The Central Bank of Nigeria issued a circular last week instructing commercial banks in Nigeria to upgrade the levels of a Chief Compliance Officer (CC0) to a General Manager. They also instructed deposit money banks to hire or assign the position of an Executive Compliance Officer (ECO). The CBN also wants the CCO to report directly to the ECO (who will report directly to the board).
Nigeria’s APEX Bank has often been at odds with some analysts who complain of interference in the day-to-day operations of deposit money banks in the guise of reducing risk to depositors. In contrast, some supporters of the CBN’s actions opine that this is part of its function as a super regulator especially in an industry perceived to have a prevalence of non-compliance and complicity.
The CBN has also fined commercial banks tens of millions of Naira in fines over the years for flouting banking regulations and guidelines. Regulators around the world have also taken compliance seriously imposing billions of dollars in fines to commercial banks. Just recently, Deutsche Bank is thought to be facing a fine of around $14 billion from the US Government. This has caused panic amongst investors stoking speculations of another financial crisis similar to Lehman Brothers.
