The Central Bank of Nigeria, CBN, has sanctioned Access Bank Plc for violating the Banks and Other Financial Institutions Act, BOFIA, 1991 in 2011.
This came as Dr Maduka Cosmas has retired from Access Bank’s Board of Directors.
However, CBN disclosed that the issue at stake is not new. The CBN official said the said sanction was based on the examination the CBN carried out on the bank on September 30, 2011.
It was gathered that the CBN wrote to Access Bank conveying the fine on August 8, 2012 and Access Bank paid the fine with a cheque on August 9, 2012. He wondered why the issue was just coming out now after the sanction was imposed and paid.
Access Bank, on its part, said that Cosmas Maduka stepped down from the board of the bank having spent 12 mandatory years as stipulated by CBN code of conduct for bank directors. According to Mr Segun Fafore, Access Bank spokesman, Maduka joined the board of Access Bank in 2000 and his term of service as a non executive director expired in December 2012.
Maduka had previously stepped aside as director of the bank following the mandatory 12 years service to the bank which some said was as a result of the controversy that surrounded a N34.4 billion loan he obtained from the bank to finance the importation of petrol in partnership with Ifeanyi Ubah, the CEO of Capital Oil.
In the CBN August 8, 2012 letter issued by the Banking Supervision Department of the apex bank to Access Bank, the CBN said the sanction was informed by the outcome of a risk-based examination carried out on September 30, 2011.
The letter reads in part: ”The bank contravened Section 20(1) of BOFIA, 1991, as amended by granting credit facilities to Westcom Group to the tune of N38.4 billion which was above its single obligor’s limit of N36.4 billion.
“Contrary to the CBN circular No BSD/9/2004 of July 16, 2004 which stipulates that credits to directors and their related companies shall not exceed 10 per cent of the paid-up capital without the CBN approval, the bank granted to its following directors: Mr. Gbenga Oyebode, Dr. Cosmas Maduka and Mr. Tunde Folawiyo, facilities in excess of 10 per cent of its paid-up capital without the necessary regulatory approval. Consequently, penalties totalling N3,000, 000.00 is imposed on your bank for the above infractions.”
Access Bank had in a statement to the Nigerian Stock Exchange, NSE, a few days ago announced Maduka’s “retirement” from the board of the bank, saying his “retirement” was sequel to his completion of the maximum 12-year term as provided by CBN’s Code of Corporate Governance for banks.
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