The Central Bank of Nigeria, CBN is putting threats out there for any erring bank in Nigeria. The threat is long overdue. Nigerian banks are no longer following guidelines on the submission of their financial reports.
In a statement by the CBN, the apex bank warned that it will remove with immediate effect CEOs and Chairmen of banks who fail to submit their financial reports by December 31st of every year.
The CBN said:
“In accordance with BOFIA 2010 LFN, banks are required, subject to the written approval of the CBN, to publish not later than four months after the end of each financial year, their audited financial statements (statement of financial position and statement of comprehensive income) in a national newspaper printed and circulated in Nigeria.”
“To facilitate the implementation of consolidated supervision, all banks, discount houses and their subsidiaries shall continue to adopt December 31, as their accounting year-end.”
“The CBN shall continue to hold the Board Chairman and Managing Director (MD) of a defaulting bank directly responsible for any breach and impose appropriate sanctions which may include the following: Barring the MD or his/her nominee from participation in the Bankers’ Committee and disclosing the reason for such suspension; suspension of the foreign exchange dealership licence of the bank and its name sent to the Nigerian Stock Exchange (in the case of a public quoted company); and removal of the chairman and managing director from office if the accounts remain unpublished for 12 months after the end of the bank’s financial year.”
Nigerian financial institutions usually do not have a consistent pattern of submitting financial reports. The new stance of the CBN might bring sanity to the system. The Nigerian Stock Exchange, NSE usually penalise erring companies listed on the exchange through delisting for regulatory reasons.
Last month, The Exchange changed its codes for companies listed on The Exchange. Late submission of financial reports is one of the major offences listed in that negatively affects the rating of a company in its rating.
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