Access Bank, GTB fined N96 million for illegal charges, other CBN violations

Two Nigerian banks, Access Bank and Guaranty Trust Bank (GTB), paid a combined fee of over N96 million in 2017 for contravening various regulations put in place by the Central Bank of Nigeria (CBN), a PREMIUM TIMES analysis of the banks’ financial statements for the year ending December 2017 has shown.

The penalties were paid for various offenses ranging from unutilized foreign exchange from CBN, late rendition of returns, violations of guide on bank charges, among other infractions.

A breakdown shows that during the year, while GTB paid about N18 million as fines, Access Bank paid over N78 million to the regulatory agencies.

Details of the payments are contained in the banks’ financial returns submitted to the Nigerian Stock Exchange, NSE.

The various regulatory bodies in the banking sector routinely impose sanctions as a means of strengthening corporate governance in the financial institutions and ensuring transparency.

For Access Bank, analysis shows that N60 million was paid in respect of Bank Verification Number (BVN) registration, N6 million in respect of unutilised foreign exchange from CBN, and N2 million in respect of the implementation of external auditors’ recommendation. Similarly, the bank paid N2 million for non-compliance over Bancassurance and N2 million for CBN foreign exchange examination.

Bancassurance is the selling of life assurance and other insurance products and services by banking institutions.

For injection of capital to subsidiaries, the bank paid N4 million while a separate N2 million was paid in respect of the Know Your Customer (KYC) requirement.

GTB on its part was fined N50,000 as penalty for late rendition of returns, N6 million as penalty on infractions on Guide to Bank Charges and a separate N2 million penalty on closure of an e-branch without prior CBN approval.

For violation of Guide to Bank Charges, the bank paid N2 million; in respect of limit above Gross Aggregate Net Open Position (NOP), it paid a separate N2 million; for under-repatriation of export proceeds by two customers of the Bank, it paid N2 million; and as penalty for delay in rendition of returns, it paid N25,000.

For non-submission of draft Recovery and Resolution Plan document, it was fined N2 million and it paid a separate N2 million penalty in respect of loan accounts without BVN.

There have been concerns on why management of banks often violate the rules and regulation of banking operations, thus leading to payment of sanctions from money that ought to accrue to shareholders as dividend.

While analysts are of the opinion that banking operations is huge and complex thus making it almost difficult to record a hitch-free operation throughout the financial year, the regulatory bodies should come up with tighter sanctions to control the infractions and make management of banks comply with the rules.

Although some of the banks have released their financial statements, PREMIUM TIMES reported Sunday that a few other banks have not released their financial statements despite the expiration of the March 31 deadline issued by the NSE. The affected banks include Union Bank, Fidelity, and First Bank.