CBN Reads Riot Act On False Rendition Of Returns By Banks

CBN Reads Riot Act On False Rendition Of Returns By Banks
The Deputy Governor (Corporate Services), CBN, Mr. Adebayo Adelabu,

The Central Bank of Nigeria (CBN) has threatened to impose more penalties on banks and other financial institutions that render false returns as well as those that do not comply with its policies.

The Deputy Governor (Corporate Services), CBN, Mr. Adebayo Adelabu, stated this at the 2015 stakeholders’ forum of the Bank Directors Association of Nigeria (BDAN) held in Lagos on Tuesday.

While stressing that rendition of false returns by banks would no longer be tolerated by the central bank, Adelabusaid such act affects national planning and other data required for taking crucial economic decisions.

The central bank recently fined three commercial banks for not remitting the stipulated funds into the treasury single account (TSA).

“There is no amount of penalty that is imposed on a bank that rendered false returns that is too much. The TSA has come to stay and the CBN will make sure it works. I know that the huge penalties that the CBN levelled on a couple banks recently have been a source of concern and subject of discussion everywhere.

“Bank directors need to pick interest in this. All we were used to in the past was the recommendation from BOFIA. All they would tell you is ‘let’s break the law and pay CBN N2 million in line with the Bank and Other Financial Institutions (BOFIA) Act.’

“But today, we are in an era of zero tolerance. Some of the offences that those banks committed actually warranted even the chief executive officers to be removed. Not just the CEOs, the chief finance officers, treasurers and even the entire management board. But we know the systemic implication of this on the industry at this crucial time of our economy. But we believe with the heavy fines, the board should ask questions,”Adelabusaid.

Speaking further, the deputy CBN governor said: “The primary regulator as far as the industry is concerned is the Central Bank of Nigeria. Today, the fear of the CBN is the beginning of wisdom. Unlike we used to have in the past, it is no longer the headmaster versus pupils relationship, today, it is a collaborative relationship. But the central bank as the regulator is being misunderstood most of the time.

“Banks have to proactively manage their relationship with the central bank and there are various ways of doing that. But what annoys most regulators most is for bank directors to feign ignorance of what their executive management is doing. As far as the CBN does not allow board members to be involved in the day-to-day running of banks, we expect that there would be mechanisms put in place to ensure that you (bank directors) are on top of the banks so that nothing will take you by surprise.”

He also urged bank directors to always take out time to study CBN’s periodic audit report on their respective institutions so as to be better informed on the events in the banks.

While speaking on the economy, Adelabu, who represented the CBN Governor, Mr. Godwin Emefiele, at the event, noted that the Nigerian economy “is a very tough economy to manage,” adding that as a result of the slump in price of crude oil, “the country is in a difficult situation.”

“Whether we like it or not, we have become poorer than we used to be and we all know the reason for that- the price of the only product that we rely on has dropped. Today, our reserves is a little below $30 billion and we know the volatile funds that are in there. So, if there is any circular that you feel is affecting your business, please bear with us,” added.

Check Also

Two problems with naira redesign – Moghalu

Two problems with naira redesign – Moghalu

  A former Central Bank of Nigeria’s Deputy Governor, Kingsley Moghalu, has expressed dissatisfaction over …

Leave a Reply

Your email address will not be published. Required fields are marked *

× Get News Alert