Coast Clear: Accounts of banks with CBN can be garnisheed without prior consent of the Attorney-General.


The Central Bank of Nigeria (CBN) was established under the Central Bank of Nigeria Act, 2007 (CBN Act). The principal objects of the CBN are to ensure monetary and price stability; issue legal tender currency in Nigeria; maintain external reserves to safeguard the international value of the legal tender currency; promote a sound financial system in Nigeria; and act as banker and provide economic and financial advice to the Federal Government. The Bank acts as banker to States and Local Governments and to funds, institutions or corporations established by Federal, State and Local Governments. (Sections 2 and 39 of the CBN Act).

The CBN is the key regulator of the banking sector in Nigeria and maintains the position of the bankers’ bank – meaning that it serves as a bank to other banks in Nigeria and may also provide banking services to banks outside Nigeria. (Section 41 of the CBN Act). By Section 15 of the Banks and other Financial Institutions Act, 1991 (BOFIA), every bank is mandated to maintain cash reserves and special deposits with the CBN and hold specified liquid assets or stabilization securities, as the case may be, in a sum as may be prescribed by the CBN from time to time. Section 16 of BOFIA also directs every bank to maintain a reserve fund, out of its net profits for each year, with the CBN. (See also Section 42 of the CBN Act).

Usually, where money judgment of court is entered in favour of a particular person (judgment creditor) against a bank in Nigeria, one option open to the person towards enforcing the money judgment is to commence a garnishee proceeding* in order to attach any money standing to the credit of the bank (judgment debtor) with CBN. Thus, in the same way the money belonging to persons (other than banks) can be garnisheed, monies belonging to banks (as judgment debtors) can also be attached or garnisheed, with CBN serving as the garnishee.

Similarly, where the Government (at different levels) or any of its agencies is a judgment debtor, garnishee proceedings can be commenced to attach monies in its account with the CBN. Monies belonging to the Federal, State and Local Governments and their different agencies are, by law, public funds.

The implication of this is that public funds cannot be attached by way of garnishee proceedings without obtaining the prior consent of the Attorney General of the Federation or of the State. That is the import of the provisions of Section 84(1)(2) and (3) of the Sheriffs and Civil Process Act (SCPA). The rationale behind this is simply to protect public funds. Where the consent is not obtained, any garnishee order made against public funds is taken to be an order made without jurisdiction and is liable to be set aside. Relying on the above provisions of Section 84(1)(2) and (3) of the (SCPA), the CBN always seek to challenge any garnishee order made against public funds in its custody.

Now, given that the CBN is also a bank to other banks, whenever a garnishee proceeding is commenced against a bank in order to attach the bank’s funds with CBN, the CBN will step in to challenge the proceeding if no prior consent of the Attorney General is obtained. In other words, the CBN, being a public officer (as defined by law) also treats the money of banks in its custody as public funds. A case in hand is discussed below. We shall see how the Court of Appeal disapproved of such argument by CBN, describing it as pure absurdity.

CBN v. Umar [2019] 10 NWLR (Pt. 1679) 75

In this case, Fidelity Bank Plc was a Judgment Debtor to the tune of over N29 Million. The Judgment Creditor, Alhaji Kolomi Umar, sought to attach the funds belonging to Fidelity Bank by commencing a garnishee proceeding, with CBN as Garnishee. Alhaji Umar obtained a garnishee order nisi (the initial order) against CBN, attaching the Bank’s money in its custody. Upon being served with the order, requiring it to show cause why the Order nisi should not be made absolute (in the usual procedure), CBN raised a preliminary objection, contending that the Order nisi was made without jurisdiction as the prior consent of the Attorney General was not obtained. The trial Court dismissed the contention as baseless. The CBN appealed to the Court of Appeal which also dismissed the appeal.

Williams-Dawodu, JCA, in delivering the Judgment of the Court of Appeal, did a fantastic job in explaining the absurdity in the reasoning of CBN. His Lordship clarified that in the interpretation and application of Section 84 of SCPA, the relevant consideration is the owner of the money in question and not the person in custody or physical possession of the money. Monies belonging to banks are not public funds as banks do not fall within the category of Federal, State and Local Governments and their different agencies. Consent of the Attorney General is therefore not required. According to the learned Jurist:

“The answer with regard to this appeal clearly from the facts in the record shows that, the money is that of the 2nd Respondent/Judgment Debtor, Fidelity Bank. This being the case, the provision of Section 84 cannot come to play as the money does not qualify as public fund. Further, and in my view and humbly, in the circumstance and facts of the instant appeal, the Appellant [CBN] cannot be held, said or found to be a public officer for the invocation of Section 84 of the said Sheriffs and Civil Process Act as it would negate the objective and intendment of the provision by the law makers in the interest of the public and result in total absurdity.”

Clearly, the CBN wasted public funds in its attempt to over-stretch its statutory boundaries of safeguarding the Nigerian economy.


Featured Image Credit: Punch.

*Understanding Garnishee Proceedings In Nigeria

Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has worked with a number of startup tech companies. He tweets @siazubuike.


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