CBN Sets New Compliance Rules for Bank CEOs and Chairmen in 2024-2025 Policy Guidelines
The Central Bank of Nigeria (CBN) has mandated that Chief Executive Officers (CEOs) and chairmen of banks who fail to publish their annual financial statements within 12 months of the financial year’s end should be immediately dismissed. This directive, outlined in the CBN’s 2024-2025 Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines, underscores the apex bank’s commitment to enforcing transparency and accountability in the financial sector.
The CBN emphasized that non-compliant executives must be fired without delay, with the decision supported by the Banks and Other Financial Institutions Act (BOFIA) 2020. However, the likelihood of such dismissals appears minimal, as Nigerian banks, particularly those publicly quoted, have a strong record of corporate governance compliance. Existing stock market regulations require these banks to submit their audited financial reports within 90 days of the financial year’s end or 30 days after the close of each quarter.
Despite this track record of compliance, the CBN’s new guidelines are aimed at reinforcing discipline. The directive requires banks and other financial institutions, with the CBN’s written approval, to publish their audited financial statements within three months after the financial year, in at least two national newspapers.
The guidelines also stipulate that banks must adopt December 31 as their financial year-end to aid in consolidated supervision. Any CEO or chairman who fails to comply may face sanctions, which could include being barred from participating in the Bankers’ Committee, suspension of the bank’s foreign exchange dealership license, disclosure of the reason for suspension, or outright removal from office if financial statements remain unpublished 12 months post-financial year.
In addition, the CBN directed banks to continue adhering to regulatory capital guidelines and the internal capital adequacy assessment process (ICAAP), revising the Basel II guidelines and introducing certain Basel III standards. These measures are designed to strengthen local banking regulations, promote improved risk management practices, and ensure better governance arrangements across the Nigerian banking sector, while enhancing the implementation of Basel II and III standards.
These new compliance rules signal the CBN’s commitment to fostering a more robust and transparent banking environment in Nigeria.
Source: Techeconomy
