CBN, SEC Reveal why they sanctioned 10 Nigerian banks

• The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have sanctioned 10 banks for infractions
• The banks include Access Bank, Zenith, UBA, First Bank and six other commercial banks
• The development comes as Nigerian banks have begun migrating their platforms to secure funds, causing transaction hitches for customers

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Regulatory bodies overseeing activities of commercial banks in Nigeria have fined 10 banks for various infractions on foreign exchange guidelines and other offences.

The agencies, which include the Central Bank of Nigeria and the Securities and Exchange Commission, fined the financial institutions over N1.502 billion as penalties in the first six months of 2024.

Olayemi Cardoso's central bank sanctions 10 financial institutions Credit: Bloomberg/Contributor
Source: Getty Images

List of sanctioned banks

The violations underscore Nigerian financial institutions' ongoing challenges in complying with regulatory bodies' guidelines.

The banks include First City Monument Bank (FCMB), Access Bank, Stanbic IBTC, Zenith, UBA, Guaranty Trust Bank, Sterling Bank, Fidelity Bank, First Bank and VFD Bank.

A breakdown of the banks’ financials for June 30, 2024, filed with the SEC, shows the amount paid to the CBN and SEC by the various banks.

According to reports, Zenith paid the highest fine of N427 million in the review period, Access paid N300 million, UBA paid N279 million, and Stanbic paid N229 million for infractions.

Others include GTBank, which paid N188 million; Fidelity, which paid N30.11 million; FCMB, which paid N24.15 million; Sterling, which paid N9 million; First Bank, which paid N8 million; and VFD, which paid N8.1 million.

CBN defends banks from attacks

CBN has defended Nigerian banks, disclosing that Nigeria’s financial system and institutions are sound and that it conducts periodic stress tests on them to determine potential vulnerabilities.

The apex bank disclosed that the tests are part of its strategy to guard the financial system and protect depositors’ funds.

It said the tests help to detect and address potential risks before they fester and impact the financial system.

SEC issues fines

The report said that the SEC fined Stanbic IBTC Asset Management Limited N2.4 million for not submitting the approval of the third Supplement Trust Deed, Custody, and Property Management agreement.

It also fined the company for alleged violation of the rules on fund management, which prohibit fund/portfolio managers from developing a product, discretionary or non-discretionary portfolio/fund, without the SEC’s approval.

Commercial banks migrate to more robust platforms

Nigerian banks have been migrating their platforms to protect depositors' funds.

Commercial banks’ tech upgrades in the past few weeks have caused severe concerns to customers, sending panic into bank customers in rural areas.

The situation is set to get worse as more banks announce that they will be upgrading their technology infrastructure in the coming weeks.

Zenith Bank apologises to customers

According to reports, Sterling Bank customers tasted the bitter pill of frustration after the bank began migrating its systems from T24 to SEABaaS, a new, locally-developed core banking application, causing disruptions that lasted for days.

Zenith Bank stated on October 1, 2024, that it was undertaking routine maintenance on its IT infrastructure to improve service quality.

Media sources disclosed that the tier-1 bank migrated its core banking platform from Phoenix to Oracle’s Flexcube, thereby shutting out many customers as the operations lasted several days.

The bank later apologised for the inconvenience it caused its customers.

CBN orders Nigerian banks to refund N7.05bn

Legit.ng earlier reported that CBN has stated that following its intervention, banks in the nation have returned around N7.05 billion and $714,569.03 to their customers.

In just one year, the apex bank said it addressed 19,988 customer complaints within eight months.

This was revealed on Tuesday in the CBN UPDATE September Special Edition, the apex bank's monthly bulletin posted online.

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Source: Legit.ng