The Central Bank of Nigeria (CBN) today disclosed that it had imposed a fine of N5.87 billion on four banks under its regulatory purview for regulatory infractions.
In addition, the apex bank also directed the affected lenders, namely Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank to refund the sum of $8,134,312,397.63 for what it described as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’.
The CBN’s Acting Director Corporate Communications, Isaac Okorafor, who disclosed this in Abuja said that the actions of the regulatory banking institution became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation, CCIs, issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March this year
According to him, the CBN based on its findings has therefore asked the managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria.
Figures provided by the apex bank on the four lenders’ shady transactions showed that the highest fine of N2,470,604,767.13 was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined the sum of N1,885,852,847.45.
Also, Citibank Nigeria was penalized in the sum of N1,265,541,562.31 while Diamond Bank was directed to pay the sum of N250 million for violating extant rules.
Okorafor explained that investigations on the irregular certificates of Capital Importation, CCIs, issued on behalf of some offshore investors of MTN Nigeria Communications Limited reflected that the sum of $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs.
He confirmed also that the sums of $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively, during the period 2007 and 2015.
Based on the findings, he said that the CBN had directed the affected banks to immediately refund the respective sums to the CBN.
This is even as the spokesman disclosed that the CBN investigations showed further that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the company.
While confirming that the investigations by the apex bank took a while in order to carry out thorough inquiry and give fair hearing to all parties involved, Okorafor advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations of Nigeria in their foreign exchange transactions.
He cautioned that failure by the managements of banks and companies to abide by the existing guidelines would be appropriately sanctioned, which sanctions may include denial of access to the Nigerian foreign exchange market.
