Five Nigerian Banks Paid N1.4bn for Forex Infringement

Five Nigerian Banks Paid N1.4bn for Forex Infringement

Five top banks in Nigeria paid a total of N1.4bn as penalties to financial regulatory bodies such as the Central Bank of Nigeria, Security Exchange Council, and Financial Reporting Council of Nigeria, in the first half of the year, according to Punch.

The banks are the United Bank of Africa, Fidelity Bank, Access Bank, Guarantee Trust Bank, and First City Monument Bank.

This figure was arrived at from an analysis of the H1 2021 financial statements of the banks obtained from their websites.

Findings show that the penalties were a result of contraventions and infractions of guidelines instituted by the Federal Government through the Banks and Other Financial Institutions Act, relevant CBN circulars, and other regulatory requirements.

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The BOFIA Act is a regulatory framework that was introduced to guide the financial industry. The Act which was first enacted in 1997 empowers the CBN to implement its provisions.

The president, Major General Muhammadu Buhari (retd.), had in November 2020, signed the amended BOFIA Act 2020 which repealed the erstwhile BOFIA 2004.

In the period under review, GTB paid a total sum of N692m as penalties to regulators for two major infractions bordering on foreign exchange transactions carried out by Betting and Gaming Companies (N690m) and non-refund of interest on the debit of non-interest related charges to non-funded accounts (N2m).

The total sum paid for infractions by Fidelity bank in H1 2021 was N349.3m lower than the aggregate sum of N414.5m paid as penalties in H1 2020.

According to the financial reports, Access Bank was fined N184.5m by the CBN while SEC fined the bank N1m during the review period.

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The violations committed by the bank include, “contravening the Central Bank’s Foreign Exchange Regulations from January 1, 2013, to July 31, 2020, contravention of rule for receiving bank, a shareholder’s complaint on dividend, CBN’s Consumer Protection report for the period of Jul 2020- Dec 2020, failure to comply with the CBN’s money laundering/combating the financing of terrorism regulations and Know Your Customer policies in respect of a customer’s account and failure to comply with Guidelines on Diaspora remittances.”

UBA incurred regulatory sanctions of N278m in H1 2021, N287m lower than the sum of N565m incurred in H1 2020.

Meanwhile, FCMB Group’s penalties rose from N150.2m paid to regulatory bodies in H1 2020 to N162.3m in H1 2021.

Five Nigerian Banks Paid N1.4bn for Forex Infringement