SEC, CBN Sanction 10 Firms For Regulatory Infractions, Fines Hit N1.5bn

In a decisive move to uphold compliance standards, the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have imposed fines totalling N1.502 billion on 10 deposit money banks (DMBs) and other listed organisations for various regulatory violations.

These penalties were enforced within the first half of 2024, shedding light on the persistent challenges faced by financial institutions in adhering to regulatory frameworks.

The penalties arose from breaches of foreign exchange guidelines, delayed filings, and other compliance-related offences. A detailed analysis of financial statements for the period ending June 30, 2024, filed with the Nigerian Exchange (NGX), revealed the sanctions imposed on some of Nigeria’s leading banks.

The affected institutions include First City Monument Bank (FCMB), Access Bank, Stanbic IBTC, Zenith Bank, United Bank for Africa (UBA), Guaranty Trust Bank (GTB), Sterling Bank, Fidelity Bank, First Bank of Nigeria, and VFD Group.

Zenith Bank Plc bore the heaviest fine of N427 million, primarily for infractions such as anti-money laundering lapses, delayed compliance with CBN directives, and cybersecurity breaches. Access Bank followed with penalties amounting to N300 million, largely for the mismanagement of government funds. UBA paid N279 million for delayed cyber security assessments and foreign exchange policy violations, while Stanbic IBTC incurred N229 million in penalties from the CBN, SEC, and National Pension Commission (PenCom) for various infractions, including fund management rule violations.

Other penalties included GTB’s N188.25 million for foreign exchange policy breaches and consumer protection issues, Fidelity Bank’s N30.11 million, FCMB’s N24.15 million, Sterling Bank’s N9 million, and First Bank of Nigeria’s N8 million. VFD Group was fined N8.1 million for the late filing of results.

Forensic examinations revealed specific infractions that highlighted the systemic vulnerabilities within the sector. For instance, Stanbic IBTC was fined for alleged non-compliance in fund management practices and delayed customer complaint resolutions. Similarly, UBA faced penalties for breaching cybersecurity and foreign exchange protocols, emphasising the increased scrutiny on digital risk management.

Concerns over the transparency of banking operations have been raised by civil society organisations, with petitions calling for forensic audits of certain tier-one banks. These concerns reflect broader apprehensions about accountability in Nigeria’s financial system.

In response to these issues, the CBN reaffirmed its commitment to ensuring financial stability and protecting depositors’ funds. Stress tests and risk assessments remain integral to the CBN’s strategy to preempt systemic risks. In a press statement, the CBN emphasised the importance of these evaluations in maintaining the sector’s resilience.

The penalties serve as a stern reminder of the consequences of regulatory non-compliance. They also highlight the need for financial institutions to strengthen internal controls, risk management practices, and governance structures to meet regulatory expectations.