Banks pay N392.77m fines to CBN

By Our Reporter
In Nigeria
Jun 10th, 2014
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Six commercial banks paid N392.77 million in fines to the Central Bank of Nigeria (CBN) last year for contravening various aspects of the Banks and Other Financial Institutions Act (BOFIA).

The penalised banks are Diamond Bank, Zenith Bank, United Bank for Africa (UBA), First City Monument Bank (FCMB) and Sterling Bank.

According to the News Agency of Nigeria (NAN), a breakdown of the figures contained in the individual banks’ 2013 Annual Report, showed that Zenith Bank paid the highest fine of N276 million for various infractions.

The bank was fined for promoting top management staff without CBN’s approval, insufficient data for lodgment on credit report and non-rendition of original certificate of capital importation.

Sterling Bank paid N52.97 million fine for promoting  management officials without CBN’s approval and foreign exchange examination infraction, among others.

UBA was fined N43.70 million for opening a branch without prior approval of the regulator, improper reclassification of public sector deposits and appointment of staff without the apex bank’s approval, among others.

On its part, Diamond Bank paid N7.99 million fine for numerous infractions.

A breakdown showed that the lender paid N2 million fine for the delay in refunding a customer’s $827,223  as directed by the CBN.

The leder was also  fined N4 million for promoting two senior management personnel without the approval of the CBN and ordered to pay N1.99 million for withholding a customer’s funds for 26 days after the promoters of the customer had written the bank that they were no longer interested in a facility.

Similarly, FCMB Group was fined N6.1 million for delayed disbursement for 20 days to the beneficiary under Commercial Agriculture Credit Scheme, among others.

Speaking on the contraventions, National Coordinator, Independent Shareholders Association (ISAN), Mr Sunny Nwosu, urged the management of banks to be more careful and avoid wasting shareholders’ funds.

Nwosu described commercial banks’ contraventions as unfortunate, stressing that the huge fines have robbed shareholders of enhanced dividends during the year.

ISAN Secretary, Mr Bayo Adeleke,commended the CBN for its actions to ensure that commercial banks complied with rules and regulations of engagement.

Adeleke said that such penalties should not be viewed from income generating perspective, but to enhance good corporate governance and adherence to standards.

He urged regulators to be proactive, while banks should maintain a clean slate

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