Diamond, Sterling, Four Other Banks Fined For Contravening BOFIA

diamond bank

Six commercial banks paid N392.77 million in fines to the Central Bank of Nigeria (CBN) in 2013 for contravening various aspects of Banks and Other Financial Institutions Act (BOFIA).

Diamond Bank, First City Monument Bank (FCMB) and Sterling Bank are among the banks that fell foul of the CBN law and were penalised accordingly.

Sterling Bank paid N52.97 million fine for promoting  management officials without CBN’s approval and foreign exchange examination infraction, among others.UBA was fined N43.70 million for opening a branch without prior approval of CBN, improper reclassification of public sector deposits and appointment of staff without CBN approval, among others.

Diamond Bank paid N7.99 million fine for numerous infractions.

A breakdown of Diamond Bank infractions showed that the bank paid N2 million fine for the delay in refunding a customer’s 827,223 dollars as directed by the CBN.

It was fined N4 million for promoting two senior management personnel without the approval of the CBN.

The bank was also ordered to pay N1.99 million for withholding a customer’s funds for 26 days after the promoters of the customer had written the bank that they were no longer interested in a facility.

Similarly, FCMB Group was fined N6.1 million for delayed disbursement for 20 days to the beneficiary under Commercial Agriculture Credit Scheme, among others.

Skye Bank was fined N6 million for failure to obtain CBN’s approval to promote a senior staff and under reporting of regulatory returns on public sector deposits.

It was also fined for failure to update documentation on a customer’s account.

Speaking on the contraventions, Mr Sunny Nwosu, National Coordinator, Independent Shareholders Association (ISAN), urged the management of banks to be more careful and avoid wasting shareholders’ funds.

Nwosu described commercial banks’ contraventions as unfortunate, stressing that the huge fines had robbed shareholders of enhanced dividends during the year.

Mr. Bayo Adeleke, ISAN Secretary, commended the CBN for its actions to ensure that commercial banks complied with rules and regulations of engagement.

Adeleke said that such penalties should not be viewed from income generating perspective, but to enhance good corporate governance and adherence to standards.

He advised regulators to be proactive, while banks should maintain a clean slate