…as GTCO, Sterling Bank, 6 Others sanctioned N3.61bn in 3 years
By Yinka Ezun
Amid improved prudential regulatory guidelines, the Banking sector in the last three years continued to face Central Bank of Nigeria (CBN), Securities & Exchange Commission (SEC) and Nigerian Exchange Limited (NGX) contraventions.
Investigations by Standard Times revealed that between 2018 and 2020 a total of eight banks were sanctioned N3.61billion as Stanbic IBTC Holdings Plc, the most sanctioned bank in the country.
Other banks sanctioned by the regulating bodies are Zenith Bank Plc, FBN Holdings Plc, Guaranty Trust Holding Company Plc, FCMB Group Plc, Sterling Bank Plc, Union Bank of Nigeria Plc (UBN) and Wema bank Plc.
The contraventions by these banks diverse from customers access charges, late filing of results to regulating bodies, late resolution of customers complain in respect ATM dispense, among others.
Standard Times gathered that these eight banks in 2018 were sanctioned N2.04billion but it dropped to N536.73million in 2019. However in 2020, the CBN and SEC sanctioned the eight banks N1.04billion.
The breakdown revealed that Stanbic IBTC Holdings between 2018 & 2020 was sanctioned N2.28billion, while FCMB group was sanctioned N403.5million.
Tier-1 banks, GTCO and FBN Holdings were sanctioned N335million and N315.67million respectively, as Union Bank of Nigeria was penalized N146.25million between 2018 and 2020.
In addition, Sterling Bank sanctioned N53million; Zenith Bank, N42.4million and Wema bank, N34.2 million in the last three years.
From GTCO’s 2020 audited results, the CBN imposed a total sanction of N237 million on the bank over three market infractions.
The breakdown revealed that GTCO was sanctioned N186 million for failure to conduct a spot check examination on domiciliary account balances of customers.
Also, the bank was sanctioned N81million and N6million for allowing customers to use foreign exchange sourced from the official market for textile importation and failure to pass the 2019 risk-based examination findings respectively.
Zenith Bank was penalised with a N11.4 million fine by the CBN as relating to customer domiciliary account operations. However, in 2019, the bank paid a total of N21 million sanctions in four market infractions to CBN.
Zenith bank in 2020 paid N15 million for improper classification of corporate accounts and N2 million for non-compliance with anti-money laundering procedures.
In the same year, the bank paid N2 million twice for incomplete documentation of newly opened accounts and fines for non-compliance with ATM installation procedures.
Stanbic IBTC Holdings paid the apex bank and SEC penalties that amounted to N277 million in 2020.
The CBN imposed a N32 million fine on Stanbic IBTC for cash evacuation to an offshore account. Extract from the group’s contraventions in 2020 revealed that the CBN fined the financial institution heavily for using foreign exchange to import textile into the country.
Also, the financial institution was sanctioned for the underpayment of the Industrial Training Fund contribution between 2013 and 2018.
The bank also contravened the regulator’s code on evacuation to its offshore account and an alleged contravention of the provision of memorandum 25 (5) of the CBN’s FX manual in processing FX transfers.
From the group’s audited results for the period ended December 31, 2020, the CBN imposed a penalty of N152 million on the bank, following the investigation, which was conducted on foreign exchange used to import textiles in October 2019.
The bank’s audited results said, “Penalty on involvement in textile importation using foreign exchange sourced from the Nigerian market: The CBN imposed a penalty of N10m on the bank following the investigation which was conducted on foreign exchange used to import textiles for the period of 16 October to 30 November, 2019.
“Penalties arising from the AML/CFT examination of the bank: The CBN imposed a penalty of N20 million on the bank for failing to report some alleged suspicious transactions. The SEC imposed a total penalty sum of N3 million against SIAML for maintaining its mutual funds’ collection bank accounts as non-custodian.
“Penalty of N2m for failure to obtain CBN approval in the validation of non-valid for foreign exchange transaction.”
The CBN also fined the bank N2 million for not fully complying with the directive on linking Bank Verification Number details, exchange signatures, directors and beneficial owners to their respective entity accounts (incorporated and non-incorporated).
Other sanctions are, “The CBN imposed a penalty of N32m million on the bank for contravening the extant rules on cash evacuation to the bank’s offshore account through Messrs.
“The CBN penalised the bank for the sum of N43.2 million in respect of an alleged contravention of the provision of the memorandum of 25 (5) of the CBN’s FX manual in processing FX transfers.
“The ITF imposed a penalty on SISL amounting to N12.76 million for its underpayment of ITF contribution over a five-year period (2013-2018). The SEC imposed a penalty sum of N386,000 on SINL for breaching the SEC rules as well as the Fund’s Trust Fund with respect to the Vantage Equity Fund.”
First Bank of Nigeria Limited paid a penalty of N52 million in February 2020 for involvement in textile importation using foreign exchange source from the Nigerian market
The bank paid a penalty of N2 million in February 2020 for non-implementation of Two-Factor Authentication on FirstConsole as of June 2018.
An additional penalty of N40million was paid in February 2020 in respect of foreign exchange market in textile importation in the period.
A penalty of N20 million was paid in October 2020 by the bank for allowing customers to transfer accumulated cash deposits in excess of $10,000 in contravention of Memorandum 25b of FOREX manual.
FBN Holdings paid a penalty of N2.5 million to FRC for certification of financial statements with expired FRC number. FBNQuest Capital Limited paid a penalty of N1m to FRC for certification of financial statements with expired FRC numbers. FBNQuest Trustees Limited also paid a penalty of N1million to FRC for certification of financial statements with expired FRC numbers.
Sterling Bank was fined N30million for non-processing of e-Form M for the importation of goods and N4million for the recruitment of staff prior to CBN approval. The bank was also fined N2 million for facility exposure to insider related higher than the limit and not obtaining BVN on inactive credit customers 2017 RBS examination.
UBN contravened some banking regulations in the course of the year and the contravention attracted a penalty of N10 million in 2020.
The bank was sanctioned for its involvement in the importation of textile using foreign exchange from Nigerian foreign market.
The sanctioned breakdown in 2018 revealed that Zenith bank in 2018 was N2million for the application of excess charges on status enquiry; N4million for opening of branch in Dubai by Zenith Bank without CBN approval and for failing to discharge penalty; N4million sanctioned for dismissed/terminated staff and additional penalty for failure to discharge within the stipulated timeframe
In the same year, Stanbic IBTC Holdings was sanctioned N2million by CBN on repatriation of export proceeds; N2million sanctioned was issued on the bank for issuing payment cards with validity less than 3 years between December 2015 and October 2016 in contravention of section 3.13 of the CBN guidelines on card issuance and usage in Nigeria dated May 2014; N2million for contravening the provisions of section 30(8) of BOFIA 1999 as amended and CBN circular reference BSD/1/2003 dated February 25, 2003 by not reporting 37 Public Sector accounts; N2million sanctioned was imposed for launching and deploying a verve prepaid debit card without prior approval of CBN in contravention of section 3.2 of the CBN guidelines on card issuance and usage in Nigeria dated May 2014.
Other sanctions on Stanbic IBTC in 2018 are penalized N100,000 on the group by the Central Bank of Nigeria (CBN) & NOTAP during the period as follows: Penalty fees to NOTAP for Infosys FCM implementation agreement submitted for approval more than 30 days from the effective date of agreement.; N2million over contravention of the CBN directive on Repatriation of export proceeds; N2million for the bank to accept wrong identification documents used by some customers were not in line with the CBN circular FPR/DIR/CIR/GEN/02/001 on the requirements of three tiered KYC.; N2million for the Bank’s new current account customers were not screened against the credit bureau consolidated data base of dud cheque issuers before their accounts were uploaded and Dud cheque issued by customers over the counter were not reported to the credit bureau and the Credit Report Management System; penalty N1,885,852,847.46 arising from CBN investigation on “irregular” Certificates of Capital Importation (“CCI’s”) issued to MTN Nigeria Communications Limited (MTN Nigeria), between 2007 and 2015 and N2million on the Bank for not obtaining BVN from 5,700 PBB borrowing account holders in contravention of the provision of CBN Circular Reference BSP/DIR.GEN/CIR/01/015 of October 21, 2014.
FBN Holdings in 2018 was sanctioned N1.65million by SEC for late submission of 2017 Annual Accounts; N2million to the Nigeria Stock Exchange for late submission of 2017 Annual Accounts.
Also, its subsidiary, First Bank of Nigeria Limited was sanctioned N8 million by CBN for failure to implement full reversal of excess charges on customer accounts; N2 million to CBN for exceeding regulatory single obligor limit as contained in the June 2017 RBS report; N2 million to CBN for delay in payment of fine in respect of excess over single obligor limit exception as contained in the June 2017 RBS report; N4 million to CBN for the non-restructuring of credits to Bank customer in line with CBN’s mandate; N2 million to CBN for failure to provide KYC documents of customers involved in Fraud Case (TradeFair Branch and Awka Branch); N2 million was imposed on the bank by CBN for failure to implement external auditor’s recommendation as per December 2016 Management Letter.
FBNQuest Merchant Bank Limited was sanctioned N2million by CBN for late submission of FINA returns; N2,000,000 to CBN for late submission of PEP returns to CBN and NFIU and N5million to Financial Reporting Council (FRC) for contraventions of certain Sections of FRC Act.
However, GTCO in 2018 was sanctioned N2million for its 2016 FX failure examination findings -CBN SMIS; N14million for 2016 & 2017 Risk Based Examination findings; N6million failure on CBN Spot Check Examination N6,000,000 and N2 million for breach f credit limit.
Union Bank of Nigeria was sanctioned N2million for Non-refund of SMS charges on dormant accounts; N 2million on excess Lending Rate Charged above the Approved Maximum Limit ; N2million for Non-inclusion of investigation/Disciplinary Committee reports in the Returns on dismissed/terminated staff; N2million on late filing of 2017 audited financial statements; N2million for its failure to obtain prior written approval of the CBN before engaging in capital restructuring and N2million on late resolution of ATM dispense errors.
Wema Bank sanctioned N2million on foreign exchange examination, another N2million penalty on consumer protection compliance N4million penalty on 2017 annual report and financial statements and N800,000 penalty on late filing of 2017 annual report and financial statements.
