CBN warns MFBs operators against false rendition of returns

By Amaka Agwuegbo

The Central Bank of Nigeria (CBN) has     warned micro- finance banks (MFBs) to stop falsifying monthly returns, adding it would henceforth impose sanctions on management of erring MFBs.

Director, Other Financial Institutions Department (OFID), Mr. Femi Fabamwo,  said in Lagos “Since  the   inception of the   micro-finance   policy   in   2007,   there   have   been challenges in rendition of returns. These challenges include late or non rendition of returns, incomplete and falsification of returns.

“Others include clerical errors, wrong classifications of items, and outright failure to balance the Total Assets with the Total Liabilities. The CBN will no longer continue to accept such irregularities.

Speaking through  the Deputy Director OFID, Mr. William Ogumba, at a  workshop on rendition of returns for MFBs organized by the Other Financial Institutions Department (OFID), CBN, in collaboration with Nigeria Deposit Insurance Corporation (NDIC), Fabanwo said “We have repeatedly demanded timely and accurate returns. In 2008, we sent several circulars bothering on   rendition of returns. We have also reiteriated the need for timely returns at your COMBIN meetings.

“As operators in the financial industry, you are expected to provide financial information that are credible and  in a manner acceptable to the regulatory authorities. The responsibilities for rendition of returns are clearly stated in Section 331 (1) and (2) of the Companies and Alliec Matters Act of 1990. These extensive provisions are further supported by Section 24 (1) and (2) of the Banks and Other Financial Institutions Act (BOFIA)  Section 6.2 (i) of the Regulatory and Supervisory Guidelines for Microfinance  Banks in Nigeria.

“While the CBN had maintained moral suasion in addressing observed lapses in the past, the time has now come for practitioners to perform their roles as stipulated in the policy. Consequently from the end of this workshop, lapses in rendition of returns will be viewed with the seriousness it deserves. The board and management will be held responsible for any lapse in the rendition of returns.”

The workshop is meant to provide in-depth under-standing of the process of rendition of returns and to acquaint participants of the changes made in the returns format. The need for accurate and timely returns cannot be over emphasized as the returns form the basis for the global picture of the sub-sector.

Consolidated figures derived from monthly returns submitted by MFBs are sent on regular basis to Research and other departments of the CBN. It is also made available to multilateral Institutions. It therefore follows that only credible figures should be submitted to the CBN and NDIC. At this time of our national development and in line with our vision to become one of the best 20 countries by 2020, we cannot afford to present misleading returns which invariably results in feeding the public with unreliable data.