Three financial services regulators in the country have sanctioned 10 of the nation’s lenders to the tune of N2.5bn for committing various market infractions.
Specifically, the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and Financial Reporting Council of Nigeria (FRC) have sanctioned Guaranty Trust Bank Plc, Zenith Bank Plc, Access Bank Plc, FBN Holdings Plc, FCMB Group and five others for diverse market infractions.
The financial violations range from non-compliance with anti-money laundering procedures, non-compliance with ATM installation procedures, the opening of foreign branches without regulatory approval, and improper handling of customers’ accounts, among others.
In line with regulatory requirements, the various offences and the amount of fines were disclosed in the lenders’ audited results for the period ended December 31, 2020, submitted to the Nigerian Stock Exchange (NSE).
In the year under review, the CBN sanctioned FBN Holdings, GTBank, Access Bank, Stanbic IBTC Holdings and Union Bank of Nigeria, United Bank for Africa Plc, and Fidelity Bank Plc to the tune of N1.69bn for violating its policy on textile importation using foreign exchange sourced from the Nigerian market.
The CBN in March 2019 imposed foreign exchange restriction on the importation of textile and textile materials into the country.
The CBN Governor, Mr Godwin Emefiele, announced the foreign exchange restriction at a meeting with textile manufacturers, and cotton farmers.
He directed banks and bureaux de change to stop selling foreign exchange to such importers with immediate effect, adding that stopping textiles imports was key to revamping the local industry.
According to the financial reports, UBA was fined N636m by the CBN in 2020, while Access Bank was fined N464.23m in 2020.
Fidelity Bank was sanctioned five times by CBN with a sum of N446.9m in 2020. GTBank was fined a total of N237m for committing three market infractions.
From the 2020 audited results, Stanbic IBTC Holdings was sanctioned N277m by the CBN, while FBN Holdings’ total fine in 2020 was N223.4m.
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FCMB Group was also fined N183.37m by the CBN, SEC and the FRC.
UBA was heavily fined in 2020 for failing to adhere to CBN’s policy on textile importation. The bank was sanctioned N623m for failing to review the operation of its customers’ domiciliary accounts relating to foreign exchange transactions on textile importation.
The bank in its audited financial statement for the half year ended June 30, 2020, reported a sanction of N552m over infractions on the processing of import transactions. Also in 2020, the bank was sanctioned N8m relating to corporate social responsibility donations.
In addition, the pan-African bank was fined N3m and N2m for incomplete documentation on customer account opening and late refund to customers respectively.
Access Bank paid a sum of N220m in respect of sourcing for foreign exchange from the Nigerian foreign market for the importation of textile.
It was fined the sum of N57m for its failure to comply with the CBN’s anti-money laundering terrorism financing code for the period 2018 to March 2019.
The bank also received a N42.8m fine in respect of failure to comply with the CBN’s Anti–Money Laundering/Combating Financing of Terrorism regulations and Know Your Customer policies in a transaction.
It also got a N2.2m fine for failure to obtain Nigerian Stock Exchange approval prior to the announcement of the Notice of Meeting of Board of Directors of the Bank.
While it was fined the sum of N1m in respect of operating a Tier 3 account without valid means of identification, it also got a fine of N10m for inadequate KYC. It has also fined N131.23m in respect of the contravention of the CBN foreign exchange manual and TED ACT.
Fidelity Bank was sanctioned N2m for foreign exchange infraction in textile. Also, a N2m sanction was imposed on the lender for substituting Open Market Operations Bill prior to maturity by the bank.
The CBN also sanctioned Fidelity Bank with a N410m fine for foreign exchange infraction in textile importation as directed by CBN.
In addition, the bank paid the CBN N500,000 on trade infraction by the bank and N32.4m for violating foreign exchange infraction of the apex bank.
From GTBank’s audited results, the CBN imposed a total sanction of N237m on the bank over three market infractions.
The breakdown revealed that GTBank was sanctioned N186m for failure to conduct a spot check examination on domiciliary account balances of customers.
Also, the bank was sanctioned N81m and N6m for allowing customers to use foreign exchange sourced from the official market for textile importation and failure to pass the 2019 risk-based examination findings respectively.
Zenith Bank was penalised with a N11.4m fine by the CBN as relating to customer domiciliary account operations. However, in 2019, the bank paid a total of N21m sanctions in four market infractions to CBN.
Zenith bank paid N15m for improper classification of corporate accounts and N2m for non-compliance with anti-money laundering procedures.
