The Central Bank of Liberia (CBL) recent instructions given to commercial banks in the country to import their own foreign cash has been seen as a means that would encourage money laundering, under declaration of funds and promote fraudulent financial transactions bankers and some Liberians have told this paper.
Recently the CBL held a meeting with all commercial banks in Liberia to inform them of its inability to transport cash from outside of Liberia for all commercial banks.
The CBL, as the regulatory entity of all financial institutions in the country, it monitors, regulates, supervises and effects changes in the interest of the public where necessary.
The Central Bank of Liberia (CBL) was established on October 18, 1999 by an Act of the National Legislature of the Republic of Liberia. It became functional in 2000 and succeeds the National Bank of Liberia (NBL).Since then, it has been playing its statutory functions.
These are funds that each financial institution brings into the country from their head offices or other affiliate financial institutions.
Since the establishment of the bank, it has been playing this role. It takes a special fee of about 0.5 percent for any cash brought in for any bank. The CBL effects these so as to enable it monitor the cash flow which a bank brings.
Multiple financial sources told this paper that it was worrisome for the CBL to ask them to bring into the country their own cash.
“This is the first time for us to see such thing to happen. They had a meeting with us sometime ago saying that they can no longer bring cash for us due to financial constrains. We should bring out own money in,” one top bank official who spoke on condition of anonymity said.
“To even say such means a lot. They open way for money laundering, under declaration of transactions and many more,” the same source said.
The Mission and Objectives of the Central Bank of Liberia is to maintain price stability and to ensure a sound banking and financial system, thereby contributing to sustainable economic development of the nation.
The Management of the Central Bank of Liberia seeks to achieve the objectives of its mission through:
Another source at a local Liberian bank added: “This is total mess. How do you monitor the amount or volume of cash that we bring into the country? If we bring in maybe US$5m, we can tell you we only came with US$2M. What will happen to the rest? You will not know. You as a bank will not know and we will be depriving you the needed money.”
“I think the reason or reasons for which CBL is to bring in all cash is for monitoring and regulatory purpose and avoid fraud and cheating. But if you as the head telling the banks you can no longer do your work, what do you expect from us? I think this is a bad financial decision that has been taken.”
To authenticate the story, this paper contacted the CBL. All officials contacted face to face, by phone, text and email, failed to respond. One J. Brown at the Bank contacted by phone, directed this paper to the communication department for comment. When our reporter visited the communication department, an official there declined to comment and referred us to the regulatory department for comment.
“Why should communication people tell you to come to us. They are to speak to these matters. So, you need to go back to them,” an official from the regulatory department told our reporter.
Another senior officer at the bank said; “this news is too big for me to speak to you about it. I think some truth in what you are saying. But the Governor is the only one who can speak. He told everyone this when he took office.”
When contacted Cyrus Badio, head of communication, by phone, text and email, he said he would get details from the Governor and if possible arrange a meeting with him. There has been no response after nearly a month now.
When the minister of Finance, Samuel Tweah was asked if he knew any such decision by the CBL, he said; “I am not aware of it. This is news to me. I will speak to the Governor on this matter as it is very grave if it is true.”
The principal objective of the CBL is to achieve and maintain price stability in the Liberian economy. To this end, it seeks to preserve the purchasing power of the national currency; promote internal and external equilibrium in the national economy; encourage the mobilization of domestic and foreign savings and their efficient allocation for productive economic activities; facilitate the emergence of financial and capital markets that are capable of responding to the needs of the national economy, and foster monetary, credit and financial conditions conducive to orderly, balance and sustain economic growth and development.