informants, arms and ammunition suppliers, drug and essential supply companies, etc., feeds this industry.
It also covers people who help them gather and clean up the proceeds. It is a matter of finances and security. The vulnerabilities in our banking system and socioeconomic problems are some of the factors that contribute to abductions.
"Money laundering, financing of illegal activities, and terrorism continue to be potential threats to Nigeria's financial sector. This is covered in detail in the most recent GIABA assessment of Nigeria's adherence to international standards and protocols regarding the financing of terrorism and money laundering.
“As an example, banks still have a comfortable number of their staff members supplied by third-party contracts and the issue of KYC,” he submitted.
‘Kidnapping now business’
In support of Adamu's claims, retired Commissioner of Police Emmanuel Ojukwu hinted that banks may have been involved in the kidnapping operations.
Ojukwu declared, "Ransom payment through crowdsourcing has been overhyped. It's not a nice fix; in fact, it kind of makes the crime more acceptable. Given how and where these funds are pooled, the banks are most likely involved in all of this.
"Bank customers have been having trouble getting cash for their transactions; why are millions going to kidnappers?"
"I guess the NFIU and banks need to start investigating the whereabouts and methods of the fund trafficking. Such funds can be tracked thanks to technology.
As of Sunday morning, it was not possible to get in touch with Rasheed Bolarinwa, the chairman of the Association of Corporate Affairs Managers of Banks, for comment on the accusations made against the banks.
The ransoms purportedly paid into some bank accounts, according to a top bank official who spoke on the condition of anonymity because he lacked the authority to do so, may have instead been paid into tier-1 accounts with insufficient Know-Your-Customer safeguards.
He declared, "Banks were permitted to open certain accounts with minimal KYC requirements during the tenure of former CBN governor Lamido Sanusi. It would be possible to carry out such horrible deeds with these tier-1 accounts. I'm not sure if that's feasible, though, as there is a limit to the amount that can enter such accounts. Only current or corporate accounts can handle huge amounts, often paid as ransoms. But the CBN is already handling these issues by asking bank customers to link their BVN to NIN before April ending.”
But security analyst Chidi Omeje bemoaned the fact that kidnappings had developed into a lucrative business that brought in billions of dollars in a few short months.
It's a massive industry, one of the largest in this nation, he declared. Upon reviewing the data, we will find that those individuals generate billions in revenue each month. Thus, it's a massive industry, and an awful one at that.
"I think it's unfortunate that we've reached a point where such a repugnant business is now growing to be such a large industry."
Because "the majority of the ransoms are not paid with cash," he contended, banks have contributed to the expansion of the kidnapping industry.
Omeje stated, "Obviously, banks are highly complicit because the majority of ransom payments are made through bank transfers and payments, rather than cash.
"And remember, there was a period when we were told to conduct these NIN and BVN operations and were informed about how they would be used to apprehend criminals." Do you not see that nothing is taking place?
Offices like the DSS, NSA, and EFCC are useful in this situation. Many of the agencies that ought to be involved are not, but nothing is. Tell me again, is the NCC unable to track phone numbers? It is extremely disheartening that banks are complicit.
Furthermore concurring was Mike Ejiofor, a former assistant director in the Department of State Services.
Abductions have turned into a business in Nigeria, according to Mike Ejiofor, a former assistant director in the Department of State Services. He also mentioned that banks could work with agencies to track down the kidnappers by using marked money.
"I recall that money was marked after the kidnapping of (former CBN Governor Godwin) Emefiele's wife, which resulted in arrests. The issue is that the majority of ransom payers are tired of the police and security personnel. Additionally, arrests may result if they work together to obtain some of the marked money.
Since the Central Bank does not give them the money, it is possible that the money is not from the Central Bank.
While urging the enforcement of pertinent banking laws and regulations to keep an eye on and track the actions of banks involved in accepting ransoms, Dickson Osajie, for his part, chastised the banks for failing to fulfill their obligations.
Tight supervision
Nigerian banks need to acknowledge their obligations, stated the security expert. The CBN managed to identify its backers during the ENDSARS revolution. Why haven't we been able to identify the sponsors of Boko Haram, despite the group's almost 13-year-long destruction of the nation?
"The banking industry isn't taking adequate action. Since using internet banking eliminates the need to visit physical banks, these kidnappers are profiting from it. There is a problem with your KYC. Just go to any location and open an account.
"These online banking services deserve more consideration. If we don't take action, that trend will continue to harm us. Banks must make sure that their clients abide by all guidelines in order to prevent crimi