Section 23-33 Nigerian BOFIA 2020
Section 23-33 BOFIA 2020
Section 23 to 33 of the Bank and Other Financial Institutions Act 2020 is under Part III (BOOK AND RECORDS OF ACCOUNT) of the Act.
Section 23 BOFIA 2020
Proper books and records of account
(1) Every bank shall cause to be kept proper books of account with respect to all the transactions of the bank.
(2) For the purpose of subsection (1) of this section, proper books of account shall be deemed to be kept with respect to all transactions, if such books as are necessary to explain such transactions and give a true and fair view of the state of affairs of a bank are kept by the bank and are in compliance with the accounting standards as may be prescribed for banks by relevant authorities.
(3) The books of account shall be kept in English language at the principal administrative office of a bank and at each branch of the bank.
(4) Where the books of account, kept by a bank with respect to all its transactions, are prepared and kept in such a manner that, in the opinion of the Bank, have not been properly prepared and kept, or where a bank renders returns in accordance with the provisions of section 24 of this Act, which in the opinion of the Bank are inaccurate, the Bank may appoint a firm of qualified accountants to prepare proper books of account or render accurate returns, as the case may be, for the bank and the cost of preparing the accounts and rendering the returns shall be borne by the bank.
(5) If any person being a director, manager or officer of a bank —
(a) fails to take all reasonable steps to secure compliance with any of the provisions of this section; or
(b) has by willful act been the cause of any default thereof by the bank, such director, manager or officer shall be liable, in respect of paragraph (a) of this subsection, to a penalty of not less than N2,000,000 and in respect of paragraph (b) of this section, shall be guilty of an offence and liable on conviction to a term of imprisonment of
not less than 5 years or to a fine of not less than N5,000,000 or to both such imprisonment and fine.
Section 24 BOFIA 2020
Returns by banks
(1) Every bank shall submit to the Bank not later than 5 days after the last day of each month or such other interval as the Bank may specify, a statement showing—
(a) the assets and liabilities of the bank; and
(b) an analysis of advances and other assets, at its head office and branches in Nigeria and branches and subsidiaries outside Nigeria, in such form as the Bank may specify, from time to time.
(2) Every bank shall submit such other information, documents, statistics or returns as the Bank may deem necessary.
(3) Where a bank is affiliated to any other person, the Bank may require such bank to prepare and furnish any return required to be made under this Act or the Central Bank of Nigeria Act on a consolidated basis.
(4) The word “affiliated” as used in this section includes a subsidiary or holding company or such other relationship as may be determined from time to time by the Bank.
(5) The statements and information submitted by a bank under this section shall be regarded as confidential:
Provided that the Bank may furnish any such statement or information to any agency of Government as required by
law.
(6) Any bank which fails to comply with any of the requirements of this section is, in respect of each such failure, liable to a penalty of not less than N5,000,000 and N500,000 for each day during which the infraction continues.
Section 25 BOFIA 2020
Publication of consolidated statements
Notwithstanding anything in section 24 of this Act, the Bank may prepare and publish consolidated statements aggregating the statements furnished under section 24 of this Act for each category of banks.
Section 26 BOFIA 2020
Publication of consolidated statements
(1) A bank or other financial institution shall not later than three months after the end of its financial year, forward to the Bank for approval to publish, its financial statement which shall be prepared in accordance with the relevant accounting standards as may be prescribed by the relevant authorities, and in the case of a non-interest bank, an independent report of the advisory committee of experts on the compliance status of the bank’s activities with noninterest banking principles shall, additionally be furnished.
(2) Every bank or other financial institution shall thereafter but not later than 7 days after approval for publication by the Bank —
(a) cause to be published in not less than 2 national daily newspapers printed and circulating in Nigeria;
(b) exhibit in a conspicuous position in each of its offices, branches and website; and
(c) forward to the Bank, copies of the bank’s published Statement of Financial Position and Statement of Profit and Loss and Other Comprehensive Income duly signed with the full names of the directors of the bank who signed the financial statements, and in the case on a non-interest bank, a copy of the report of its advisory committee of experts.
(3) Every published account of a bank, under subsection (2) of this section, shall disclose in detail, penalties paid for the contravention of the provisions of this Act or any policy or guidelines in force during the financial year and the auditor’s report shall reflect such contraventions.
(4) The Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income of a bank shall bear on their face the report of an approved auditor and shall contain statements on such matters as may be specified by the Bank, from time to time.
(5) For the purpose of subsection (4) of this section, an “approved auditor” shall be an auditor approved for the purpose of section 28 of this Act.
(6) Any bank which fails to comply with any of the requirements of this section is, in respect of each such failure, liable to a penalty of not less than N5,000,000 and an additional penalty of N100,000 for each day the infraction continues.
Section 27 BOFIA 2020
Contents and form of accounts
(1) The Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income of a bank shall give a true and fair view of the state of affairs of the bank as at the end of the reporting period.
(2) The Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income of a bank forwarded to the Bank in accordance with the provisions of section 26 of this Act shall comply with the requirements of any circular which has been issued by the Bank thereon.
(3) Any person being a director of any bank who fails to take all reasonable steps to secure compliance with any of the provisions of this section in respect of any accounts is guilty of an offence and liable on conviction to a fine of not less than N2,000,000 and in addition the Governor may suspend or remove any such director from office.
Provided that the Bank shall have power to direct in appropriate cases:
Section 28 BOFIA 2020
Appointment, power and report of approved auditor
(1) Subject to the approval of the Bank, every bank shall appoint a firm of Auditors, referred in this section as, “the approved auditor,” whose duties shall be to present to the shareholders a report of the annual Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income of the bank and every such report shall contain statements as to the matters pertaining thereto and such other information as may be prescribed, from time to time, by the Bank:
(a) the appointment of more than one firm of Auditors for any bank which shall act jointly in auditing the bank’s Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income and all expenses and fees of the Auditors shall be borne by such bank; and
(b) the removal of an auditor of a bank, who in the opinion of the Bank, is not discharging its functions effectively.
(2) Where, for any reason, an auditor ceases to act for a bank, the bank shall within 14 days of the cessation, appoint another auditor and obtain the approval of the Bank for the appointment.
(3) Where, an auditor ceases to act for any bank, it shall within 7 days of the cessation inform the Bank of the fact of and reason for the cessation.
(4) For the purpose of this section, the approved auditor shall be —
(a) an auditor who is ―
(i) a member of one of the relevant professional bodies recognised in Nigeria;
(ii) approved by the Bank;
(iii) resident in Nigeria; and
(iv) carrying on professional practice in Nigeria as accountant and auditor; or
(b) a firm comprising persons to whom paragraph (a) of this subsection applies.
(5) Any person —
(a) having any interest in a bank otherwise than as a depositor; or
(b) who is a director, significant shareholder, officer or agent of a bank; or
(c) which is a firm in which a director or significant shareholder of a bank has any interest as partner or director; or
(d) who is indebted to a bank, shall not be eligible for appointment as the approved auditor for that bank and a person appointed as such auditor who subsequently —
(i) acquires such interest; or
(ii) becomes a director, significant shareholder, officer or agent of that bank; or
(iii) becomes indebted to a partner in a firm in which a director or significant shareholder of a bank is interested as partner or director shall cease to be such auditor.
(6) An approved auditor shall be appointed for a period of not more than 10 years and shall not be eligible for reappointment until a period of 10 years has elapsed after each appointment.
Provided that the Bank shall have power to determine and prescribe the tenure of approved auditors from time to
time.
(7) If any bank —
(a) fails to appoint an approved auditor under subsection (1) of this section; or
(b) at any time, fails to fill a vacancy for such person, the Bank shall appoint a suitable person for that purpose and shall fix the remuneration to be paid by the bank to such auditor.
(8) Every approved auditor of a bank shall have a right of access at all times to the books, accounts, vouchers and all records of the bank, and shall be entitled to require from directors, managers and officers of the bank, such information and explanation as such auditor thinks necessary for the performance of such auditor’s duties under this Act.
(9) The report of the approved auditor shall be read together with the report of the board of directors at the annual general meeting of the shareholders of the bank and two copies of each report together with the auditor’s analysis of bad and doubtful advances in a form specified, from time to time, by the Bank shall be sent to the Bank.
(10) The approved auditor shall immediately report to the Bank if such auditor is satisfied that —
(a) there has been a contravention of this Act or that an offence under any other law has been committed by the bank or any other person; or
(b) losses have been incurred by the bank which substantially reduce its capital funds; or
(c) any irregularity which jeopardises the interest of depositors or creditors of the bank, or any other irregularity has occurred; or
(d) he is unable to confirm that the claims of depositors or creditors are covered by the assets of the bank.
(11) The approved auditor shall forward to the Bank two copies of the domestic reports on the bank’s activities not later than 3 months after the end of the bank’s financial year.
(12) Any approved auditor under this section who acts in contravention of or fails deliberately or negligently to comply with any of the provisions of this section is guilty of an offence and liable on conviction to a fine of not less than N2,000,000 and where the approved auditor is a firm, the individual partner or partners shall, in addition, be liable on conviction to imprisonment for a term of not less than 3 years or a fine of not less than N2,000,000 or to both such imprisonment and fine.
(13) The appointment of an approved auditor shall not be determined by a bank without the prior approval of the Bank.
Section 29 BOFIA 2020
Relationship with Specialised banks and finance houses
(1) Notwithstanding anything to the contrary contained in this Act or in any other enactment, the Bank shall have and exercise regulatory and supervisory power over banks, other financial institutions and specialised banks to the exclusion of any other agency or institution. Provided that the Bank may share information on banks, other financial institutions or specialised banks with other agencies or institutions or permit such other agencies or institutions to have access to the books and records of banks, other financial institutions or specialised banks subject to the conditions set out in subsection (4) of this section or such other or additional conditions as the Bank may from time to time determine.
(2) Without prejudice to section 64 of this Act, where a bank, other financial institution or specialised bank is affiliated to any other entity, the Bank shall have power to supervise such bank, other financial institution or specialised bank and
all entities affiliated with such bank, other financial institution or specialised bank on a consolidated basis.
(3) For the purposes of subsection (1) of this section, the word ‘affiliated’ shall have the same meaning ascribed to it under subsection (4) of section 24 of this Act.
(4) For the purpose of this section, the Governor may appoint examiners who shall –
(a) under condition of confidentiality, examine periodically, the books and affairs of each bank, other financial institutions and specialised banks;
(b) have a right of access at all times, to the books, accounts and vouchers of banks, other financial institutions and specialised banks;
(c) have power to require from directors, managers and officers of banks, other financial institutions and specialised banks such information and explanation as they deem necessary for the performance of their duties; and
(d) have the right to attend (as observers) management and board meetings of banks, other financial institutions or specialised banks to which they are assigned.
(5) Every bank, other financial institutions or specialised bank shall produce to the examiners at such times as the examiners may specify, all books, accounts documents and information which they may require.
(6) If a bank, other financial institution or specialised bank fails to produce any book, document or information in accordance with the requirement of an examiner under this section or under section 31 of this Act, or produces or furnishes to an examiner, any book, document or information that is false in any material particular, the bank, other financial institution or specialised bank is liable, in the case of-
(a) a bank, to a penalty of not less than N20,000,000 and in addition, to a penalty of N500,000 for each day during which the infraction continues; or
(b) other financial institutions or specialised banks, to a penalty of not less than N2,000,000 and an additional penalty of N50,000 for each day during which the infraction continues.
(7) The reports and findings of the Bank together with the recommendations in relation to the specialised banks owned by the Federal Government of Nigeria shall be forwarded to the supervising minister of such specialised bank and at the sole discretion of the Governor, may be forwarded to the President.
(8) Specialised banks and other financial institutions shall be treated in the same manner as banks with respect to the requirements of section 23 of this Act.
Section 30 BOFIA 2020
Conduct Supervision and Competition
(1) Notwithstanding anything to the contrary in this Act or in any other enactment, the Governor shall have power to issue regulations, guidelines and policies to banks, specialised banks and other financial institutions in Nigeria, to –
(a) ensure responsible conduct;
(b) protect the interests of consumers of products and services of banks, specialised banks and other financial institutions;
(c) promote competition in the Nigerian financial system; and
(d) engender and sustain public trust and confidence in the use of financial services in Nigeria.
(2) All banks, specialised banks and other financial institutions shall adopt policies to ensure compliance with consumer protection and competition standards and obligations under extant laws, regulations, and to implement appropriate
internal controls in that regard.
Section 31 BOFIA 2020
Appointment of Directors with supervisory functions and other examiners
(1) The Governor shall appoint one or more officers of the Bank not below the rank of director, charged with supervisory functions over regulated entities, who shall be known by such title(s) as the Governor may from time to time specify and who shall be responsible, on behalf of the Bank, for the supervision of banks and/or other financial institutions and/or specialised banks as the Governor may from time to time specify.
(2) The director or directors appointed pursuant to subsection (1) of this section shall have the power to carry out supervisory duties in respect of banks, other financial institutions and specialised banks, as the Governor may specify and for that purpose shall-
(a) under conditions of confidentiality, examine periodically the books and affairs of each bank, other financial institution or specialised bank;
(b) have a right of access at all times to the books, accounts and vouchers or like documents howsoever described of banks, other financial institutions and specialised banks;
(c) have power to require from directors, managers and officers of banks, other financial institutions and specialised banks such information and explanation as the Governor deems necessary for the performance of their duties under this section.
(3) The Governor shall appoint to assist the director(s) appointed pursuant to subsection (1) of this section such other officers of the Bank as the Governor may, from time to time, determine.
(4) The officers may be designated examiners or have such other titles as the Governor may specify.
(5) For the purpose of this section, references to examiners are references to the director appointed pursuant to subsection (1) of this section and any officer of the Bank appointed pursuant to subsection (3) of this section.
(6) In examining the affairs of any bank, other financial institutions or specialised banks under this Act, it shall be the duty of an examiner at all times to avoid unreasonably hindering the daily business of the bank, specialised bank or
other financial institution.
(7) Every bank shall produce to the examiner at such times as the examiners may specify all books, accounts, documents and information which they may require.
Section 32 BOFIA 2020
Examination and report thereon
(1) The Governor shall have the power to direct the officers appointed under section 31 to carry out examinations of banks, other financial institutions and specialised banks including maiden, routine, special and target examinations.
(2) The Governor shall, in the case of routine examination, forward a copy of the report arising from the examination together with the recommendations of the Bank, to the bank, other financial institutions and specialised banks concerned with instruction that it be placed before the meeting of the board of directors of the bank specially convened for the purpose of considering the report and the recommendations thereon.
(3) The bank, other financial institution or specialised bank shall not later than 30 days after receiving the report, convey to the Governor, the reaction of its board of directors to the report and its proposals for implementing the recommendations of the Bank.
(4) Any bank, other financial institution or specialised bank which fails to comply with the provisions of this section shall be liable to a penalty of not less than N5,000,000 and an additional penalty of N100,000 for each day during which the
infraction continues in the case of a bank, and of not less than N2,000,000 and an additional penalty of N50,000 for each day during which the infraction continues in the case of a specialised bank or other financial institution and in all cases if the infraction continues for more than 30 days, the Bank may in addition to the penalty, withdraw any privilege or facility granted to that bank, other financial institution of specialised bank.
Section 33 BOFIA 2020
Special Examination
(1) The Governor shall have power to order a special examination or investigation of the books and affairs of a bank, other financial institution or specialised bank where —
(a) it is in the public interest so to do; or
(b) the bank, other financial institution of specialised bank has been carrying on its business in a manner detrimental to the interest of its depositors or creditors; or
(c) the bank, other financial institution of specialised bank has insufficient assets to cover its liabilities to the public;
or
(d) the bank has been contravening the provisions of this Act or any other relevant laws; or
(e) an application is made therefore by —
(i) a director or shareholder of the bank, other financial institution or specialised bank: or
(ii) a depositor or creditor of the bank, other financial institution or specialised bank:
Provided that in the case of paragraph (e) of this subsection, the Governor may not order a special examination or investigation of the books and affairs of a bank, other financial institution or specialised bank if the Governor is satisfied that it is not necessary to do so.
(2) For the purpose of subsection (1) of this section, the Governor shall have power to appoint one or more qualified persons other than the officers of the Bank to conduct special examination or investigation under conditions of confidentiality, of the books and affairs of a bank, other financial institution or specialised bank.
(3) The Governor shall have power to order that all expenses of or incidental to an examination or investigation be paid by the bank, other financial institution or specialised bank examined or investigated.