Three financial services regulators in the country have sanctioned 10 of the nation’s lenders to the tune of N2.5bn for committing various market infractions, findings by Sunday PUNCH have shown.
Specifically, the Central Bank of Nigeria, Securities and Exchange Commission and Financial Reporting Council of Nigeria have sanctioned Guaranty Trust Bank Plc, Zenith Bank Plc, Access Bank Plc, FBN Holdings Plc, FCMB Group and five others for diverse market infractions.
The financial violations range from non-compliance with anti-money laundering procedures, non-compliance with ATM installation procedures, the opening of foreign branches without regulatory approval, and improper handling of customers’ accounts, among others.
In line with regulatory requirements, the various offences and the amount of fines were disclosed in the lenders’ audited results for the period ended December 31, 2020, submitted to the Nigerian Stock Exchange.
In the year under review, the CBN sanctioned FBN Holdings, GTBank, Access Bank, Stanbic IBTC Holdings and Union Bank of Nigeria, United Bank for Africa Plc, and Fidelity Bank Plc to the tune of N1.69bn for violating its policy on textile importation using foreign exchange sourced from the Nigerian market.
The CBN in March 2019 imposed foreign exchange restriction on the importation of textile and textile materials into the country.
The CBN Governor, Mr Godwin Emefiele, announced the foreign exchange restriction at a meeting with textile manufacturers, and cotton farmers.
He directed banks and bureaux de change to stop selling foreign exchange to such importers with immediate effect, adding that stopping textiles imports was key to revamping the local industry.
According to the financial reports, UBA was fined N636m by the CBN in 2020, while Access Bank was fined N464.23m in 2020.
Fidelity Bank was sanctioned five times by CBN with a sum of N446.9m in 2020. GTBank was fined a total of N237m for committing three market infractions.
From the 2020 audited results, Stanbic IBTC Holdings was sanctioned N277m by the CBN, while FBN Holdings’ total fine in 2020 was N223.4m.
FCMB Group was also fined N183.37m by the CBN, SEC and the FRC.
UBA was heavily fined in 2020 for failing to adhere to CBN’s policy on textile importation. The bank was sanctioned N623m for failing to review the operation of its customers’ domiciliary accounts relating to foreign exchange transactions on textile importation.
The bank in its audited financial statement for the half year ended June 30, 2020, reported a sanction of N552m over infractions on the processing of import transactions. Also in 2020, the bank was sanctioned N8m relating to corporate social responsibility donations.
In addition, the pan-African bank was fined N3m and N2m for incomplete documentation on customer account opening and late refund to customers respectively.
Access Bank paid a sum of N220m in respect of sourcing for foreign exchange from the Nigerian foreign market for the importation of textile.
It was fined the sum of N57m for its failure to comply with the CBN’s anti-money laundering terrorism financing code for the period 2018 to March 2019.
The bank also received a N42.8m fine in respect of failure to comply with the CBN’s Anti–Money Laundering/Combating Financing of Terrorism regulations and Know Your Customer policies in a transaction.
It also got a N2.2m fine for failure to obtain Nigerian Stock Exchange approval prior to the announcement of the Notice of Meeting of Board of Directors of the Bank.
While it was fined the sum of N1m in respect of operating a Tier 3 account without valid means of identification, it also got a fine of N10m for inadequate KYC. It has also fined N131.23m in respect of the contravention of the CBN foreign exchange manual and TED ACT.
Fidelity Bank was sanctioned N2m for foreign exchange infraction in textile. Also, a N2m sanction was imposed on the lender for substituting Open Market Operations Bill prior to maturity by the bank.
The CBN also sanctioned Fidelity Bank with a N410m fine for foreign exchange infraction in textile importation as directed by CBN.
In addition, the bank paid the CBN N500,000 on trade infraction by the bank and N32.4m for violating foreign exchange infraction of the apex bank.
From GTBank’s audited results, the CBN imposed a total sanction of N237m on the bank over three market infractions.
The breakdown revealed that GTBank was sanctioned N186m for failure to conduct a spot check examination on domiciliary account balances of customers.
Also, the bank was sanctioned N81m and N6m 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 N11.4m fine by the CBN as relating to customer domiciliary account operations. However, in 2019, the bank paid a total of N21m sanctions in four market infractions to CBN.
Zenith bank paid N15m for improper classification of corporate accounts and N2m for non-compliance with anti-money laundering procedures.
In the same year, the bank paid N2m 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 N277m in 2020.
The CBN imposed a N32m 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 N152m 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 N20m on the bank for failing to report some alleged suspicious transactions. The SEC imposed a total penalty sum of N3m 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 N2m 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 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 N43.2m 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 N12.76m 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 N52m in February 2020 for involvement in textile importation using foreign exchange source from the Nigerian market
The bank paid a penalty of N2m in February 2020 for non-implementation of Two-Factor Authentication on FirstConsole as of June 2018.
An additional penalty of N40m was paid in February 2020 in respect of foreign exchange market in textile importation in the period.
A penalty of N20m 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 N2.5m 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 N1m to FRC for certification of financial statements with expired FRC numbers.
Sterling Bank was fined N30m for non-processing of e-Form M for the importation of goods and N4m for the recruitment of staff prior to CBN approval. The bank was also fined N2m 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 N10m in 2020.
The bank was sanctioned for its involvement in the importation of textile using foreign exchange from Nigerian foreign market.