Breaking News
Translate

CBN to sanction operators for banking infractions

By Yinka Kolawole

The Central Bank of Nigeria (CBN) is set to commence a new policy whereby individual bankers who are responsible, overtly or covertly, for any contravention of banking regulations will be sanctioned directly as opposed to the previous practice of penalising the banks.

Head, Corporate affairs, CBN, Mohammed M. Abdullahi, who disclosed this, noted that the new CBN Governor, Mallam Sanusi Lamido Sanusi, is concerned with the way banks are being made to pay penalty fees  using customers and shareholders’ money for infractions.

According to the CBN spokesman, Sanusi reckons that if bank officials who are directly involved with such contravention either directly or by reason of oversight are made to pay the required penalty fees, or even receive further sanctions, they are likely to be more careful.

He declared that the previous system of asking banks to pay penalty fees has not been very effective in checking contravention of regulations because those responsible are not the ones paying the penalty, but that if the supervising officer of the department concerned with the infraction is made to face the music there is every likelihood that such cases will reduce.

According to Abdullahi, the sanction may involve sacking of those responsible, depending on the gravity of the offence, adding that the measure does not exclude the chief executive officers.

It would be recalled that the CBN Governor, in his keynote address at a seminar recently held for Financial Correspondents and Business Editors in Makurdi, noted that the apex bank has strengthened the regulation and supervision of banks by laying greater emphasis on enforcement of code of corporate governance.

“In addition, resident examiners have been deployed to banks since January 2009, while standby teams of target examiners are deployed to any bank at any time to ensure timely regulatory actions if necessary. Contingency planning framework has been strengthened for systemic distress in banks by keeping vigilance on early warning signals through rigorous examinations.

“Greater emphasis is placed on e-FASS as a tool for banks’ returns analysis for speedy identification of early warning signals. Consolidated supervision and risk based supervision have been adopted and arrangements are being made to migrate from the current fragmented sub-sectoral supervision to all inclusive financial sector supervison.
“The CBN has also adopted a common accounting year end for all banks with effect from end December 2009, with a view to improving data integrity and comparability. The CBN has adopted the International Financial Reporting Standards (IFRS) and would review the Banks and Other Financial Institutions Act (BOFIA) to strengthen regulatory capacity,” he stated.                  The CBN boss affirmed that the current economic crisis is bound to reshape global competitive scene, assuring however, that the CBN will continue to take measures that will ensure that Nigeria’s monetary policy is in line with global best practices so as to achieve the nation’s economic objectives.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.