CBN’s Fine Shows Need For Improved Corporate Governance By Banks, Says NDIC Boss

Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, says last month’s N5.87bn fine levied by the Central Bank of Nigeria (CBN) on four banks operating in the country for “irregular” repatriation of $8.134bn by four banks, shows the need for improved corporate governance by financial institutions.
The CBN has since debited the accounts of the banks: Standard Chartered Bank, N2.4bn; Stanbic IBTC Bank, N1.8bn; Citibank, N1.2bn; and Diamond Bank, N250m for the full value, following their repatriation of the forex on behalf of shareholders, being alleged dividend declared by MTN Communications Nigeria.
But while the banks insist they are innocent in the matter, MTN Group, on Tuesday announced that it has sought protection of the Federal High Court by way of an injunction. It also says it is innocent.
Receiving officials of the Chartered Institute of Bankers of Nigeria (CIBN) in his Abuja office, Ibrahim, also spoke of the need for ethical behaviour by the banks.
He lamented that instances of abuse of extant regulations and ethical standards impacted negatively on the confidence in the banking industry and the entire financial system in general.
The NDIC boss assured the CIBN President and Chairman of Council, Dr. Uche Olowu of his resolve to strengthen collaboration with the institute in the enforcement of good corporate governance among banks as well as the promotion of high ethical standards and professionalism.
In line with the corporation’s drive to protect depositors and enhance public confidence in the financial system, he said it was the primary responsibility of regulators to uphold strict compliance with international best practices and ethical standards. This, he continued, helps to promote effective risk management and sound corporate governance in the banking industry.
A statement by Mohammed Kudu Ibrahim, spokesman of the corporation quoted Dr. Olowu as saying the active participation of the Corporation in the activities of the council as well as its role in the nation’s economic development informed the Council’s visit to formally invite the NDIC MD/CE as a special guest and resource person at the CIBN 11th Annual Banking and Finance Conference.
He attested to the recognition of the NDIC Academy by the International Association of Deposit Insurers (IADI) as a world class institution in providing capacity building for the banking industry. He said this recognition and the CIBN’s active collaboration with the Corporation to entrench ethical standards is a key driver towards effective service delivery in the industry. He therefore emphasized the need to extend the collaborative efforts to joint research and knowledge-based events to enhance public awareness about the role of deposit insurance in financial system stability.

Photo Caption:
NDIC’s MD/Chief Executive, Umaru Ibrahim (2nd left) in a group photograph with council members of the CIBN, led by the President and Chairman, Dr. Uche Olowu (2nd Right), while Registrar/CEO, Seyi Awojobi, (1st left) and National Treasurer, Prof. Deji Olarewaju (1st right), looks on, during the council’s visit to the NDIC Management at the Corporation’s Head Office, Abuja.