Stanbic IBTC’s fines, totaling N229 million, were linked to infractions involving the CBN, the National Pension Commission, and SEC.
Abuja, Nigeria – In a sweeping regulatory action, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have sanctioned 10 deposit money banks for violations of foreign exchange (forex) guidelines and other regulatory infractions.
The banks were fined a total of N1.502 billion in the first half of 2024, underscoring the persistent challenges financial institutions face in adhering to compliance standards.
According to financial reports filed with the Nigerian Exchange, Zenith Bank faced the highest penalty, paying N427 million during the period. Access Bank followed with a N300 million fine, while United Bank for Africa (UBA) was sanctioned N279 million. Stanbic IBTC incurred fines totaling N229 million.
Other banks penalized include Guaranty Trust Bank (GTB) with N188 million, Fidelity Bank (N30.11 million), First City Monument Bank (FCMB) (N24.15 million), Sterling Bank (N9 million), First Bank (N8 million), and VFD Bank (N8.1 million).
The fines primarily stemmed from contraventions related to foreign exchange operations, anti-money laundering procedures, and failure to comply with various directives issued by regulatory authorities. Specific violations included the wrongful warehousing of government funds, non-compliance with complaints resolution directives, and infractions related to cyber security and customer onboarding documentation.
Detailed Infractions
Zenith Bank’s infractions included the late resolution of a customer’s complaint, non-compliance with anti-money laundering rules, delayed compliance with CBN directives, and lapses in cyber security measures.
Access Bank was penalized N300 million for the mismanagement of funds received from a government agency.
Stanbic IBTC’s fines, totaling N229 million, were linked to infractions involving the CBN, the National Pension Commission, and SEC. This included penalties for non-compliance with fund management regulations, improper portfolio management, and failure to submit required documentation. The bank also faced a hefty fine of N176 million for unresolved customer complaints.
UBA’s N279 million sanction was related to violations of CBN’s foreign exchange policies and the late submission of a cybersecurity report.
GTB faced fines totaling N188.25 million for forex violations, non-compliance with consumer protection regulations, and infractions revealed during the CBN’s mystery shopping exercise. The bank was also fined for breaches in foreign exchange market guidelines in Ghana and Rwanda, paying an equivalent of N1.297 billion in Ghana and N311,000 in Rwanda.
Concerns Over Financial Transparency
The regulatory crackdown comes amidst growing concerns about the financial practices of some banks. Civil society organizations, including the Arewa Consultative Movement, have recently raised alarms about the lack of transparency in the financial operations of a leading tier-one bank. The group has called for a forensic audit of the bank’s financial records, particularly after the bank posted record-breaking profits.
In response, the CBN issued a statement reiterating its commitment to safeguarding the financial sector through regular stress tests, which are designed to detect potential vulnerabilities in banks. The apex bank emphasized that these tests are crucial for protecting depositors and maintaining the stability of the financial system.
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