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9 Listed Banks Pay N643.6m For Infractions

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Leadership Nigeria News Today

By OLUSHOLA BELLO, Lagos
The nine commercial banks that were sanctioned by financial regulatory bodies in the country have paid a total sum of N643.621 million fine for infractions in 2016.
The financial regulating bodies are Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE).
Of the nine banks, Fidelity Bank, paid a total fine of N175.325 million, FBN Holdings paid N102 million, FCMB Groups paid N88.76 million, UBA paid N87.64 million, Guaranty Trust Bank paid N62.05 million, while Access Bank paid N49.475.
Others are Union Bank, Zenith Bank and Sterling Bank which paid N48 million, N16 million and N14.371 million respectively.
Infractions routinely committed year after year by the banks range from late filing of financial reports, abuse of customers’ Automated Teller Machine cards, failure to undertake statutory due diligence, violation of anti-money laundering laws, cheating customers and anti-terrorism regulations relating to funds transfer, among others.
Reviewing some of these sanctions showed that the CBN fined Fidelity Bank Plc N174 million for nine market infractions in 2016, while NSE sanctioned the bank N700,000 for late filing of audited result and accounts year ended 2016.
CBN, SEC and NSE fined FBN Holdings Plc N102 million for 17 market infractions in 2016. A breakdown of the holding company’s infractions showed that it paid N400,000 to NSE for late submission of 2015 annual accounts while SEC penalized the holding company N20.75 million for late submission of 2015 annual accounts and fourth quarter unaudited accounts.
In addition, FBN Capital Limited was sanctioned and fined N418,000 by SEC for failure to respond timely to request for information and N135,000 by SEC for contravention of section 161 of ISA 2007 regarding issuance of unregistered units of FBN Nigeria Eurobond Fund.
Also, the bank subsidiary, First Bank of Nigeria Limited was fined N30 million by CBN in respect of registration of international money transfer operations (IMTOs) and N20 million for cases of linking multiple accounts to single biometric verification number (BVN). CBN also sanctioned the bank N12 million for various anti-money laundering and countering financing of terrorism infractions emanating from spot check carried out on the bank’s branches in January 2016, among others.
For FCMB Group, it paid CBN N84.25 million for five infractions, ranging from late rendition of daily returns, illegal international money transfer services, failure to file a suspicious transaction’s report, unlawful disclosure of customers information to third party and non-refund of customers’ fund shortchange by ATM non-dispense, while its stockbroking subsidiary, CSL Stockbrokers Limited was penalized N4.51 million by SEC.
Stakeholders in the capital market said due to the nature of the banks’ business, tougher rules and harsher punishment are needed to protect the depositors, shareholders and the economy at large.
They wondered why the management of the financial banks would be violating the laid-down rules and regulations of the market operators to that extent.
They lamented that the money that should be coming to shareholders of the companies in form of dividend are being paid to regulators as fine, saying the banks should curb the ugly trend.
Chief operating officer of Investdata Limited said the financial system is so central to economic well-being that the fight against corruption has to berth at the banks. The government and the CBN should treat financial misdeeds as economic sabotage. The laws and regulations should be made stricter and rigorously enforced, he pointed out.
The managing director of Highcap Securities Limited stated there should be a stronger resolve and the political will to institute zero tolerance for hanky-panky in the financial system.
He however said, the banking sector is very large with operations nationwide and some with international offices and so to control such entities without blemish would be very difficult.
This is not surprising that there will be contraventions here and there occasionally but those contraventions cannot materialise enough as to cause problems for the banks’ shareholders.
The managing director of Dependable Securities Limited, Mr. Chinenyem Anyanwu said there should be a stronger resolve to deal with hanky-panky in the financial system and urged the banks to do the right thing to avoid being penalized.
According to him, before CBN or any other regulatory body will penalize, the banks must have committed the offence that is against their code of conduct.
Speaking on the contraventions, the national coordinator, Independent Shareholders Association (ISAN), Sunny Nwosu urged the management of banks to be more careful and avoid wasting shareholders’ funds. He described commercial bank scontraventions as unfortunate, stressing that the huge fines had robbed shareholders of enhanced dividends during the year.
Another shareholder, Mr. Bayo Adeleke, commended the Central Bank for its actions to ensure that commercial banks comply with rules and regulations of engagement.
According to him, such penalties should not be viewed from income generating perspective, but to enhance good corporate governance and adherence to standards. He advised regulators to be proactive, while banks should maintain a clean slate.





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