ZENITH Bank, Nigeria’s largest bank by net income, paid a total of N14.647 billion for various foreign exchange (FX) infractions in 2024. The tier-one bank also paid another N780.25 million for 9 other infractions, Economy Post can confirm.

Zenith Bank’s 2024 full-year financial statement shows that the bank paid N14.647 billion to the Central Bank of Nigeria (CBN) for “infractions from the foreign exchange examination.” But that is not all. It was also fined N2 million for late resolution of customer’s complaints.

Zenith Bank, like some other financial institutions, sometimes do not meet the CBN’s stipulations on the prompt response to customer complants. Some banks leave a lot of customer complaints unaattended and unresolved over a long period.

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Apart from FX penalty and customer complaints’ fine, the bank also paid N14 million for the non-compliance with CBN directive on reconciliation of customer charges. It was also fined N61 million as “penalty on anti-money laundering findings.”

The bank was likewise fined N20 million for”non-compliance with CBN directives.” Zenith Bank did not explain exactly the types of CBN directives it violated in this context. It was also fined N4 million as “penalty as a result of infraction related to risk assessment examination.”

Zenith Bank was equally fined by the apex bank for what the financial institution described as “checks on customers onboarding documentation” and N250 million as “penalty for extant regulation violation.” The bank equally paid N103.25 million as “penalty as a result of anti-money laundery reviews.”

A Zenith Bank spokesperson did not respond to enquiries as to why the bank violated these guidelines.

Banks continue to violate CBN rules

Banks have continued to violate the CBN regukations and guidelines with impunity. Economy Post earlier reported that Guaranty Trust Bank (GTB) was fined between April and June 2024 in Ghana and Rwanda for contravening FX guidelines.

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GTB was fined an equivalent of N1.297 billion in Ghana in the second quarter (Q2) of 2024 for “breaching foreign exchange market operational guidelines,” according to the bank’s Q2 2024 financial statement analysed by Economy Post.

In Rwanda, GTB was fined an equivalent of N311,000 for “non compliance with the exchange rate applied by commercial banks” in the same quarter.

According to the bank’s financial statement, GTB was fined for “non compliance noted with respect to the Bank taking fees which are not allowed by the regulator.” By implication, GTB was fined for taking certain fees that were not allowed possibly by the National Bank of Rwanda, which is the banking regulator in the East African nation.

In Nigeria, the bank was fined four times for various contraventions between April and June 2024. It paid N8 million in penalties “in respect of 2023 CBN’s FX Examination on the Bank.”

GTB also paid N54 million penalty “in respect of Consumer Protection Regulations.” It further paid N124.25 million as fine “in respect of 2024 Compliance Related/Bank e-Mail Returns.” The lender equally paid N2 million penalty “in respect of 2024 CBN’s Mystery Shopping Exercise on the Bank.”

A GTB spokesperson did not respond to a question from Economy Post asking for a comment.

How to reduce banks’ violations

Financial experts told Economy Post that it was impossible to end banks’ violations of the CBN guidelines or directives but noted that measures could be taken to reduce them.

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“Banks should first of all be aware that they are using depositors’ money to pay these fines,” said a investment banker, Ms Dorothy Ogbodo.

“On the part of the CBN, there is a need to raise some of those penalties, especially the ones that have to do with FX and customer welfare. If you fail to attend to customer complaints quickly, your fine should not be N2 million; it should be way more than that,” she said.

A financial analyst and economist, Mr Segun Fagbemi, said: “Serial offending banks should be sanctioned to send a signal to others that no bank will get away with an offence it has repeatedly committed.”