The Central Bank of Nigeria (CBN) is set to take strict action against Chief Executive Officers (CEOs) and chairmen of banks who fail to publish their annual financial statements within 12 months after the close of the financial year.
In a directive issued yesterday, the apex bank instructed that such non-compliant CEOs and chairmen should be dismissed immediately.
This directive is outlined in the CBN’s Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for 2024-2025, which were recently posted on its website.
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However, this scenario is considered unlikely, as most banks—many of which are publicly listed—are known for having strong corporate governance practices.
Stock market regulations, where most banks are quoted, mandate that listed companies submit their audited reports within 90 days of the end of the financial year or 30 days after the end of a quarter. Regulatory reports show that banks generally comply with these stock market rules.
In the section of the report addressing the publication of annual financial statements, the CBN explained that its decision to remove non-compliant bank CEOs and chairmen is supported by the Banks and Other Financial Institutions Act (BOFIA) 2020.
According to the CBN, all banks and financial institutions are required, with the CBN’s written approval, to publish their audited financial statements within three months of the financial year’s end.
These must be published in two national newspapers that are printed and circulated in Nigeria.
Additionally, to ensure effective consolidated supervision, all banks and their subsidiaries must continue to adopt December 31 as their accounting year-end.
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The report reads: “The CBN shall continue to hold the Board Chairman and Managing Director/Chief Executive Officer (MD/CEO) of a defaulting bank directly responsible for any breach and impose appropriate sanctions which may include-barring the MD/CEO or his/her nominee from participating in Bankers’ Committee and disclosing the reason for such suspension; suspension of the foreign exchange dealership licence of the CBN and its name sent to the Nigerian Exchange Group (in the case of a public quoted company); and removal of the Chairman and MD/CEO from office if the accounts remain unpublished for 12 months after the end of the bank’s financial year.”
The Central Bank of Nigeria (CBN) has directed banks to continue adhering to the guidelines on regulatory capital and the supervisory review process of the Internal Capital Adequacy Assessment Process (ICAAP).
In a circular, the CBN noted that the updated guidelines revise the Basel II framework on Regulatory Capital and introduce select Basel III standards.
The apex bank stated that this policy shift aims to strengthen the regulation and supervision of Nigerian banks, promote the adoption of improved risk management practices, and enhance governance structures within the banking sector. It will also further support the implementation of Basel II and III standards.
Additionally, the new guidelines are expected to reduce the risk of excessive leverage within individual banks and the banking system, prevent excessive concentration risks, and improve the resilience of Nigerian banks. This will be achieved by increasing the minimum requirement for high-quality capital that can absorb losses, preserving capital, and promoting the accumulation of capital and liquidity buffers.
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The report added: “Furthermore, the CBN said that to enhance credit risk management in the banking system, banks are mandated to adhere to the provisions that stated provides that the terms and conditions in offer letters and loan agreements be signed by prospective obligors, which shall include an undertaking by the 63 classified as confidential obligor permitting the CBN to have access to and utilise the deposits of the obligor in the banking industry when in default.”
The Central Bank of Nigeria (CBN) stated that it will continue to strengthen the credibility, reliability, efficiency, and security of the national payments system by formulating and enforcing policies, issuing guidelines, and implementing appropriate payment initiatives in collaboration with relevant stakeholders.
It said: “To achieve the vision of creating a payments system that is nationally utilised and internationally recognised, the CBN shall continue to implement the Payments System Vision (PSV) 2025 in the 2024/2025 fiscal years.
“This aims to promote the safety and efficiency of the payments system, deepen financial inclusion, improve the competitiveness of the payment service providers, and facilitate economic activities.”
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