• Business - Companies
  • Updated: June 13, 2023

Shareholders Urge Banks To Reduce Regulatory Fines

Shareholders Urge Banks To Reduce Regulatory Fines

Financial institutions have been urged by shareholders to work together to get regulators to reduce fines and other charges paid to them.

The call came as shareholders expressed concerns over the amount financial institutions pay to regulators and to the Asset Management Corporation of Nigeria.

According to Punch, seven Deposit Money Banks paid over N1 billion fine to the Central Bank of Nigeria, Securities and Exchange Commission, National Insurance Commission, Pension Commission and others in the 2022 financial year.

The affected financial institutions are Access Holdings Plc, Wema Bank Plc, Union Bank of Nigeria, Guaranty Trust Holding Company, FCMB Group Plc, Fidelity Bank Plc, and Stanbic IBTC Holdings.

Some of the infractions the lenders were sanctioned for ranged from mismatched details on accounts, foreign exchange guidelines contravention, late rendition of monthly returns, late rendition of daily returns, publication of unapproved adverts, and unethical conduct.

Nornah Awoh, the Chief Equity Analyst/CEO of Palesa Capital Markets Associates, who spoke on the impact of the fines at the last Annual General Meeting of Access Holdings Plc, lamented that the fines and charges paid to the National Deposit Insurance Corporation and AMCON were too much.

“Contravention for some of us is an indication that there is a need for more work.

“If you look at what the NDIC and the CBN are taking from us; both organisations collected from Access Holdings alone, N75 billion.”

According to its 2022 annual reports, Access Holdings paid N52.734 billion as an AMCON surcharge and a deposit insurance premium of N22.53 billion, totalling N75.264 billion.

"We must again join other banks in making sure that this attitude will not continue. Fortunately, there is going to be a new National Assembly.

"We need to do everything humanly possible to make sure that even if AMCON must continue to stay, the ratio that we pay to AMCON must also come down, otherwise, we might as well close all the branches and hand over the bank to AMCON,” he said.

Also speaking, Sunny Nwosu, the Chairman Emeritus of the Independent Shareholders Association of Nigeria, said the Bankers’ Committee and the Association of Bank Directors could spearhead the move to bring down the costs, and in the process, boost returns to shareholders.

“I want the Bankers Committee or the Association of Bank Directors to look into this. Because if you want to do it alone, it may be very punitive.

“You know like the central bank system, when you complain, they increase your penalty but when you go through the Association of Bank Directors, they will know that it is not a single bank that is actually talking about this.

“We are worried. The money is getting too much that is going to the NDIC. AMCON has outlived its usefulness.

“The bankers should work on that and save us from this. So when we ask you for two naira dividends, you will be able to give us. It is very important.”

Meanwhile, the Chairman of the Bank Directors Association of Nigeria, Mustafa Chike-Obi, has said that the charges paid to the NDIC and AMCON need to be reviewed to reduce the operational costs of banks in Nigeria.

"There must be a discussion on the AMCON and the NDIC charges with a pathway to resolving the lingering issues around it.

“The most important issue is a plan that agrees on a cap on the amount chargeable to banks", Chike-Obi said.

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