- Lists infractions and heavy sanctions for defaulting commercial banks
The Central Bank of Nigeria (CBN) has
rolled out penalties to be meted out to participating commercial banks
that fail to comply with the terms and conditions in implementing the
Nigeria Electricity Market Stabilisation Facility (NEMSF).
The central bank in a circular by its
Director, Financial Policy and Regulation Department, Mr. Kevin Amogu,
posted on its website monday, listed 10 infractions and accompanying
sanctions to be received by any defaulting participating commercial
bank.
The CBN had in collaboration with the
Ministry of Petroleum Resources, Ministry of Power and the Nigerian
Electricity Regulatory Commission (NERC) signed a Memorandum of
Understanding (MoU) on the NEMSF.
The N213 billion facility was launched
in 2014 and was expected to bring about improvements in power supply for
the benefit of all Nigerians.
In May this year, the CBN disbursed N55,456,161,481 from the facility, which was the fourth batch from the N213 billion.
Listing the sanction in the latest
circular, the central bank stated that firstly, if a collection bank and
the principal collection bank fails to provide the
refinancer/administrator with statement of account for the transaction
account within five business days after the end of each month, the first
sanction would be a warning letter to the bank, instructing that the
infraction must be remedied within two working days.
Further infraction on the matter
involves a financial penalty of a minimum of N500,000 daily until the
infraction is remedied, on each account that such infraction is
committed.
“If there is further infraction by the deposit money bank (DMB) after payment of the above financial penalty, the DMB’s participation as a Mandate Bank under the CBN-NEMSF shall be terminated,” it added.
“If there is further infraction by the deposit money bank (DMB) after payment of the above financial penalty, the DMB’s participation as a Mandate Bank under the CBN-NEMSF shall be terminated,” it added.
Secondly, the circular stated that if a
DMB does not comply with a request by the refinancer/administrator to
provide copies of statements for any other Discos’ accounts maintained
by it and such other information relating to the transaction effected or
to be effected on the transaction accounts within five business days
from the date of such request, the bank would be served a warning letter
at first.
“Failure to comply within two working
days will attract a financial penalty of a minimum of N500,000 daily
until the infraction is remedied. If there is further infraction by the
DMB after payment of the above financial penalty, the DMB’s
participation as a Mandate Bank under the CBN-NEMSF shall be
terminated,” it added.
Thirdly, any DMB that does not comply
with the operational process document (circular) issued by the CBN
pursuant to the accounts administration agreement, would also be issued a
warning letter with other sanctions stated in the first and second
infractions stated above.
Fourthly, if there is a closure of a
transaction account by a DMB without prior written consent of the
refinancer, the penalty, according to the CBN, would be N2 million and
further infraction entails terminating the DMB’s participation as a
Mandate Bank.
Other issues that would be regarded as
infractions as highlighted by the central bank that could attract
various forms of sanctions include: when a collection bank and principal
collection banks do not provide the right to view Transaction Accounts
or any such other information relating to the transactions effected or
to be effected on the Transaction Account in real time; where collection
banks allow revenues (including cash collections and revenues received
from all electronic or other platforms) generated by any Disco to be
paid directly in any account other than the Feeder Collection Accounts
as stipulated in the Account Administration Agreement; and where
collection banks allow a debit/withdrawal from a Feeder Collection
Account (FCA) to the principal collection account contrary to terms of
the Accounts Administration Agreement.
Others include a situation where the
DMBs open additional bank account(s) for a Beneficiary Disco, whether
not for the purpose of receiving payments, fines, fees or electricity
consumed by its customers without the prior written consent of the
refinancer as well as where the DMBs permit debit/withdrawals from the
FCA to a non-principal collection account.
These attract sanctions that range from N2 million and their termination as Mandate Banks.
Meanwhile, the naira closed at N422 to the dollar on the parallel market monday, marginally stronger than the N423 to the dollar it was last Friday. On the interbank forex market, the spot rate of the naira closed at N314.20 to the dollar, slightly higher than the N314.77 to the dollar it closed last Friday.
Meanwhile, the naira closed at N422 to the dollar on the parallel market monday, marginally stronger than the N423 to the dollar it was last Friday. On the interbank forex market, the spot rate of the naira closed at N314.20 to the dollar, slightly higher than the N314.77 to the dollar it closed last Friday.
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