CBN unfreezes accounts of Bamboo, RiseVest, Trove and others after 2 years

The Central Bank of Nigeria (CBN) has instructed banks to lift the post-no-debit restriction on the bank accounts of 440 individuals and companies. This includes bank accounts belonging to fintech platforms like Bamboo, Risevest, and a sports betting company, Nairabet.  

The directive was conveyed through a circular signed by A.M. Barau, the Director of Banking Supervision at the apex bank, and was sent to all banks. The banks are now required to notify all the affected customers, both individuals and companies, about this decision.

Also among the list of companies include Yellow Card, Chaka and Trove. The post-no-debit restriction meant the platforms and individuals could receive money into the accounts but were not allowed to take money out of them.

The accounts of the investment platforms were frozen for about two years after the CBN accused them of engaging in illegal transactions. They were then suspended for an initial 180 days to give the apex bank time to conduct its investigation.

Although the CBN did not disclose the outcomes of its investigation or the reasons behind its decision to unfreeze the accounts, it has instructed the banks to inform the customers and the companies whose accounts have been unfrozen of the decision.

“You are hereby directed to vacate the Post-No-Debit restriction placed on the accounts of the under-listed bank customers at our instance. You are also required to inform the concerned customers of the vacation accordingly.”

CBN Circular

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Why CBN froze the accounts

On August 17 2021, a federal high court in Abuja ordered the freezing of the accounts of six online investment companies following a request by the Central Bank of Nigeria. The accounts were to be frozen for an initial 180 days to allow the CBN to investigate the companies which it accused of carrying out illicit forex transactions.

The motion filed before the court by the apex bank reads; “the investigation being carried out concerns what has been discovered to be serious infractions by the defendants/respondents in connection with some foreign exchange transactions and non-documentation by the defendants/respondents in violation of the extant laws and regulations, particularly the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the Central Bank of Nigeria foreign exchange manual.”

The firms include Bamboo Systems Technology Limited, Rise Vest Technologies Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited. They offer Nigerians access to stocks, bonds and other securities in both local and international markets.

The motion follows after the Securities and Exchange Commission (SEC) had also accused the investment platforms of carrying out illegal investment transactions and services for its customers.

“More specifically, there is a grave allegation that the defendants/respondents are engaged in illegal foreign exchange transactions, accessing/procuring of foreign exchange via their banks from the Nigerian foreign exchange market via several bureaux de change, international money transfer operators and have transferred cash deposit of more than S10,000.00 (Ten thousand dollars) to various accounts overseas…“

Although later frozen permanently, a federal high court in Abuja in September 2021 ordered a temporary unfreezing of accounts belonging to fintech companies; Bamboo Systems Technology Limited and Bamboo Systems Tech. Ltd to allow it to pay salaries to their staff as well as to fulfil their rent obligations.

The Federal High Court, Abuja division had earlier this year also ordered the apex bank to freeze 194 bank accounts belonging to businesses and Bureaux de Change so that it could undertake investigations into any suspicious activity.

Read also: CBN declares government’s equity in a bank shall not exceed 10% in five years