Risk 5-year jail term, N50m fine
Henceforth, bank chief executive officers and directors risk jail terms for malpractices in any transaction that seeks to short-change depositors/depositors funds.
At a stakeholders interactive hearing in Abuja, yesterday, three bills aimed at introducing some financial sector reforms to clean-up and give more bite to Banks and other Financial Institutions Act, BOFIA, two regulators, the Central Bank of Nigeria, CBN, and the Nigeria Deposit Insurance Corporation, NDIC, as a consensus, recommended stiffer institutional penalties that will serve as a deterrent to directors, CEOs, and managers whose inaction could lead to the collapse of commercial banks and loss of depositors’ savings.
In a presentation to the House of Representatives Committee on Banking and Currency on three bills to repeal and re-enact Banks and Other Financial Institutions Act, the CBN noted that if the penalties are not strengthened, banks often prefer to pay penalties and fines rather than obey the laws because of their large profit.
Director, Legal Department of the apex bank, Mr. Johnson Akinwunmi, who stood-in for the CBN governor, said at the opening of a two-day public hearing on the bills that experience had shown that banks and other financial institutions are constantly on the lookout on how to manipulate new regulations that they perceive as a threat to their profit.
Corroborating the apex bank’s view on this development, NDIC’s Company Secretary and Legal Adviser, Benema Taribo, said operators in the financial sector, mostly from the private sector, are more buoyant than regulators from the public sector and as such are in a position to pay existing penalties which represents a miniscule of funds at their disposal, rather than conform to regulations.
Taribo noted that the committee should not consider the call by the CBN that it should be given the power to revoke the operating license of erring financial institutions, stressing that such powers should be ceded to the NDIC that is responsible for distressed bank depositors getting their money back.
According to the Chairman, House Committee on Banking and Currency, Jones Onyereri, the proposed amendment to the BOFIA Act has penalties not only binding on culpable institutions, but also on individuals running foul of the adopted regulations.

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