Seven Deposit Money Bank quoted on the Nigerian Stock Exchange (NSE) paid about N144.99 million as fines to regulators in 2018 for their various contraventions.
Investigations showed that the fines were paid to the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) and the Financial Reporting Council and Corporate Affairs Commission.
The affected banks are: Sterling Bank, United Bank for Africa (UBA), Zenith International Bank, GT Bank, Access Bank, FBN Holdings and Fidelity Bank.
A breakdown of the figure as contained in the banks’ annual reports showed that FBN Holdings and its subsidiaries, First Bank of Nigeria, FBN Quest Merchant Bank and FBN Insurance Limited, paid the highest fine of N32.65 million during the period under review.
UBA came second with N30 million fine to the apex bank for various offences.
On the other hand, GTBank was fined N24 million during the period while Access Bank paid N20 million.
Sterling Bank, Fidelity Bank and Zenith International Bank paid N15.33 million, N13.01 million and N10 million, respectively for various offences during the review period.
Commenting on the contraventions, Prof. Sheriffdeen Tella of Economics department, Olabisi Onabanjo University, Ago-Iwoye, Ogun, said the preference of banks to pay penalty instead of complying with CBN directive was an age-long problem.
Tella said, “Banks weigh the cost of complying against paying penalty and decide to pay if the former is quite high.”
“There was a time the banks would prefer to pay penalty than lend to the agriculture sector because of the failure of many farmers to pay back due to bad weather, long gestation period and possibly mismanagement,” he added.
Tella also attributed the development to delay in responding to requests by some banks due to unnecessary bureaucratic measures.
“Increasing the contravention fee may not be helpful but a meeting of the stakeholders in the banking sector arranged by the CBN should also be helpful,” he noted.
Mr Moses Igbrude, Publicity Secretary, Independent Shareholders Association of Nigeria, said shareholders were not comfortable with the various fines paid by the financial institutions.