The Banking Sector deals largely with the storage of cash, credit facilities, investments, and other financial transactions. It is one of the main forces behind most economies in the society, as it protects people’s money and makes money available to borrowers who make profitable investments. Financial institutions perform countless functions which include deposits and withdrawals, currency exchange, forex trading, wealth management, and risk management. Therefore, to address the issues of safety and stability of financial institutions, governments of countries have enacted laws, policies, guidelines, regulations, directions, etc., to regulate the activities of Banking Sector players, that is, both the Bank and its customers.
The Nigerian government has over the years enacted several laws to regulate the Banking Sector. The primary laws are; the Central Bank of Nigeria (Establishment) Act of 2007, and the Banks, and other Financial institution Act of 2020. Others include the Nigerian Deposit Insurance Corporation Act of 2006, Companies and Allied Matters Act of 2020, Foreign Exchange (Monitoring and Miscellaneous Provisions) Act of 1995, etc. these laws are provided to protect the interest of investors in the Banking Sector and also ensure that businesses are conducted with high standards and ethics.
This regulation also extends to the categories of persons that can be board members and staff of a financial institution. It also provides for certain crimes and punishments for workers in the bank commonly known as banking crimes. Persons who are found guilty of these crimes are liable to be blacklisted in accordance with the Operational Guidelines for Blacklisting. This article seeks to explain the process of blacklisting in the banking sector.
Blacklisting in the Banking Sector
The term blacklist refers to a list of people, organizations, or countries that are shunned or excluded by others, because they are alleged to have engaged in unacceptable or unethical behaviour or activities. Such offenses include fraud, forgery and dishonesty. The practice of blacklisting in the banking sector is in furtherance to the requirements and provisions of Section 48, sub-section 4 of BOFIA CAP B3, LFN 2004 which states:
“Any person whose appointment with a bank has been terminated or who has been dismissed for reasons of fraud, dishonesty or convicted for an offence involving dishonesty or fraud shall not be employed by any bank in Nigeria”. This is to prevent the recycling of persons who have been found guilty of banking crimes within the Banking Sector and to ensure that only persons of integrity, trust, and proven character are employed and retained in the Banking Sector.
However, this has been abused by some employers in the banking space as names of staff guilty of late coming, abandonment of duty, etc have been forwarded to the Secretary of the Bankers Committee to be added to the blacklist. Also, due process and thorough investigation have not followed before the termination of an employee’s employment on the grounds of fraud, forgery, and dishonesty. This has led to several petitions to the Central Bank of Nigeria for the reversal of names in the Blackbook.
To curb this menace and abuse of power and process, the governor of the Central Bank of Nigeria in the exercise of his powers under “Banks and Other Financial Institutions and Central Bank of Nigeria Acts,” enacted the Operational Guidelines for Blacklisting in Nigeria. These guidelines are issued to provide a guide to the procedure for forwarding names to the Secretary of the Bankers’ Committee for inclusion in the Register of Terminated, Dismissed, or Convicted staff of Banks and Other Financial Institutions on the grounds of fraud, forgery, and dishonesty otherwise known as the black book.