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The Central Bank of Nigeria (CBN) will remove the Chairman and managing director of defaulting banks discount houses (Merchant Banks) from office if their accounts remain unpublished for 12 months after the end of the bank’s financial year.
The regulator made this clear in its Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for 2018 and 2019, released on Friday.
Other sanctions to be meted in this regard are suspension of the foreign exchange dealership license of the bank and its name sent to the Nigerian Stock Exchange (in the case of a public quoted company; and barring the managing director or his/her nominee from participation in the Bankers’ Committee and disclosing the reason for such suspension.
The had directed that banks to, subject to the written approval of the CBN, publish not later than four months after the end of each financial year, their audited financial statements (statement of financial position and statement of comprehensive income) in a national daily newspaper printed and circulated in Nigeria.
The guidelines maintain that all banks, discount houses and their subsidiaries shall continue to adopt December 31, as their accounting year end.
Moses Tule, director, Monetary Policy, CBN, explained that biennial publication is designed to assuage policy ambiguity, demonstrate the direction and policy continuity of the Bank as maintained over time, and to provide prudential guidelines to financial institutions to avoid regulatory capture.
The guidelines permit charging of penalty by Non-Interest Financial Institutions. The CBN’s Financial Regulation Advisory Council of Experts (FRACE) resolved that charging of penalty is only permissible when the customer wilfully delays payment that is due.
However, any income derived from the imposition of such penalty must be given to charity. “Under no circumstance shall the bank, its shareholders or staff benefit therefrom”, says the guidelines.
HOPE MOSES-ASHIKE
