According to a report by this newspaper, the Central Bank of Nigeria (CBN) is set to wield the big stick against Chief Executive Officers (CEOs) and chairmen of banks who fail to publish their annual financial statements of account 12 months after the end of the financial year. The erring CEOs and chairmen, it directed, should be fired with immediate effect. The directive is said to have been contained in CBN’s Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for 2024-2025 posted on its website. The decision, it said, is backed by the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.

Excerpts of the report as published by this newspaper 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(in the case of a public quoted company); and removal of the Chairman and MD/CEO from office if the accounts remain unpublished for 12 months after the end of the bank’s financial year.”

Interestingly, the banks, being publicly quoted entities, are also subject to the extant rules at the stock market which require quoted companies to submit their audited report and accounts not later than 90 days after the end of the financial year, or 30 days after the end of the quarter.

The above obviously prompts the question: why was the directive necessary? Agreed, nothing in the directive remotely suggests that such breaches are industry-wide; yet, in the same vein it seems only reasonable to suggest that the apex bank could not have been crying wolf where none existed. In fact, the CBN, in putting out the information the way it did, while spelling out the dire warnings of the consequences of the breaches, not only attests to the existence of the problem, it highlighted the seriousness with which it views it.

Could the affected banks be also in the breach of the capital market rules? Or is it a case of complying with one while ignoring the other? Nigerians will certainly like to know.

At the risk of tarring every operator with tar brush, we would have expected the CBN to have provided more information than it had dared to put out. The matter, as it is, begs the question: how pervasive is the breach? In other words, how many institutions are involved? Other than cast the shadow on every operator in the sector, it is hard to justify the idea of bunching the guilty with the innocent. It neither serves any useful purpose nor serves the public cause.

In the absence of any ambiguity in the provisions of the regulations, the axe simply ought to have fallen with examples made of the offending players; after all, none of them could feign ignorance of those provisions. To the extent that the failure, which the CBN has already adjudged a dereliction, smacks of an intolerable abuse of public trust that should never in any circumstance, have been condoned, Nigerians would have gladly welcomed the sanction.

It Is certainly not too late for the CBN to offer the necessary clarifications. To fail to do that is to risk further damage to the trust held by the public in the financial services sector.

(The Nation Editorial)