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.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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