The Nigeria’s Central Bank (CBN) has said that it needs more powers to be able to revoke the licences of erring banks and also to inject funds into any ailing bank.
CBN Governor, Godwin Emefelie, stated this yesterday in Abuja at the commencement of a public hearing organised by the House of Representatives Committee on Banking and Currency on a bill to amend the Banking and Other Financial Institutions Act (BOFIA) and other bills.
Besides, Emefiele, who was represented by the Director, Legal Services Department, Mr. Johnson Akinwunmi, also called for the abolition of shell banks in the country.
He said shell banks, which are institutions that carry out activities where they are not licensed, serve as avenue for money laundering.
The CBN boss added that apart from being used for money laundering, the shell banks distort the banking system and pose a problem to regulatory agencies.
“We wish to propose the introduction of new subsections 3(6) and (7) for the proscription of shell banks in response to the latest recommendations of the Financial Action Task Force (FATF) on money laundering to read: ‘Any bank or its subsidiaries without physical presence in the country where it is incorporated and licensed and is not affiliated to any financial services group that is subject to effective consolidated supervision shall not be allowed to operate in Nigeria and no Nigerian bank or its subsidiaries shall establish or continue any relationship with such bank or subsidiary.’”
Earlier, in his welcome address, Chairman of the House Committee on Banking and Currency, Jones Onyereri, said some of the proposed amendment to BOFIA Act include an increase in the penalty for erring banks and officials.
Onyereri said some of the penalties include, “a fine of N20 million on banks that fail to comply to the conditions of the licence, a fine of N20 million on any director that fails to declare any property he/she owns that runs contrary to the Act.
“A fine of ₦10 million against a director or manager that fails to keep a book of account and a fine of ₦2 million on banks that fail to publish their annual report of general meeting in two reputable national dailies, among others.”
The lawmaker said the increase in the penalties to defaulting banks and their operators would streamline the operations of such banks to conform to international best practices.