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Infractions: CBN, SEC Fine Three Banks



  • Infractions: CBN, SEC Fine Three Banks

The Central Bank of Nigeria and the Securities and Exchange Commission have slammed various fines on three banks for committing 16 regulatory infractions.

The Central Bank of Nigeria and the Securities and Exchange Commission have fined Access Bank Plc, Guaranty Trust Bank Plc, and United Bank for Africa Plc the sum of N200m for committing a total of 16 regulatory infractions.

The offences, which ranged from violating regulatory guidelines on anti-money laundering/combating the financing of terrorism, rendition of reports on politically exposed persons, to failure to conduct enhanced due diligence on directors of some customer firms, were committed during the 2016 financial year.

The details of the offences and the fines apportioned by the CBN and SEC in the various instances were contained in the 2016 annual reports of the three banks.

Access Bank, in its 314-page annual report, revealed that it committed a total of six infractions in the year on which the CBN and SEC imposed a total fine of N49.475m.

While the CBN fined the bank N48m for five of the offences, SEC imposed N1.475m on the lender for an infraction.

According to the annual report, the details of the fine imposed by the CBN are: the sum of N24m in discharge of the penalties on the AML/CFT examination; N18m in respect of risk-based supervision examination; and N2m penalty with respect to the rendition of reports on politically exposed persons.

Others are N2m penalty for failure to conduct enhanced due diligence on directors of some customers’ firms; N2m penalty for usage of general/blanket PEP approval for a particular customer; and the sum of N1.475m penalty to SEC for late submission of annual report.

GTBank, in its 378-page annual report, revealed that it committed four infractions for which it was slammed a total of N62.05m fine by the CBN during the year.

According to the report, the details of the fines are: penalty in respect of services rendered by unapproved International Money Transfer Service Operators, N50m; penalty in respect of un-refunded negotiable current account maintenance fees, N6m; penalty in respect of anti-money laundering/combating the financing of terrorism examination as of April 2016, N6m; and delay in rendition of returns, N50,000.

UBA, in its 246-page annual report, also revealed that the central bank imposed N87.64m fines on it for committing six regulatory infractions last year.

The lender confirmed under the notes to its financial statements that during the year, it paid the fines in relation to non-compliance with banking regulations.

According to the report, details of the infractions and the penalties are: penalty in respect of customers using the ATM cards issued to other customers related to them, N48m; penalty for failing to file timely reports on suspicious transactions of some customers, N30m; and penalty for omission of updated means of identification in customers’ files, N4m.

Others are penalty for late processing of monthly pension payments on behalf of various organisations, N2.49m; penalty for processing payment for software licence for a customer prior to the receipt of the National Office for Technology Acquisition and Promotion/Nigerian Communications Commission approved agreement, N2m; and penalty for errors in charges applied to Pension Fund Administrator accounts, which were not reversed within the agreed turnaround time, N1.15m.

However, the independent auditor of the three banks, PricewaterhouseCoopers, stated that the lenders complied with most regulatory guidelines except in the areas in which the regulatory infractions were committed.

But a financial expert and Chief Executive Officer of HighCap Securities, a securities and investment advisory firm, Mr. David Adonri, said there was a need for the three banks to strengthen their compliance departments as well as their compliance-related activities in order to avoid future fines.

He said, “The three banks involved in these 16 infractions are very big banks and, as such, it is difficult for controls to be 100 per cent. Along the line, there may be infractions that will attract regulatory sanctions. Having said that, it is not a good development for those contraventions to be happening. Measures must be taken to exert greater controls to avoid reoccurrence in the future.

“It is not a pleasant development because some of the infractions are heavy. Take for instance the infraction that bothers on violation on the AML/CFT; it makes the fight against terrorism difficult and it is a threat against national security. The banks need to be up and doing to forestall a reoccurrence.”

The CBN had in November 2016 fined four banks heavily for committing various regulatory infractions. Specifically, the lender imposed N4bn fine on Skye Bank Plc for failing to render appropriate returns on accounts of some government institutions and agencies.

It also sanctioned First Bank of Nigeria Limited N1.87bn for allegedly refusing to remit about N37.55bn belonging to the Nigerian National Petroleum Corporation.

It also fined UBA N2.94bn for failing to remit N58.84bn to the NNPC and to the Treasury Single Account as and when directed.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria’s Public Debt Hits ₦121.67 Trillion as Borrowings Surge – DMO



The Debt Management Office (DMO) of Nigeria has announced that the country’s total public debt has risen to ₦121.67 trillion ($91.46 billion) as of March 31, 2024.

This represents an increase of ₦24.33 trillion from the ₦97.34 trillion ($108.23 billion) recorded at the end of December 2023.

The surge in debt is attributed to both domestic and external borrowings by the Federal Government, the 36 state governments, and the Federal Capital Territory (FCT).

The DMO’s report reveals that Nigeria’s domestic debt now stands at ₦65.65 trillion ($46.29 billion), while the external debt is ₦56.02 trillion ($42.12 billion).

The DMO noted that the rapid increase in public debt is largely due to new borrowing to partially finance the 2024 Budget deficit and the securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria (CBN).

“The increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria,” the DMO stated.

Despite the rising debt, the DMO remains optimistic about future debt sustainability, contingent on improvements in government revenue.

“Whilst borrowing, as provided in the 2024 Appropriation Act, will continue, we expect improvements in the Government’s Revenue to enhance debt sustainability,” the DMO added.

The increase in debt comes at a time when President Bola Tinubu is preparing to present the 2024 Supplementary Budget to the National Assembly.

This follows the President’s approval of the ₦28.7 trillion 2024 Appropriation Bill on January 1, 2024, which was ₦1.2 trillion higher than the budget originally proposed in November 2023.

The 2024 budget, dubbed the “Budget of Renewed Hope,” set ambitious targets, including pegging the oil price at $77.96 per barrel and estimating daily oil production at 1.78 million barrels.

However, the naira has faced severe depreciation, plunging to nearly ₦2,000/$1 in February, before stabilizing around ₦1,500/$1.

Economic analysts warn that the escalating debt and currency depreciation could pose significant challenges to Nigeria’s economic stability.

The government’s ability to manage its borrowing and stimulate revenue generation will be critical in navigating these fiscal pressures.

As Nigeria grapples with these economic realities, the focus remains on finding sustainable solutions to manage the growing debt burden while fostering economic growth and stability.

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Banking Sector

Federal High Court Sets Date for Contempt Hearing in GTB vs. AFEX Loan Case



The Federal High Court in Lagos has scheduled June 27, 2024, for the next hearing in the ongoing contempt suit filed by Guaranty Trust Bank Plc (GTB) against directors of AFEX Exchange Commodities Limited.

The case revolves around a disputed N17.81 billion loan obtained under the Central Bank of Nigeria’s Anchor Borrowers’ Programme.

Presiding over the court, Justice Chukwujekwu Aneke set the date following a session where arguments were presented by the plaintiff’s lead counsel, Mr. Ade Adedeji (SAN), and the respondent’s counsel, Prof. Olawoyin (SAN).

The core issue pertains to the alleged disobedience of a court order by the directors of AFEX Exchange Commodities Limited.

GTB, through its counsel Ajibola Aribisala (SAN), has accused AFEX and its directors—Ayodele Balogun, Jendayi Fraaser, Justin Topilow, Mobolaji Adeoye, and Koonal Ghandi—of contempt for failing to comply with a court directive.

The bank alleges that these directors did not appear in court as mandated, which led to the initiation of contempt proceedings.

During the latest session, Adedeji emphasized the necessity for the directors to appear in person, stating, “My lord, the parties in contempt are not in court. The contemnors cannot sit in the comfort of their homes and send a lawyer to court in contempt proceedings. The law is trite that they must appear before the court.”

In response, Olawoyin argued that he had only recently been briefed on the matter and was not fully aware of the prior developments.

He noted that some of the individuals listed as directors were no longer with the company, adding that one current director, Mr. Akinyinka, was present in court, while another was on pilgrimage.

The contempt case traces back to a suit marked FHC/L/CS/911/2024, where GTB sought to recover the loan amount through legal measures.

On May 27, Justice Aneke granted an interim Global Standing Instruction (GSI) injunction, which directs over 20 banks to transfer funds credited to AFEX into its account with GTB until the debt is settled.

Also, the court authorized GTB to take possession of AFEX’s 16 warehouses across seven states and sell the commodities stored within, as these were procured using the CBN’s loan facility.

The N17.81 billion loan comprises N15.77 billion in principal and interest outstanding as of April 17, 2024, and an additional N2.04 billion covering recovery costs and incidental expenses.

As the court prepares for the next hearing, the financial and legal communities are closely watching the proceedings.

The outcome will significantly impact not only the involved parties but also set a precedent for handling similar cases in the future.

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Banking Sector

CRC Credit Bureau Celebrates 15 Years with Record 14% Credit Penetration in Nigeria



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CRC Credit Bureau Limited celebrated its 15th anniversary with a record 14% credit penetration rate.

The occasion was marked with the CRC Finance and Credit Conference 2024 held in Lagos, where key industry stakeholders gathered to reflect on the bureau’s journey and discuss future trends in credit risk management.

Founded in January 2010 and licensed by the Central Bank of Nigeria (CBN), CRC Credit Bureau has played a pivotal role in enhancing access to credit across Nigeria.

Dr. Tunde Popoola, the Group Managing Director/CEO of CRC Credit Bureau Limited, highlighted the bureau’s journey, noting that from its inception with a single product, CRC has expanded its offerings to 18 products covering all aspects of the lending value chain.

Speaking at the conference, Dr. Popoola underscored the bureau’s contribution to Nigeria’s financial sector, stating, “CRC Credit Bureau has been instrumental in transforming access to credit in Nigeria over the past 15 years. We started with a vision to simplify credit access through reliable data and have since grown to serve millions of Nigerians.”

The event focused on the theme “Sustainable Financing Options: Innovations in Credit Risk Management,” emphasizing the importance of sustainable finance amid economic challenges.

The conference provided a platform for stakeholders to discuss strategies for mitigating risks and enhancing the efficiency of credit operations in Nigeria.

Reflecting on the current state of credit penetration, Dr. Popoola noted that while Nigeria has made significant progress, the 14% penetration rate still falls below global benchmarks.

He highlighted that CRC Credit Bureau currently holds credit scores for 33 million Nigerians, facilitating over 29.4 million searches in 2023 alone, with an additional 10 million searches conducted in the first quarter of 2024.

Joel Owoade, Chairman of CRC’s Board of Directors, acknowledged the economic headwinds impacting businesses in Nigeria but stressed the importance of sustainable financing to mitigate risks associated with lending.

“As we navigate economic fluctuations, sustainable financing remains crucial to fostering economic stability and growth,” Owoade remarked.

The conference also featured insights from industry experts on leveraging artificial intelligence (AI) in credit risk management and regulatory frameworks to support AI-driven innovations.

Olaniyi Yusuf, Managing Partner of Verraki, highlighted the potential of AI to create jobs and enhance economic productivity, calling for supportive regulatory environments that balance innovation with risk management.

Representatives from the Central Bank of Nigeria (CBN) emphasized the regulator’s efforts to promote sustainable credit practices.

Dr. Adetona Adedeji, Acting Director of the Banking Supervision Department at CBN, outlined initiatives such as the National Collateral Registry and Global Standing Instruction aimed at enhancing credit access while minimizing risks.

As CRC Credit Bureau looks ahead, Dr. Popoola expressed optimism about the future, stating, “We remain committed to driving greater financial inclusion and expanding credit access in Nigeria. Our focus is on leveraging technology and strategic partnerships to deliver innovative solutions that meet the evolving needs of consumers and lenders.”

The celebration of CRC Credit Bureau’s 15th anniversary underscored its pivotal role in Nigeria’s financial sector, marking a milestone in the nation’s journey towards broader financial inclusion and sustainable economic growth.

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