Bank MDs, Others To Get Five Year Jail Term For Receiving Bribes To Secure Loan

Any director, manager, officer or employee of a bank or any other person receiving remuneration from the bank that accepts bribe to facilitate loans would spend a total of five years in jail, analysis of the newly signed Banks and Other Financial Institutions Act has revealed.

In assenting into law of the BOFI Act 2020, President Muhammadu Buhari had last week said the new Act represents a “monumental piece of legislation expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy.”

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He said the BOFI Act 2020 updates the laws that will enable the banking and financial services sector respond to developments and significant evolution in the financial sector over the last two decades.

“It will increase the appetite of banks and other financial institutions to channel much needed credit to the real sector to support economic recovery and promote sustainable growth,” the President added.

Besides, the President said the new BOFI Act would strengthen the “regulatory and supervisory framework for the financial industry by providing additional tools for managing failing institutions and systemic distress to preserve financial stability amongst others.”

An analysis of the Act revealed that the law prescribes a five-year jail term or a fine of N5m or both for any bank official who helps a customer to procure a loan in exchange for a commission or gift.

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According to Section 46 (1) of the new legislation, the gift collected by a banker found guilty would also be forfeited to the bank.

It said, “Any director, manager, officer or employee of a bank or any other person receiving remuneration from the bank, who solicits, receives, consents or agrees to receive any gift, commission, employment, service, gratuity, money, property or thing of value for his own personal benefit or advantage or for that of any of his relations, from any person for procuring or endeavouring to procure for any person any advance, loan or credit facility from the bank; the purpose of the purchase or discount of any draft, note, cheque, bill of exchange or other obligation by that bank commits an offence and is liable to conviction to a fine of N5,000,000; imprisonment for a term of five years or both such fine and imprisonment and, in addition, any such gift or other commission shall be forfeited to the bank.”

To check the high incidence of non-performing loans by banks, the new regulation said any bank grants, advance, loan, or credit facility in excess of N3m without the approval of the CBN, and without any security shall be liable to regulatory sanctions spelt out in Section 20(1)(c).

Similarly, the aggregate value of the equity participation of the bank in all enterprises, both domestic and foreign, shall at no time exceed 40 per cent of its shareholders’ fund unimpaired by losses or such other percentage as the CBN may prescribe.

Under the new Act, a non-interest or profit and loss sharing bank shall indicate conspicuously in all its offices that they charge no interest.

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Also, unlike the old Act, which required every bank to submit to the CBN a statement on its assets and liabilities as well as analysis of advances and other assets within 28 days after the last day of each month, Section 25(1) of the new Act demands the information not later than 10 days after the last day of each month or such other interval as the CBN may specify.

ENDS

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