N5.8bn sanction: Don hails CBN’s action

The Head of Department, Banking and Finance Department, Nasarawa State University, Prof.
Uche Uwaleke, has commended the Central Bank of Nigeria (CBN) for welding the big stick against four Nigerian banks and telecommunications company, MTN.
In a message made available to Blueprint, Prof.
Uwaleke insistd that by sanctioning the affected banks, the CBN has demonstrated that Nigeria’s financial markets have laws which must be complied with by all participants.
The first Professor of Capital market noted that the scale of the infraction could not have been possible without collaborators both from within the Deposit Money Banks (DMBs) and the CBN.
He said: “So, beyond the fines imposed on the banks, it is vital that the EFCC is involved to fish out with a view to prosecuting individuals or professional services firms that aided these banks to perpetrate the use of fake Certificates of Capital Importation, fraudulent conversion of investors’ loans to preference shares and rendering false returns to the CBN.
The implications for the economy are anything but salutary.
The illegal repatriation of forex by these banks would have contributed to the pressure on the exchange rate which negatively impacted production and the general price level.
“The affected foreign banks account for the bulk of capital imported into the country.
According to the NBS capital importation report for Q2 2018, Standard Chartered Bank and Stanbic IBTC were responsible for the bulk of capital importation during the quarter,” he further said.
While noting that the development will affect the capital market, Prof.
Uwaleke asserted that it will “no doubt change this narrative at least in the near term,” as it “could roll back the plan by MTN to list on the Nigerian Stock Exchange.” According to him, “Two of the affected banks namely Stanbic IBTC and Diamond Bank are listed companies on the stock exchange and the fall in their share prices could drag down the banking index as investors are most likely to shy away from banking stocks till this issue is sorted out.
“Be that as it may, the sanctions carry a positive signalling effect for the economy in the long run.
Our regulatory agencies should continue to ensure that the multinational companies operating in Nigeria particularly in the oil, banking and telecom sectors comply with extant laws,” he stressed.
It will be recalled that the CBN has Wednesday slammed fines on Standard Chartered, Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc.
While Standard Chartered Bank was fined N2.47 billion, Stanbic IBTC, N1.88 billion, and Citibank Nigeria, N1.26 billion, the Diamond bank will cough out N250 million, in the same vein requesting telecoms giant MTN to refund $8 billion.

Be the first to comment

Leave a Reply