Nigeria, March 10 -- Sterling Bank opened an account for Indo Kaduna MRTS JV Nigeria Limited-a joint venture entity set up in 2016 by the Kaduna State Government and some Indian business people-and received billions of naira on its behalf before the company was legally registered.

The development raises concerns about regulatory lapses in Nigeria's banking sector.

An Independent Corrupt Practices and Other Related Offences Commission (ICPC) investigation uncovered the alleged diversion of N1.37 billion from the N11 billion paid by the Kaduna State Government under the immediate past governor, Nasir El-Rufai.

The payments were made with respect to the state's now-abandoned light rail project.

The commission found that Mr El-Rufai's gov...