Can the Central Bank of Nigeria Blacklist a Bank Employee?

Can the Central Bank of Nigeria blacklist a Bank Employee? Daily Law Tips (Tip 765) by Onyekachi Umah, Esq., LL.M, ACIArb(UK)

Introduction:

The Central Bank of Nigeria is a federal government agency that provides sound financial system, among other things. Commercial banking and other related services are regulated in Nigeria by the Central Bank of Nigeria. While bank employees are staff of their respective employers (banks), looking at the powers of the Central Bank of Nigeria, “Can the Central Bank of Nigeria blacklist a Bank Employee?”

The Position of the Supreme Court of Nigeria.

The highest court in Nigeria is the Supreme Court of Nigeria and the judgement of the Supreme Court is final on any issue. So clearly, although the Justices of the Supreme Court are mere human beings that are not above mistake, their decisions are unquestionable. To this end, it is safer to always answer legal questions with the judgments of the Supreme Court of Nigeria. Answer to the question; “Can the Central Bank of Nigeria blacklist a Bank Employee”, will be drawn from the judgment of the apex court.

A judgment of the Supreme Court of Nigeria in 2017 in the case of CENTRAL BANK OF NIGERIA & ANOR v. OLAYATO ARIBO (2017) LPELR-47932(SC), answers this question in the affirmative. And, the relevant part of the judgement is reproduced below.

“The respondent was the Divisional Head of Department in charge of foreign exchange documentation at Equity Bank of Nigeria Limited. In 2002, the Central Bank of Nigeria (CBN), 1st appellant revoked the bank’s license to conduct foreign exchange transaction when it was discovered that Equity Bank of Nigeria Ltd was selling foreign exchange in flagrant violation of laid down procedures. The bank was penalised by the CBN in the sum of N293,129,000.00 (two hundred and ninety-three million, one hundred and twenty-nine thousand naira). As a result, the board of Equity Bank advised the respondent and two others to resign their appointments. The respondent accordingly submitted his resignation on 10 October 2002. He did not voluntarily resign his appointment. The resignation was a compulsory one. In my firm view, this amount to constructive dismissal associated with misconduct. That is the respondent’s complicity in illegal foreign exchange transaction, the soft landing given to him by Equity notwithstanding. The CBN, the regulatory body was in my view, right to have regarded the actions of the respondent, on which he was advised by the board of Equity Bank to resign as constituting serious misconduct under Section 44(2)(d) of the Banks and other Financial Institutions Act, 1991 (BOFIA), as amended.”

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“The board of Equity Bank did not just direct the respondent to resign his appointment, it had set up a special committee on Foreign Exchange Transactions of Equity Bank to investigate and establish the respondent’s complicity. The special committee found him guilty of illegal foreign exchange transactions. That report has not been set aside. The CBN as a regulatory body has a duty to keep shady characters from holding appointments in the commercial banks. That function of CBN has not been denied. I think it would have been dereliction of duty on the part of CBN to have closed its eyes to the obvious misconduct of the respondent, as found by the special committee. The respondent, if he was aggrieved by the indictment of the special committee should have taken necessary steps to overturn the report. This he never did. He is therefore estopped from insisting that he was not found guilty of serious misconduct, while he discharged his office as head of department in charge of foreign exchange portfolio of Equity Bank.”

“The CBN has a discretion to exercise in respect of the respondent’s application to it to clear him for another appointment in National Bank of Nigeria. I cannot fault CBN decision refusing to clear the respondent for that appointment. The CBN in my firm view was right in predicating its decision on the report of the special committee which had indicted and found the respondent guilty of illegal foreign exchange transactions while in the employment of Equity Bank. The respondent’s suit was conceived to compel the CBN to exercise its discretion. I do not think that the suit is well founded. The CBN cannot be compelled to exercise its discretion in a manner favourable to the respondent. I had earlier stated that in view of the report of the special committee that found the respondent guilty of illegal foreign exchange transactions, it would amount to dereliction of duty for the CBN to have cleared or recommended the respondent for appointment in another commercial bank. The respondent’s past reprehensible serious misconduct does not speak well for his appointment in another commercial bank. Characters like the respondent do not deserve a place in sensitive banking institutions over which the CBN is the regulatory body.”  Per EKO, J.S.C (Pp. 48-51 paras. A-A) in the case of CENTRAL BANK OF NIGERIA & ANOR v. OLAYATO ARIBO (2017) LPELR-47932(SC).

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Conclusion:

The Central Bank of Nigeria has enormous powers in regulating the banking sector. Like most federal regulators, the Central Bank of Nigeria has statutory powers and rights to stabilize its sector and ensure that spoilt eggs are thrown off. While, commercial banks are licensed to operate and employ their staff, that must be in line with the regulations and guidelines of the Central Bank to Nigeria. Where bank staff are founding to lack the needed character in the banking sector, the Central Bank of Nigeria as a regulator, has the powers to blacklist such staff, purge them and ensure they are never smuggled into the sector.

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My authorities, are:

  1. Sections 1, 2, 3, 4, 5 and 6 of the Constitution of the Federal Republic of Nigeria, 1999.
  2. Sections 1, 2, 60 and 61 of Central Bank of Nigeria Act, 2007.
  3. Judgement of the Supreme Court of Nigeria in the case of CENTRAL BANK OF NIGERIA & ANOR v. OLAYATO ARIBO (2017) LPELR-47932(SC)
  4. Onyekachi Umah, “The Central Bank of Nigeria Notices on Cryptocurrencies; a Ban or a Banger?” (LearnNigerianLaws.com, 9 February 2021) <https://learnnigerianlaws.com/the-central-bank-of-nigeria-notices-on-cryptocurrencies-a-ban-or-a-banger/> accessed 28 March 2021.
  5. Onyekachi Umah, “Who Are The Shareholders Of The Central Bank Of Nigeria” (LearnNigerianLaws.com, 7 February 2019) <https://learnnigerianlaws.com/daily-law-tips-by-onyekachi-umah-esq-tip-263-who-are-the-shareholders-of-the-central-bank-of-nigeria/> accessed 28 March 2021
  6. Onyekachi Umah, ”How To Prove That A Bank Is Licensed In Nigeria” (LearnNigerianLaws.com, 30 March 2019) <https://learnnigerianlaws.com/how-to-prove-that-a-bank-is-licensed-in-nigeria-daily-law-tips-tip-300-by-onyekachi-umah-esq-llm-aciarb-uk/> accessed 28 March 2021
  7. Onyekachi Umah, “Contents Of A Genuine ATM Receipt In Nigeria” (LearnNigerianLaws.com, 19 March 2019) <https://learnnigerianlaws.com/contents-of-a-genuine-atm-receipt-in-nigeria-daily-law-tips-tip-292-by-onyekachi-umah-esq-llm-aciarb-uk/> accessed 28 March 2021
  8. Onyekachi Umah, “Is It Illegal To Spray Or Dance On Naira Notes (Money) In Nigeria” (LearnNigerianLaws..com, 21 December 2018) <https://learnnigerianlaws.com/daily-law-tips-by-onyekachi-umah-esq-tip-254-is-it-illegal-to-spray-or-dance-on-naira-notes-money-in-nigeria/> accessed 28 March 2021
  9. Onyekachi Umah, “No Bank In Nigeria Can Unilaterally Change /Vary Interest Rate In Its Agreement With A Customer” (LearnNigerianLaws.com, 23 August 2018) <https://learnnigerianlaws.com/daily-law-tips-by-onyekachi-umah-esq-tip-168-no-bank-in-nigeria-can-unilaterally-change-vary-interest-rate-in-its-agreement-with-a-customer/> accessed 28 March 2021
  10. Onyekachi Umah, “Use/Demand for Foreign Currency in Nigeria is a Crime” (LearnNigerianLaws.com, 7 June 2018) <https://learnnigerianlaws.com/daily-law-tips-by-onyekachi-umah-esq-tip-117-use-demand-for-foreign-currency-in-nigeria-is-a-crime/> accessed 28 March 2021

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