Jobs of some bank Chief Executive Officers (CEOs) and their Chairmen
may soon be on the line. A Central Bank of Nigeria (CBN) directive has
warned that bank CEOs and chairmen who fail to publish their
institutions’ accounts 12 months after the end of the financial year
will be removed from office.
The order was contained in the CBN’s Monetary, Credit, Foreign Trade
and Exchange Policy Guidelines for Fiscal Years 2014/2015 released at
the weekend.
The regulator will continue to hold the Board chairman and CEO of a
defaulting bank directly responsible for any breach and impose
appropriate sanctions, which may also include barring the CEO or
his/her nominee from participation in the Bankers’ Committee and
disclosing the reason for such suspension.
In accordance with Bank and Other Financial Institutions Act -BOFIA
(2004)-banks are required, subject to the written approval of the CBN,
to publish not later than four months after the end of each financial
year, their audited financial statements (balance sheet, and profit
and loss account) in a national daily newspaper.
The CBN said to facilitate the implementation of consolidated
supervision, all banks, discount houses and their subsidiaries shall
continue to adopt December 31, as their accounting year end.
The CBN also said other sanctions may include suspension of the
foreign exchange dealership licence of the bank and its name beingsent
to the Nigerian Stock Exchange, where such offender is a public quoted
company.
The CBN said it would continue to adopt the risk-based supervision
(RBS) approach in the supervision of institutions under its regulatory
purview. “The objective of the RBS approach is to provide an effective
process to assess the safety and soundness of banks and other
financial institutions. This is achieved by evaluating their risk
profile, financial condition, risk management practices and compliance
with applicable laws and regulations,” it said.
It enjoined banks to pursue profitability in their business models
through efficient operations, adding that they should charge
competitive rather than excessive rates of interest in the course of
their transactions. The lenders are also to disclose their prime and
maximum lending rates as fixed spreads over the Monetary Policy Rate.
The CBN said it would sustain the use of macro-prudential regulation,
and top-down quarterly solvency and liquidity banking industry stress
testing, in assessing the health of banks. Similarly, banks would
continue to conduct and submit to the CBN their quarterly bottom-up
solvency stress testing report.
