Four banks flouted
Six separate incidents of non-compliance were recorded, affecting five sections of the Banking Act and the CBK Prudential Guidelines
This was despite the Banking Act having been amended - effective
CBK said the number of violators and incidences were fewer compared to the previous year when six banks were non-compliant, flouting 10 sections of the Banking Act.
The regulator has nonetheless declined to name the rogue banks.
"Confidentiality requirements pursuant to Section 31 of the Banking Act prohibit CBK from disclosing the specific names of the four banks," it said in a response to the Star.
Two of the four banks violated section 10(1) of the Banking Act that requires they do not lend more than 25 per cent of core capital to single borrowers.
One of the lenders breached the requirement that a bank's property investments must not exceed 20 per cent of its core capital.
Two banks violated the consumer protection guideline requiring them to guard customers against fraud, loss of privacy, unfair practices and lack of full disclosure.
One bank breached Principle 3 of the CBK Prudential Guidelines that requires board members to attend at least 75 per cent of board meetings in a financial year.
CBK said "appropriate remedial actions were taken" against the lenders, without specifying the exact penalties.
"Examples of sanctions and administrative actions that can be taken include: issuance of directives, removal of officers, denial of corporate approvals, CBK intervention in management, removal of directors, levying of penalties on officers/director/institution and revocation of banking licence among others," it said on email.
Repeat violators risk "more severe sanctions and administrative actions", including prohibition from declaring or paying dividends, expansion or launch of new services, and suspension from lending and taking additional deposits.
The CBK Prudential Guideline on Prompt Corrective Action also state that rogue banks would be prohibited from further investments, acquiring additional fixed assets and accessing new lines of credit.
They can also be barred from declaring or paying bonuses, salary incentives, severance packages, management fees or other discretionary compensation to directors or officers.
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