Six commercial banks paid N392.77 million in fines to the Central Bank of Nigeria (CBN) in 2013 for contravening various aspects of Banks and Other Financial Institutions Act (BOFIA), it has been revealed.
The penalised banks are Diamond Bank, Zenith Bank, Skye Bank, UBA, First City Monument Bank (FCMB) and Sterling Bank.
According to NAN, a breakdown of the figures contained in the individual banks’ 2013 Annual Report indicated that Zenith Bank paid the highest fine of N276 million for various contraventions.
The bank was fined for promoting top management staff without CBN approval, providing insufficient data for lodgement on credit report, and non-rendition of original certificate of capital importation.
Sterling Bank paid N52.97 million for also 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 CBN, improper reclassification of public sector deposits, and appointment of staff without CBN approval, among other infractions.
Diamond Bank paid a total sum of N7.99 million for numerous infractions.
Diamond paid N2 million fine for the delay in refunding a customer’s $827,223 as directed by the CBN.
It was fined N4 million for promoting two senior management personnel without the approval of the CBN.
It was also 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.
Skye Bank was fined N6 million for failure to obtain CBN’s approval to promote a senior staff and for under-reporting of regulatory returns on public sector deposits.
It was also fined for failure to update documentation on a customer’s account.
Speaking on the contraventions, Mr Sunny Nwosu, national coordinator of the Independent Shareholders Association (ISAN), urged the management of banks to be more careful to avoid wasting shareholders’ funds.
Nwosu described commercial banks’ contraventions as unfortunate, stressing that the huge fines had robbed shareholders of enhanced dividends during the year.
Mr Bayo Adeleke, ISAN secretary, 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 advised regulators to be proactive, while banks should maintain a clean slate.