BABA IJEBU, OTHERS MAY STILL PAY WINNINGS, SALARIES FROM FROZEN ACCOUNT

...CBN  now allows banned betting and gaming companies to access their accounts for limited purposes

Kensington

The Central Bank of Nigeria has given some commercial banks instructions to allow betting and gaming companies suspended earlier in the month the approval to honour withdrawals from their accounts to pay for winnings, salaries and other overhead expenses.  

Recall on September 5th the central bank instructed banks to post a no debit on account of 38 companies some of which included betting and gaming companies for violating its foreign exchange regulations thereby freezing their accounts. 

In the prior memo instructing the banks to freeze the accounts the CBN did not mention that it was for forex infractions. However, this memo now confirmed what the ban was for.

However, banks pleaded with the apex banks to allow the betting and gaming companies to meet urgent operational requirements.

Excerpt of the memo to the commercial banks reads:

"In one of the memos  held by the Governor of the Central Bank of Nigeria (CBN) with your bank and stakeholders of seven (7) betting and gaming companies on September 11 2020, you pleaded for clemency processing some transactions in violation of the extant foreign exchange regulations. Similarly, the betting and gaming companies intreated the Governor to allow them discharge operational expenses.” 

The CBN therefore approved that cheque payments and transfers be made out of the accounts provided it was towards winnings, salaries and other overhead expenses. 

On quote: “Consequently, the Management of CBN has magnanimously granted your bank the approval to honour instruments presented by the companies for payment of winnings, salaries and other overhead expenses.” 

 Despite the partial lifting on the ban, the CBN still maintained a “Post No Debit restriction on the account and ordered that “no other transactions should be processed for any of the companies during the period of the waiver” effectively restricting the owners of the companies from accessing to pay capital obligations.