CBN opens up on N8.8b TSA fines

The Central Bank of Nigeria (CBN) on Tuesday justified its decision to imposed N8.819 billion fines on three lenders including First Bank of Nigeria Limited, United Bank for Africa (UBA) Plc and Skye Bank Plc.
CBN Director, Corporate Services, Adebayo Adelabu who spoke during the Bank Directors’ Association of Nigeria (BDAN) stakeholders’ forum held in Lagos, noted, that penalties for regulatory breaches are at the discretion of the CBN.
As the regulator, CBN, he maintained, acted based on the gravity of the offence committed by the lenders.
Speaking on the theme: ‘Oversight functions of the board: Effectively managing key external relations’, he explained that although the Bank and Other Financial Institutions Act (BOFIA) stipulates specific penalties for offences, the law also makes room for open-ended penalties, where the CBN is allowed to act based on what it thinks is the right punishment for offenders.
“Some of the offences are open-ended depending on gravity of offences but it is left at the discretion of the regulator. But the CBN has been considerate in fining the banks,” he said.
The CBN had kept its promise to sanction commercial banks that failed to comply with the federal government’s directive on the remittance of government revenue to the Treasury Single Account (TSA) by fining First Bank and UBA the sum of N4.819 billion.

Read also: TSA fine: First Bank, UBA lobby CBN

The CBN imposed a penalty of N1,877,409,905.12 on First Bank, UBA was fined N2,942,189,651.45 for its failure to comply with the federal government’s policy.
First Bank allegedly concealed N37,548,198,102.41 belonging to the Nigerian National Petroleum Corporation’s (NNPC) instead of remitting it to the TSA as directed.
The UBA allegedly concealed N58,843,793,029.05 of NNPC funds, which attracted the penalty. The source explained that the penalty was the equivalent of five per cent of the funds they failed to remit respectively.
The CBN has also imposed a fine of N4 billion on Skye Bank for concealing funds belonging to Ministries, Departments and Agencies (MDAs). The apex bank gave Skye Bank a fine of N4,005,228,976.35, which it said represents 10 percent of the concealed funds belonging to Federal Government MDAs.
Skye Bank allegedly failed to report MDAs’ balances amounting to N40,052,289,769.47 as at October 23, 2015, more than a month after the TSA deadline had expired on September 15.

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