CBN, FRCN and other regulators
Though, the FRCN is doing its job, there ought to be no bad blood between it and the CBN. The two should work as partners in progress and settle discrepancies amicably in the national interest.
Where there are divergent positions that of CBN should have precedence. Reason is that the CBN is like the ‘Supreme Court’ in the financial system. All the other financial institutions – banks, insurance companies and regulators are subject to its verdict on any financial matter. That is how it is in other climes.
While any financial institution could disagree with the CBN in no more than the way lawyers question the verdict of the Supreme Court, which, in no way, nullifies the verdict. Any day the CBN begins to succumb to the whims and caprices of financial institutions or regulators that it presides over, that would erode its powers. There is no financial institution or regulator in the country that is at par with the CBN.
The CBN must live above board because any mistake by it would have adverse consequences on the economy. On that note, the FRCN should recognize its position in the scheme of things. It should seek to parley with the CBN to sort out whatever discrepancies are there rather than taking a confrontational posture.
Contention reportedly arose following the enquiry into Stanbic IBTC bank by the FRCN in response to a petition by the shareholders of the bank over accounting irregularities in the banks’ 2013 and 2014 accounts. The FRCN had on the basis of its “investigation”, slammed Stanbic IBTC bank with a N1 billion fine and suspended some of its directors.
Being the apex financial regulator, the CBN promptly dismissed FRCN’s sanctions against Stanbic IBTC on the ground that it had examined the bank’s accounts and found no error. The CBN refused to accede to the FRCN’s request to sanction Stanbic IBTC for failure to take due process. That decision should be final unless the FRCN has special interest.
It is interesting to note that the FRCN did not set out to confront the CBN but was only acting on a petition allegedly written by some shareholders of Stanbic IBTC. Vested interest was at the root of the petition. It is noteworthy that in this era, frivolous and selfish petitions alleging corruption are commonplace.
There is hardly any public figure in both public and private sectors of the economy that has no corruption allegation hanging over his or her neck. That being the case, the authorities should be circumspect in the way the petitions are countenanced. Not until an allegation is thoroughly investigated and proven to be true would the accused be punished. Otherwise, the accused remains innocent according to the law.
The last couple of weeks have witnessed some regulatory actions sweeping across the economic landscape. Some regulators have wielded the big stick, apparently, to prove that they are not asleep. Coming in series, the actions have been greeted with mixed reactions. Nigerians are amazed because, most regulatory agencies in the country hardly bite.
Most remain aloof even when things go wrong and operational standards have glaringly been breached. The result is that when eventually a regulator acts, sometimes unwieldy, there is outcry in some quarters.
Some Nigerians are hardly satisfied. Some Nigerians have the penchant to criticize every action or inaction of government or its agencies, such that, no matter what they do, the critics must find fault. This wouldn’t be the case had the regulatory agencies been consistent.
The hefty fine of $5.2 (N1.04 trillion) the Nigerian Communications Commission (NCC) slammed on the giant telecommunication company, MTN Nigeria, for failure to deactivate some 5.2 million subscriber SIM cards, has generated mixed reactions. While some have hailed NCC for taking the drastic action, others felt that the action was overkill.
How do you impose a fine that is capable of ruining a company and all it stands for? Because of the fine, MTN’s shares plummeted in the Johannesburg capital market and also led to the resignation of its CEO, Sifiso Dabengwa.
Killing a mosquito with a sledge hammer would definitely destroy the little insect. There have been calls for NCC to reduce the fine, at least, in the interest of the hundreds of Nigerian staffers under the employ of MTN. But the same critics may be the same people who have, over the years, condemned NCC for failing in its duty, as the telecom companies ripped Nigerians off with poor services. It is not known whether the fine was arbitrary or based on established template. Whatever is the case, the point is that the regulator, NCC, has acted, and it acted in a rather severe manner.
The $5 million (N1billion) fine levied on Guinness Nigeria Plc by the National Agency for Food and Drug Administration and Control (NAFDAC) for alleged regulatory infractions is also noteworthy. Lamenting the fine in a letter to the Nigeria Stock Exchange, Guinness company secretary, Sesan Sobowale, said they were still not clear what offence it committed to deserve such a punishment. Sobowale said while they await clarifications, “we have been advised that there is no legal basis for the demand for the payment of the said sum.” The company said the alleged regulatory infraction relates, in part, to the destruction of expired raw material without the authority and supervision of NAFDAC. Whether the fine is going to be paid or not, the point is this is another regulatory action.
The fine of N4 billion the CBN imposed on Skye Bank for failure to render appropriate returns on accounts of some government institutions and agencies is yet another. The CBN is the ultimate financial regulator. There is need to check the excesses of some regulators to protect the economy from overzealous regulators.