The Nigerian Financial Intelligence Unit has again threatened to sanction any financial institution that will violate its directive on the local government funds.
In a statement on Wednesday, signed by its spokesperson, Ahmed Dikko, the agency said it maintained its position that the 1st June effective date of the guidelines to all financial institutions and public officials on the local government funds stands.
NFIU had on May 6 warned banks to ensure that state governments do not tamper with local government funds.
It said, “NFIU maintains its understanding of the 1999 constitution that no debit is allowed on any local government funds unless and until the funds are credited to and reach the bank accounts of a local government in any state of the federation.”
“The provision of the cumulative cash withdrawal not exceeding N500,000 per day is also firmly in place effective 1st June 2019.
“We observed isolated comments to the contrary in the past few days which in our assessment only amounted to wilful misinterpretation of the 1999 constitution and therefore, of no consequences to the operations of the entire financial system,” it said.
The agency repeated its threat to sanction any violations of its directive.
“The provision of the guidelines to the financial institutions was also on account of legitimate powers provided by the NFIU Act 2018 and any violations of the said guidelines will be sanctioned appropriately,” Mr Dikko said.
Most states currently operate joint accounts with their local governments. But in several cases, state governors high jacked the LG funds and give whatever pleases them to the local governments.