BANKS AND OTHER FINANCIAL INSTITUTIONS (AMENDMENT) DECREE NO. 4 1997

BANKS AND OTHER FINANCIAL INSTITUTIONS (AMENDMENT) DECREE NO. 4 19971

 

Decree No. 4

[10th January, 1997]

Commencement.

 

THE Federal Government hereby decrees as follows:-

1. The Banks and Other Financial Institutions Decree 1991 (in this Act referred to as "the principal Decree") is hereby amended as set out in this Act.

Amendment of

1991 No. 25.

 

2. Section 1 of the principal Decree is amended in subsections (1) and (2) by substituting therefor the following new subsections, that is -

Amendment of section 2.

"(1) The Central Bank of Nigeria (hereinafter in this Act referred to as " the Bank") shall have all the functions and powers conferred and the duties imposed on it under this Act subject to the overall supervision of the Minister.

(2) The Bank shall, in addition to the functions and powers conferred on it by this Act , have the functions and powers conferred and the duties imposed on the Bank by the Central Bank of Nigeria Decree 1991.".

3. Section 3 of the principal Decree is amended by inserting immediately after subsection (4) thereof, the following new subsection (5), that is -

Amendment of

section 3.

 

"(5) An application for a licence shall be forwarded to the Governor and all licenses to be issued shall be with the prior approval of the Minister.".

4. Section 5 of the principal Decree is amended in subsections (1) and (3) by substituting thereof the following new subsections, that is -

Amendment of

section 5.

 

"(1) Except as provided in subsection (2) of section 9 of this Act , the Governor may, with the approval of the Minister, vary or revoke any condition subject to which a licence was granted or may impose fresh or additional conditions to the grant of a licence.

(3) Any bank which fails to comply with any of the conditions of its licence is guilty of an offence and liable on conviction to a fine not exceeding 50,000 for each day during which the condition is not complied with.".

5. Section 15 of the principal Decree is amended in subsection (5) by substituting therefor the following new subsection, that is -

Amendment of

section 15.

 

"(5) Any bank which fails to comply with any of the provisions of subsection (4) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine equal to at least 10 per cent of the shortfall for each day during which the deficiency under this subsection exists.".

6. Section 17 of the principal Decree is amended by -

(a) renumbering the existing section as section 17.-(1); and

Amendment of

section 17.

 

(b) inserting immediately after paragraph (c) of subsection (1) thereof, the following new subsection (2), that is -

"(2) Any bank which fails to comply with the requirements of this section is guilty of an offence and liable on conviction to pay to the Bank a penalty amounting to 50 per cent of the dividend paid.".

7. Section 20 of the principal Decree is amended -

(a) in subsection (2) (a), by substituting for the figure "50,000" the figure "1,000,000";

(b) by inserting immediately after subsection (6) thereof the following new subsections, that is -

"(7) Where an approval is given by a Director of a bank for an unsecured advance, loan or credit facility without the prior approval of the Bank, the Director is guilty of an offence and liable on conviction to imprisonment for a term of 5 years and shall in addition be required to pay the loan or to lose his known assets in lieu of the unpaid loan.

(8) Any bank which, after the commencement of this Act , enters into any transaction which is inconsistent with the requirement of subsection (7) of this section is guilty of an offence and liable on conviction to a fine of 1,000,000.";

(c) by renumbering the existing subsection (7) as subsection (9) and substituting therefor the following new subsection, that is -

"(9) Any bank which, after the commencement of this Act , enters into any transaction which is inconsistent with any of the provisions of subsection (1) or (2) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 100,000 for each day during which the transaction continues.".

8. Section 21 of the principal Decree is amended in subsection (4) by substituting therefor the following new subsection, that is -

Amendment of

section 20.

Amendment of section 21.

"(4) Any bank which fails to comply with the provisions of subsection (3) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 100,000 each day during which the offence continues.".

9. Section 22 of the principal Decree is amended in subsection (2) by substituting therefor the following new subsection, that is -

Amendment of

section 22.

 

"(2) Any merchant bank which acts in contravention of or fails to comply with any of the provisions of this Act is guilty of an offence and liable on conviction to pay to the Bank a fine of 25,000 each day during which the offence continues.".

10. Section 23 of the principal Decree is amended in subsection (2) by substituting therefor the following new subsection, that is -

"(2) Any bank found in breach of any of the provisions of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 10,000 every day during which the offence continues.".

11. Section 24 of the principal Decree is amended in subsection (5)(b) by substituting therefor the following new paragraph, that is -

Amendment of

section 23.

Amendment of

section 24.

 

"(b) has by his wilful act been the cause of any default thereof by the bank, he is guilty of an offence and liable on conviction in respect of paragraph (a) of this subsection to pay to the Bank a fine of 20,000, and in respect of paragraph (b) of this section, to a fine of 100,000.".

12. Section 25 of the principal Decree is amended in subsection (3) by substituting therefor the following new subsection, that is -

Amendment of

section 25.

 

"(3) Any bank which fails to comply with any of the requirements of subsection (1) or (2) of this section is guilty of an offence and liable on conviction in respect of each such failure to pay to the Bank a fine of 100,000 for each day during which the offence continues.".

13. Section 27 of the principal Decree is amended in subsection (5) by substituting therefor the following new section, that is -

Amendment of section 27.

 

"(5) Any bank which fails to comply with any of requirements of this section is guilty of an offence in respect of each such failure and liable on conviction to pay to the Bank a fine of 200,000 each day during which the offence continues.".

14. Section 28 of the principal Decree is amended in subsection (3) by substituting therefor the following new section, that is -

Amendment of

section 28.

 

"(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 account is guilty of an offence and liable on conviction to pay to the Bank a fine of 50,000.".

15. Section 29 of the principal Decree is amended in subsection (5) by substituting therefor the following new subsection, that is -

Amendment of section 29.

 

"(5) 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 pay to the Bank a fine of 500,000.".

16. Immediately after section 29 of the principal Decree -

Insertion of new

section 30, etc.

(a) there shall be inserted the following new section 30, that is -

 

 

 

 

 

 

 

"Relation-ship with

specialised

banks and

finance

houses.

30.-(1) As from the commencement of this Act , the Governor shall have power to examine, from time to time, the accounts and other books of the Nigeria Industrial Development Bank, the Nigeria Agricultural and Cooperative Bank, the Nigeria Export Import Bank, the Nigeria Bank for Commerce and Industry, the Urban Development Bank, all Mortgage Institutions, Community Banks and the Peoples Bank and such other specialised banks.

(2) The Bank shall also have power to examine the accounts of bureaux de change, discount houses and such other financial institutions and in that regard have power to issue reports, from time to time, regarding the accounts of such financial institutions.

(3) The periodic reports and findings of the Bank in relation to the said specialised banks and other financial institutions shall be

forwarded to the  President  through the Minister.

(4) For the purpose of implementation of this section, the specialised banks and other financial institutions shall be treated in the same manner as other banks with respect to the requirements of section 24 of this Act .";

(b) the existing section 30 of the principal Decree shall be renumbered as section 30A; and

(c) section 30A of the principal Decree, as renumbered, shall be amended in subsection (8) by substituting therefor the following new subsection, that is -

"(8) If any book, document or information is not produced in accordance with the requirement of an examiner under this section or what is produced or furnished to an examiner is false in any material particular the bank is guilty of an offence and liable on conviction to pay to the Bank a fine of 500,000 and in addition, to a fine of 25,000 for each day during which the offence continues.".

17. Section 31 of the principal Decree is amended in subsection (3) by substituting therefor the following new subsection, that is -

Amendment of

section 31.

 

"(3) Any bank which fails to comply with the provisions of subsections (1) and (2) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 25,000 for each day during which the bank continues such failure of non compliance and if the situation continues for more than 30 days, the Bank may, in addition to the fine, withdraw any privilege or facility granted to that bank by the Bank.".

18. Section 39 of the principal Decree is amended in subsection (4) by substituting therefor the following new subsection, that is -

Amendment of

section 39.

 

"(4) Any person who acts in contravention of this section is guilty of an offence and liable on conviction to a fine of 50,000 each day during which the act continues.".

19. Section 40 of the principal decree is amended in subsection (2) by substituting therefor the following new subsection, that is -

Amendment of

section 40.

 

"(2) Any person who issues an advertisement in contravention of the provisions of subsection (1) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 500,000 or to imprisonment for a term of 15 years or to both such fine and imprisonment.".

20. Section 43 of the principal Decree is amended in subsection (1) by substituting therefor the words appearing after paragraph (c) thereof the following new words, that is -

"is guilty of an offence and liable on conviction to pay to the Bank a fine of 100,000 or to imprisonment for a term of 10 years or to both such fine and imprisonment and in addition any such gift or other commission shall be forfeited to the Federal Government.".

Amendment of

section 43.

 

21. Section 44 of the principal Decree is amended in subsections (5) and (6) by substituting therefor the following new subsections, that is -

Amendment of

section 44.

 

"(5) Any bank which knowingly acts in contravention of subsections (1), (2), (3) or (4) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 500,000.

(6) Where an offence committed by the bank under subsection (4) of this section is proved to have been committed with the knowledge or connivance of any director, manager or any other officer of the bank he, as well as the bank, is guilty of an offence and the director, manager or any other officer of the bank shall, on conviction, be liable to pay to the Bank a fine of 500,000.".

22. Section 46 of the principal Decree is amended in paragraph (b) by substituting therefor the following new paragraph, that is -

Amendment of

section 46.

 

"(b) take all reasonable steps to secure the correctness of any statement submitted under the provisions of this Act ,

is guilty of an offence and liable on conviction to pay to the Bank a fine of 50,000 or imprisonment for a term of 3 years or to such fine and imprisonment.".

 

23. Section 47 of the principal Decree is amended by substituting therefor the following new section, that is -

Amendment of

section 47.

 

"47. Any bank which contravenes or fails to comply with any of the provisions of this Act or any regulations made hereunder for which an offence or penalty is not expressly provided is guilty of an offence and liable on conviction to pay to the Bank a fine of 50,000.".

24. Section 48 of the principal Decree is amended by substituting therefor the following new section, that is -

Amendment of

section 48.

 

"48. All revenues collected as a result of penalties imposed by this Act or any other penalties for which the Bank is responsible for collection shall be shared in the ratio of 20 per cent to the Bank, 10 per cent to the Nigeria Deposit Insurance Corporation and 70 per cent to the Consolidated Revenue Fund.".

25. Sections 51 and 52 of the principal Decree are hereby deleted.

Deletion of

sections 51

and 52.

26. Section 54 of the principal Decree is amended by substituting therefor the following new section, that is -

Amendment of

sections 54.

 

"54. The provisions of this Act shall apply without prejudice to the provisions of the Nigeria Deposit Insurance Corporation Decree 1988.".

1988 No.22.

 

27. Section 57 of the principal Decree is amended in subsection (6) by substituting therefor the following new subsection, that is -

Amendment of

section 57.

"(6) Any person who transacts a banking business without a valid licence under section 56 of this Act or subsection (2) of this section whether in the case of an individual or in the case of a body corporate is guilty of an offence and liable on conviction to pay to the Bank a fine of 1,000,000 respectively.".

28. Section 58 of the principal Decree is amended in subsections (1) and (3) by substituting therefor the following new subsections, that is -

Amendment of

section 58.

 

"(1) Any person who fails to comply with any of the condition of its licence is guilty of an offence and is liable on conviction to pay to the Bank a fine not exceeding 100,000 for each day during which the condition is not complied with.

(3) Any person who fails to comply with paragraph (a) or (b) of subsection (2) of this section is guilty of an offence and liable on conviction to pay to the Bank a fine of 25,000 for each day during which such failure occurs.".

29. Section 60 of the principal Decree is amended in subsection (2) by substituting therefor the following new subsection, that is -

Amendment of

section 60.

 

"(2) The Governor, may with the approval of the Minister, suspend any licence issued or given to any bank or any other financial institution which fails to comply with any rules, regulations, guidelines or administrative directives made, given or issued to it by the Bank under this Act .".

 

30. this Act may be cited as the Banks and Other Financial Institutions (Amendment) Decree 1997.

Citation.

 

1 CONSEQUENTIALLY REPEALED BY  BANKS AND OTHER FINANCIAL INSTITUTIONS (AMENDMENT) DECREE 1998 NO. 38; NOTE HOWEVER THAT SOME SECTIONS AMENDED in this Act ARE NOT ALTERED IN THE LATTER AMENDMENT