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GTCO, Other 9 Banks Face Heavy Fines Amid Regulatory Scrutiny

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GTBank’s infractions were not limited to Nigeria. The bank was also fined in Ghana and Rwanda for similar breaches of foreign exchange operational guidelines, with penalties amounting to an equivalent of N1.297 billion in Ghana and a breakdown of the sanctions from Rwanda indicated that GTCO got a N560,000 for non-compliance nited for the bank taking fee which are nit allowed by the regulator and a N311,000 fine for non-compliance with exchange rate  applied by commercial banks in Rwanda. – The ICIR report

Abdulrahman Aliagan,

In a significant crackdown on foreign exchange violations, Guaranty Trust Bank (GTBank) and 9 other banks have been handed a hefty fine of N188.25 million by the Central Bank of Nigeria (CBN). This penalty stems from a series of infractions uncovered during the CBN’s 2023 Foreign Exchange Examination, violations of consumer protection regulations, and compliance-related issues highlighted in the recent 2024 Mystery Shopping Exercise.

The CBN’s stringent examination of GTBank and other nine

(9) banks is part of a broader regulatory effort that has seen ten banks in Nigeria sanctioned for breaching foreign exchange guidelines and other compliance issues.

The total fines imposed across these institutions have reached a staggering N1.502 billion in the first half of 2024 alone, underscoring the ongoing challenges banks face in adhering to the regulatory framework designed to protect the integrity of the financial system.

Among the banks penalized alongside GTBank are notable names such as Access Bank, Zenith Bank, and First City Monument Bank. Zenith Bank incurred the largest penalty at N427 million, followed closely by Access Bank at N300 million. UBA and Stanbic IBTC also faced steep fines of N279 million and N229 million, respectively.

GTBank’s infractions were not limited to Nigeria. The bank was also fined in Ghana and Rwanda for similar breaches of foreign exchange operational guidelines, with penalties amounting to an equivalent of N1.297 billion in Ghana and a breakdown of the sanctions from Rwanda indicated that GTCO got a N560,000 for non-compliance noted for the bank taking fee which are not allowed by the regulator and a N311,000 fine for non-compliance with exchange rate  applied by commercial banks in Rwanda, ICIR reports. This international scrutiny raises questions about the bank’s compliance culture and operational integrity across borders.

In the wake of these penalties, civil society organizations have raised alarms about the transparency of financial operations at major banks. Alhaji Yusuf Kabir, President of the Arewa Consultative Movement, has called for a forensic audit of GTCO’s financial statements, particularly given the bank’s historic profits in the sector.

Responding to these concerns, the CBN reaffirmed its commitment to ensuring the stability of Nigeria’s financial system. In a recent statement, the bank emphasized the importance of regular stress tests, which are conducted to identify potential vulnerabilities in financial institutions before they escalate into systemic risks.

As the financial landscape continues to evolve, the repercussions of these regulatory actions extend beyond mere financial penalties. They serve as a reminder to all banks operating in Nigeria that compliance is not optional; it is a fundamental aspect of maintaining trust and stability in the financial system.

With GTBank now facing heightened scrutiny and a significant financial burden, the question remains: can the bank restore confidence among its stakeholders while navigating the turbulent waters of regulatory compliance?

The coming days, months and years will be crucial as GTBank and its peers work to address the challenges posed by both regulatory authorities and the public’s demand for greater transparency and accountability.

Aliagan writes from Abuja.

   

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Time Nigeria is a modern and general interest Magazine with its Headquarters in Abuja. The Magazine has a remarkable difference in editorial philosophy and goals, it adheres strictly to the ethics of Journalism by using the finest ethos of the profession to promote peace among citizens; identifying and harnessing the nation’s vast resources; celebrating achievements of government agencies, individuals, groups and corporate organizations and above all, repositioning Nigeria for the needed growth and development. Time Nigeria gives emphasis to places and issues that have not been given adequate attention by others. The Magazine is national in outlook and is currently being read and patronized both in print and on our vibrant and active online platform (www.timenigeria.com).
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The Missing Middle of Infrastructure Finance: Why Capital Still Fails to Become Infrastructure

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  By Chidi Nwafor  In October 2023, a Gulf sovereign wealth fund quietly closed a $2 billion allocation to global infrastructure, earmarked in part for emerging-market energy and transport assets. The announcement drew the usual applause: another sign, commentators said, that institutional capital was finally waking up to the infrastructure opportunity in the Global South. Eighteen months later, less than a tenth of that allocation had actually left the fund’s balance sheet. Not because the mandate had changed. Not because the fund had lost appetite. According to two people familiar with the portfolio, the constraint was simpler and more uncomfortable: there were not enough investable projects to put the money into. This is not a story about a reluctant investor. It is a story about capital that wants to move, cannot find enough places willing and able to receive it in a form it can underwrite, and quietly waits instead. Multiply that fund by the hundreds of pension schemes, sovereign wealth vehicles, commercial banks and infrastructure funds now carrying dedicated allocations for emerging-market infrastructure, and a pattern emerges that rarely makes it into a headline: the world is not short of capital for infrastructure. It has capital in historic abundance, sitting adjacent to a historic infrastructure gap, unable to cross the distance between the two. The Comfortable Explanation  The explanation on offer at every major infrastructure summit is a familiar one. Global infrastructure investment needs run into the tens of trillions of dollars over the coming decade; committed capital falls well short; therefore, the problem is one of insufficient funding, and the solution is more of it: more pledges, more blended-finance facilities, more climate funds, more multilateral capital increases. It is a comfortable explanation because it assigns responsibility clearly to governments who under-fund, institutions who under-commit, and it offers a clean remedy: raise more. It is also, on close inspection, not what the evidence shows. Pension funds globally hold trillions in assets under management with explicit infrastructure allocations that remain structurally underweight, not because trustees have rejected the asset class but because deal flow meeting their risk and governance thresholds has not materialised at the pace their mandates assume. Sovereign wealth funds report the same pattern. Commercial banks with dedicated project finance desks describe pipelines that look full at the term-sheet stage and thin dramatically by financial close. Development finance institutions, whose entire purpose is to absorb risk that commercial capital will not, routinely report that their binding constraint is not capital adequacy but the volume of bankable transactions their teams can originate and structure in a given year. None of this fits the scarcity narrative. All of it fits a different one. Availability Is Not Deployability  Capital availability and capital deployability are not the same condition, and the conflation of the two is doing real damage to how the world thinks about the infrastructure gap. Availability asks whether money exists somewhere with a mandate that could, in principle, be pointed at infrastructure. Deployability asks something much narrower and much harder: whether a specific project, at a specific moment, has been engineered, structured, documented and de-risked to the point where an investment committee can approve it without exception. The first condition is met, overwhelmingly, across nearly every category of capital that matters to infrastructure. The second is met by only a small fraction of the projects competing for it. The result is a market that looks, from the outside, like a financing gap, and functions, from the inside, like a conversion problem: an abundance of capital on one side, an abundance of infrastructure need on the other, and an underbuilt set of mechanisms in between capable of turning one into the other at any meaningful scale. Where the Conversion Breaks  The break does not happen at the ends of the process. It happens in the middle, in the unglamorous sequence of work that turns a plausible concept into an instrument a fiduciary can sign. A promising transmission project needs a feasibility study rigorous enough to survive institutional scrutiny rather than optimistic enough to attract early interest. It needs offtake arrangements that hold up under real counterparty and currency risk, not the counterparty risk assumed in a base case. It needs environmental and social documentation calibrated to the standards of the institutions being asked to fund it, not the standards of the jurisdiction hosting it. It needs a legal and commercial structure that allocates risk in ways a commercial lender, not only a development financier, will accept. It needs a sponsor capable of executing what has been proposed, not merely capable of proposing it. Each of these is ordinary project finance discipline. None of it is exotic, and in mature infrastructure markets it happens as a matter of course, absorbed into systems built over decades: specialist advisers, standard-form contracts, established procurement norms, deep pools of transaction expertise. What is missing in the markets where the infrastructure gap is largest is not the standard itself but the machinery that meets it. Projects arrive at investment committees with ambition intact and preparation incomplete, and that gap is treated, again and again, as an individual project’s failure rather than what it actually is: a structural absence in the systems responsible for producing investable transactions at scale. The Missing Middle  This is the Missing Middle of Infrastructure Finance: the institutional architecture that sits between capital that wants to move and infrastructure that needs building, and whose incompleteness explains far more of the global infrastructure gap than any shortfall in committed funds. It consists of project preparation facilities able to fund feasibility and structuring work before commercial viability has been proven. Transaction advisers capable of building deals that satisfy development mandates and commercial return thresholds at once, rather than treating the two as separate constituencies to be managed sequentially. Risk-sharing and guarantee instruments that convert political, regulatory and currency risk into something a commercial balance sheet can underwrite. Aggregation platforms that bundle smaller, individually sub-scale projects into portfolios large enough to justify institutional transaction costs. Standardised documentation that reduces the bespoke legal cost of every new deal. And coordination across ministries, regulators and financiers robust enough that a technically sound project does not die in bureaucratic sequencing after the money has already been found. 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The African Dimension  Africa makes this dynamic unusually visible, and consequently offers an unusually clear opportunity to correct it. The continent’s infrastructure financing need, by any measure, is vast. Less understood is that the shortfall is disproportionately one of preparation rather than capital. Nigerian gas-to-power, off-grid solar and mini-grid developers have each demonstrated that individual projects can clear the bankability bar; what has not emerged is systemic pipeline scale, a steady stream of comparably prepared projects large enough to absorb the capital already circling the sector. The pattern repeats, with local variation, from grid infrastructure in East Africa to transport corridors in West Africa. Interested capital is rarely the scarce input. Investment-ready projects are. 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