The Central Bank of Nigeria (CBN), together with the Securities and Exchange Commission (SEC), the National Insurance Commission, NGX Regulation Limited, FMDQ, and the National Pension Commission (PenCom) have imposed fines totalling N678 million on nine financial institutions for various regulatory infractions in 2023.
According to an analysis of the annual reports of the financial institutions, this marks a significant improvement in regulatory compliance compared to 2022, when the fines totalled N6.31 billion, representing an 89.25 percent reduction.
The institutions penalised include major banks such as First Bank of Nigeria (FBN) Holdings, Access Holdings, Guaranty Trust Holding Company, Zenith Bank Plc, United Bank for Africa Plc, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and First City Monument Bank (FCMB) Group.
Zenith Bank, which had no fines in 2022, faced penalties totalling N21 million last year for various infractions, including late submission of returns and unauthorised employment. FBN Holdings also saw a reduction in fines from N26 million in 2022 to N17.26 million in 2023, primarily for late submission of financial statements. Access Holdings notably reduced its fines from N604 million in 2022 to N81.60 million, despite facing multiple penalties from various regulators, including a significant N39.4 million from PenCom for data recapture violations.
The United Bank for Africa and Fidelity Bank also demonstrated improved compliance, reducing their fines to N110 million and N42.96 million, respectively. Conversely, Wema Bank’s penalties increased from N2 million to N61.35 million due to multiple breaches, including cybersecurity and know your customer (KYC) violations. Similarly, FCMB Group’s fines rose to N145.10 million from N70.30 million, largely due to non-compliance with internal policies and regulatory requirements.
Experts attribute the overall reduction in fines to enhanced corporate governance and stricter adherence to regulatory guidelines within the banking sector. Mr. Marcel Okeke, a former Chief Economist at Zenith Bank, highlighted improved risk management and ethical practices as key factors. Segun Ajibola, a professor at Babcock University, noted that the emphasis on corporate governance has intensified, reducing the frequency and severity of infractions. Despite the progress, some stakeholders, like Dr. Anthony Omojola of the Independent Shareholders Association of Nigeria, argue that the total fines remain substantial and call for a review of regulatory frameworks to foster a more collaborative environment between regulators and financial institutions.
