"Impose Appropriate Sanctions": CBN Threatens to Sack Bank Chairmen, CEOs, Gives Reason
- The CBN has announced that bank chairmen and CEOs risk immediate dismissal if they fail to publish year-end financial reports
- The apex bank mandates banks to publish their audited financial statements within three months of the end of each financial year
- It said the move to dismiss non-compliant bank top heads is supported by the Banks and Other Financial Institutions Act (BOFIA) 2020
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
The Central Bank of Nigeria (CBN) has announced plans to take strict action against bank Chief Executive Officers (CEOs) and chairmen who do not release their annual financial statements within 12 months of the financial year's conclusion.
The apex bank mandated that such officials should be dismissed immediately.
Source: UGC
This directive was outlined in the CBN’s 2024-2025 Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines, which were published on its website.
CBN to sanction bank chiefs for breach
The CBN mandates that banks and other financial institutions, with prior written approval from the apex bank, must publish their audited financial statements within three months of the end of each financial year.
These statements are to be published in two national daily newspapers widely distributed in Nigeria.
Additionally, the CBN specified that, for the purpose of streamlined consolidated supervision, all banks and their subsidiaries must maintain December 31 as their accounting year-end.
The CBN stated that senior officers of any bank violating this policy will be held responsible for the breach and outlined various sanctions that may be imposed on them.
The report reads:
“The CBN shall continue to hold the Board Chairman and Managing Director/Chief Executive Officer (MD/CEO) of a defaulting bank directly responsible for any breach and impose appropriate sanctions which may include-barring the MD/CEO or his/her nominee from participating in Bankers’ Committee and disclosing the reason for such suspension; suspension of the foreign exchange dealership licence of the CBN and its name sent to the Nigerian Exchange Group (in the case of a public quoted company); and removal of the Chairman and MD/CEO from office if the accounts remain unpublished for 12 months after the end of the bank’s financial year.”
In the section addressing the publication of annual financial statements, the apex bank stated that its move to dismiss non-compliant bank CEOs and chairmen is supported by the Banks and Other Financial Institutions Act (BOFIA) 2020.
The likelihood of this scenario occurring is minimal, as many banks, most of which are publicly listed, have strong corporate governance compliance ratings.
Existing regulations at the stock exchange, where these banks are listed, require publicly traded companies to submit their audited financial reports no later than 90 days after the end of the financial year or within 30 days following the end of each quarter.
Regulatory data indicates that banks have a solid track record of adhering to these stock market rules.
It should be noted that the CBN has the power to sanction bank heads or dissolve their boards when they fail to comply with the financial sector's policies.
The CBN recently warned commercial banks that they would be fined N100,000 daily if they fail to address customer complaints within 72 hours.
Presidency clarifies CBN governor's reported sack
Earlier, Legit.ng reported that the presidency refuted claims that President Bola Tinubu had asked CBN Governor Olayemi Cardoso to resign.
There were speculations that Tinubu had advised Cardoso to step down before his August trip to China, citing his inability to stabilize the naira, which had hit record lows.
Presidential spokesperson Bayo Onanuga addressed the matter in a statement on X on Tuesday night, dismissing the reports.
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Source: Legit.ng
