Members of Parliament (MoP) in the House of Representatives on Thursday expressed overwhelming support for the bill which seeks to reduce the tenure of chief executive officers of financial institutions in Nigeria to 10 years.
The legislative framework also seeks to disqualify and exclude certain individuals from management of banks operating in Nigeria.
The move was initiated to further instill checks and balances in the administration of the financial sector as well as set upper limit to guard against the sit-tight syndrome that has plagued the Nigerian banking system for decades.
Analysts have equally canvassed for similar guideline be issued to also take into cognizance the terms of contract of non-Executive directors.
The support was demonstrated during the consideration of the bill which seeks to amend the Banks and Other Financial Institutions Act, 2004 and to re-enact the Banks and Other Financial Institutions Act, 2017, and for matters connected therewith,’ as co-sponsored by Jones Onyereri and Betty Apiafi.
According to the brief presented by Onyereri, chairman, House Committee on Banking and Currency, “section 44 makes provision for disqualification and exclusion of certain individuals from management of banks.
“It further provides that the Chief Executive Officer (CEO) of a bank appointed by the Board of Directors under such terms and conditions approved at the Annual General Meeting (AGM) shall not serve as a CEO for a cumulative period of more than 10 years.
“Section 44(6) imposes a fine not less than N50 million on any bank that contravenes the provisions of this section and a fine of not less than N50 million or imprisonment for a term not less than 3 years or both on any director, manager or any other officer of the bank who contravenes the provisions of this section.”
According to him, section 47 of the bill also proposed a fine of not less than N50 million on any bank that contravenes any provisions of the Act which an offence or penalty is not expressly provided for.
Anybody or corporate organization that operates a specialized bank without a licence is liable to a fine not less than N50 million and in any other case a fine not exceeding N20 million or imprisonment for a term not exceeding 10 years or both imprisonment and fine, as stipulated in section 51 of the Act.
Onyereri explained that the bill when passed into law will help to regulate banking and other income institutions by prohibiting the carrying on if businesses in Nigeria except under a license and by a company incorporated in Nigeria.
This, when implemented will reduce the proliferation of wonder banks and loss of depositors/investors funds; enthrench corporate governance as well as streamline the operations of banks and others financial institutions in Nigeria to confirm to best practices as obtainable in other climes.
“Section 2(2) of the bill imposes a penalty of not less than N50 million and imprisonment for a term of not less than 10 years or both against any person that transacts a banking business without a banking license.
“Section 5(4) provides for a fine of not less than N20 million against any director, manager or officer of the bank that fails to take reasonable steps to ensure compliance with any of the conditions of the licence.
“Section 16(2) imposes a fine of N20 million against any manager or officer of a bank who fails to disclose any personal interest in any advance loan or credit.
“Section 16(11) imposes a fine of N50 million against any director that fails to disclose any property whether directly or indirectly owned that conflicts with his duties or interests as a director of a bank.
Section 18(8) provides for a fine of N50 million and five years imprisonment or both fine and imprisonment upon conviction on any bank officer that grants facilities exceeding 20% of the banks paid up capital to persons/organizations without authority of the board.
“Section 22(2) provides for a fine of N10 million against any director, manager, or officer of a bank who fails to take reasonable steps to ensure that the bank keeps proper books of account with respect to all transactions of the bank and imposes a fine of N20 million on any director, manager or officer of a bank that willfully caused a default by the bank in respect of the provisions if this section.
“Section 25(6) imposes fine of N2 million for every day a bank fails to publish on two daily newspapers its detailed financial statements.
“Section 27 also provides for the appointment, power and report of auditors. It further imposes a fine of N50 million against any auditor approved under this section that contravenes the provisions of this section and a term of imprisonment not exceeding five years in the partners if the auditor is a firm.
“Section 28(5) imposes a fine if not less than N20 million on a bank that fails to provide the required books, documents or information required by a CBN appointed examiner and an additional fine of N2 million for every day the offence continues,” Onyereri said.
Following the overwhelming support enjoyed by the bill, Speaker Yakubu Dogara who presided over the plenary, referred it to the House Committee on Banking & Currency for further legislative action.
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