Six billion three hundred and twelve million naira (N6.312bn) was paid as fine to the Central Bank of Nigeria, CBN, by eight banks for flouting federal government’s directive on Treasury Single Account, TSA, and contravening the Banks and Other Financial Institutions Act, BOFIA, between January, 2014 and October, 2015.
The banks are, Skye bank, United bank for Africa, First Bank, GTBank, Zenith Bank, First City Monument Bank, FCMB, Access Bank and Sterling Bank.
CBN’s hammer recently fell on two major banks – First Bank of Nigeria Limited (FirstBank) and United Bank for Africa (UBA) Plc for failing to comply with the directive on TSA, while a fine of N1,877,409,905.12 was imposed on FirstBank, UBA was fined N2,942,189,651.45.
Unlike UBA and First Bank that were sanctioned three weeks ago, a higher percentage (10%) of fine was imposed on Skye Bank because it shrouded the MDAs’ funds until the funds were uncovered by CBN examiners during a visit to the bank.
While notifying Skye Bank of the fine, the apex bank’s circular signed by the Governor, Mr. Godwin Emefiele, noted an October 14, 2015 request by its Director of Banking Supervision, Mrs. Tokunbo Martins, for information on Skye Bank’s total amount remitted and unremitted to TSA in a prescribed format with a submission deadline of 12pm, October 15, 2015.
It however stated that the bank’s initial submission on “15th October 2015 in respect of the information requested indicated unremitted amount of N442, 916,642.92, a rendition which was false as your bank failed to report FGN MDAs’ balances amounting to N40,052,289,769.47 as at 23rd October 2015.”
The unreported sum, it said, was unearthed during CBN examiners’ onsite visit to Skye Bank on October 26, thereby aggravating the offence.
CBN had also imposed fines of about N312 million on five Deposit Money Banks, DMBs, last year for various regulatory infractions, particularly those bordering on contraventions of the Banks and Other Financial Institutions Act, BOFIA.
Zenith Bank, GT Bank, First City Monument Bank (FCMB), Access Bank and Sterling Bank, were affected last Year.
Of the lot, Access Bank was the worst hit by the penalties, paying a fine of N184 million for various contraventions of the BOFIA provisions last year.
Specifically, the bank paid the fine for failure to obtain the apex bank’s approval for additions to investment in properties totaling N5.15 billion as well as non-compliance to implementation of the recommendations of a financial services provider, PricewaterhouseCoopers (PwC).
In addition, the bank was also sanctioned for contravening foreign exchange manual and weaknesses noticed in its internal control and know your customer procedures.
Other infraction for which the bank was penalised was its contravention of the minimum documentation in the credit file and reporting of public sector deposit.
For Sterling Bank, a total fine of N50 million was paid for under reporting of public sector deposits as at Aug. 29, 2014, while Zenith Bank Plc was made to pay a fine of N48 million for non disclosure of date of last lodgment on credit print out, incomplete reporting of all transactions of politically exposed persons and appointment of a Deputy General Manager.
Similarly, the bank was also found wanting for incomplete reporting of international funds transfer, incomplete reporting of currency transactions and misclassification of some public sector deposit, among others.
The fourth bank in the order of sanctions was GT Bank which coughed out N24 million as fine for the appointment of some top management without the monetary authorities’ approval as well as infraction arising from anti-money laundering/combating the financing of terrorism spot checks, among others.
The FCMB Group was penalised N6 million for not implementing prior year’s external auditors recommendations and failure to comply with ATM operation standards, amongst others
Reacting to the sanctions on the banks which he considered as shareholders’ losses in real terms, the President of Renaissance Shareholders Association, Ambassador Olufemi Timothy, described the development as ugly in terms of the depleting effects on shareholders’ funds in the banks as well as the nation’s financial system stability.
Timothy, during a telephone chat said shareholders had been worried over various fines being imposed by the CBN, describing some of them as not necessary.
However, he was particularly concerned about the need of the banks’ managements to comply with regulatory guidelines as the apex bank would not close its eyes to infractions whenever they are perpetrated by any of the banks.
Speaking in a similar tone, the National Coordinator of Pragmatic Shareholders Association, Mrs. Bisi Bakare believed that the CBN should caution the banks with queries some time rather than imposing fines that tend to continue to erode shareholders’ funds.
While agreeing on the need for proper regulation of the banks, Bakare explained that the banks’ managements also have corporate responsibility to obey the regulatory guidelines in order to ensure financial system stability.
Citing instances where some other banks had been fined with huge sums in the recent past to justify her stance, the Pragmatic Shareholders’ leader noted that it had become more imperative for the banks to avoid any dealings or acts that could undermine their investors’ expectations.
An industry analyst, who spoke on condition of anonymity, confirmed that it was practically difficult for any of the banks to operate without paying one fine or the other in a financial year as they tend to always want to cut the corners to make more profit.


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