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License abuse: Bill recommends imprisonment for bank directors

CBN Governor, Lamido Sanusi

Bank directors, managers and employees who abuse their operating licences risk a minimum of two-year jail term and a fine of at least N1m.

The penalty is contained in a bill to repeal and re-enact the Banking and Other Financial Institutions Act, which is pending before the House of Representatives.

The new BOFIA bars directors from tampering with depositors’ funds and provides penalties for various fraudulent practices in the banking sector.

The BOFIA had been passed by the 6th House, but due to lack of Presidential assent, it was reintroduced in the current 7th House.

At a session presided over by the Deputy Speaker, Mr. Emeka Ihedioha, on Wednesday, lawmakers endorsed clauses one to four and part of clause five of the bill.

The portion of clause five endorsed by the House reads, “Any person, who, being a director, manager or officer of a bank that fails to take reasonable steps to secure compliance with any of the conditions of the licence of the bank is guilty of an offence and liable on conviction to a fine of at least N1m and a minimum of two years’ jail term.”

The consideration of the contentious BOFIA has been dragging at the House owing to allegations that the Central Bank of Nigeria wants some sections expunged.

The sections whittle down the powers of the CBN governor and the bank is said to have another version of the bill that it wants the House to pass.

But the CBN has since denied that it has any intention to scuttle the bill.

Meanwhile, in an effort to hasten the consideration of the bill, the House on Wednesday set up a 10-member ad- hoc committee to work on the BOFIA.