BETWEEN THE CBN AND COMMERCIAL BANKS

So, why would the Central Bank of Nigeria refuse to trust figures presented to it by Nigerian banks? We reported in the last week edition of this magazine that the management of the Central Bank of Nigeria virtually established a template of distrust for banking audit that there is an unwritten standing rule to slash 30 percent any figure presented to the CBN by commercial banks in the value of their assets claims.

 

What this mean is that the CBN without question first slash off 30 percent of the value of the assets claims of the banks and thereafter, direct the bank to rework its assets value within the figure arrived at after the slashing.

 

A source at the CBN has informed that the CBN had to resort to this measure after several encounters with some commercial banks assets value claims that were proved wrong. One of this was quite outstanding. The source informed that a commercial bank had reported in the breakdown of its assets value to have 150 built up branches. An official of the CBN had found reasons to be suspicious after conducting an examination on the bank’s assets class and decided to conduct an onsite count of the branches.

 

At the end, he found out that 30 of the branches claimed to have been built or acquired by the bank were not in existence. “This corroborated other findings of the CBN so the CBN decided to opt for a general standard of reducing assets value claims since it could not conduct on site review of assets claims of all operating banks. Though some highly respected banks are treated differently.” The source said.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: