Details of how four banks violated the rules of the Central Bank of Nigeria (CBN) thereby attracting penalties from the apex bank have emerged.

The four affected banks were Standard Chartered Bank (SCB), Citi Bank, Diamond Bank Plc, and Stanbic IBTC.

Last week, the four banks’ infractions attracted sanctions from the apex bank of N5.87 billion, with the CBN also asking them to refund over $8.13 billion for engaging in shady deals.

In its letters dated August 28, 2018, to the Managing Directors/CEOs of each of the errant lenders, chronicling their sins, CBN revealed that there were more to the offences than met the eyes.

For instance, Stanbic IBTC Plc was discovered to have issued eight Certificates of Capital Importation (CCIs) for capital inflows in form of machinery, outside the 24-hour regulatory requirement of receipt of shipping documents, “in contravention of paragraph 4.1.1 (IV) of the Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2012 to 2013.”

The bank also failed to issue a letter of indemnity to CBN against double remittances in respect of 20 CCIs transferred by Standard Chartered Bank (SCB) as required “under subsection 5(iii) of Memorandum 24 of the Foreign Exchange Manual; and it also repatriated dividends totalling $905,260.20 in respect of CCIs illegally issued on the strength of locally sourced capital.”

All of these “constitute a flagrant violation of the extant laws and regulations of the Federal Republic of Nigeria on foreign exchange related transaction,” said CBN.

In the case of Citi Bank, it issued about $42.13 million seven CCIs to MTN that were subsequently transferred to Standard Chartered Bank Limited at the request of MTN on February 6, 2006, which constituted part of the CCIs that were consequently irregularly re-issued. Four of the CCIs, according to CBN, evidencing the inflow of capital imported as cash were equally issued outside the period of 24 hours allowed by regulation upon the receipt of inflow, in flagrant contravention of the Foreign Exchange Manual;

It also ran foul of the regulations by failing to issue letter of indemnity to CBN in addition to forwarding the transaction history of the CCIs to CBN as provided in Memorandum 24(5)(ii)(b) of the Foreign Exchange Manual in respect of the CCIs received from Standard Chartered Bank.

The CBN investigation was also said to have uncovered $535 million purchased on the basis of photocopies of Form A, bearing the name of Standard Chartered Bank as the applicant bank and the referenced CCIs, in contravention of Memorandum 24(4)(a) of the Foreign Exchange manual 2006.

As for Diamond Bank Plc, its offences included issuing three CCIs in favour of Dantata Investment for the sum of $5 million without converting the foreign exchange received into Naira as required by CBN regulations.

On the basis of these illegally issued CCIs, the bank was said to have repatriated the sum of $102,545,336.77 in respect of these CCIs; a further review of the CCIs also showed that no Form M was opened as evidence of the utilisation of the FX for the importation of goods (as not valid for FX) into the country;

Diamond Bank was also found out to have remitted the sum of $348,914,501.38 as dividend to MTN Nigeria Communications Limited’s offshore corporate shareholders without any documentary evidence of the audited account of the company to justify the basis of the payment of the dividend declared and paid by MTN. This action was a violation of the provision of Memorandum 24(4)(b) of the Foreign Exchange Manual;

Like its other accomplices, the bank failed to indemnify Standard Chartered Bank (SCB) for losses and/or liabilities that may arise from the use of the CCIs it transferred to SCB in violation of the provisions of the Foreign Exchange Manual 2006.

The bank issued three CCIs outside the regulatory 24 hours without the approval of CBN, contrary to provisions of Memorandum 22 of the Foreign Exchange Manual 2006; and was also accused of illegally remitting the $352,222,358.39 on behalf of SCB and Stanbic IBTC Bank in respect of the various CCIs issued to MTN Nigeria Communications Limited.

In penalising the bank and its ilk for the various infractions, the apex bank enjoined them to be “guided at all times by the provisions of the extant laws and regulations of the Federal Republic of Nigeria in its foreign exchange transactions and to ensure strict adherence thereto, failing which additional sanctions will be imposed on the management and the banks, including but not limited to denial of access to the Nigerian Foreign Exchange market.