BANKS AND OTHER FINANCIAL INSTITUTIONS ACT 25 OF 1991

The Banks and Other Financial Institutions Act 1991(BOFIA) regulates the
operations of banks and other financial institutions in Nigeria.

Publication of annual accounts of banks

(a) Subject to the prior approval in writing of the Central Bank, a bank,
shall not later than four months after the end of its financial year:
(i) cause to be published in a daily newspaper printed in and
circulating in Nigeria and approved by the Central Bank;
(ii) exhibit in a conspicuous position in each of its offices and
branches in Nigeria; and
(b) Forward to the Central Bank, copies of the bank’s balance sheet and
profit and loss account duly signed and containing the full and correct
names of the directors of the bank.
(c) Every published account of a bank shall disclose, in detail, penalties
paid as a result of contravention of the provisions of this Act and
provisions of any policy guidelines in force during the financial year in
question and the auditor’s report shall reflect such contravention;
(d) The balance sheet and profit and loss account of a bank shall bear on
their face the report of an approved auditor and shall contain statements
on such matters as may be specified by the Bank, from time to time;
(e) For the purpose of subsection (3) of this section, an “approved auditor”
shall be an auditor approved for the purpose of section 29 of this Act;
and
(f) Any bank which fails to comply with any of the requirements of this
section is in respect of each such failure guilty of an offence and liable
on conviction to a fine of N10,000 each day during which the offence
continues. (Section 27).

Contents and form of accounts

(a) Every balance sheet and every profit and loss account of a bank shall
give a true and fair view of the state of affairs of the bank as at the end
of the reporting period;
(b) Every balance sheet and every profit and loss account of a bank forwarded
to the Bank shall comply with the requirements of any circular which
has been issued by the Central Bank thereon; and
(c) Any person being a director of any bank who fails to take all reasonable
steps to secure compliance with any of the prescribed provisions in
respect of any account is guilty of an offence and liable to pay to the
Bank a fine of N1,000 or to imprisonment for five years or to both such
fine and imprisonment. (Section 28).

Appointment, power and report of approved auditor

(a) Every bank shall appoint annually a person approved by the Central
Bank, referred to as “approved auditor”, whose duties shall be to make
to the shareholders a report upon the annual balance sheet and profit
and loss account of the bank and every such report shall contain
statements as to the matters and such other information as may be
prescribed, from time to time, by the Central Bank;
(b) For the purpose of this section, the approved auditor shall be an auditor
who is:
(a) a member of one of the professional bodies recognised in Nigeria;
(b) approved by the Central Bank;
(c) resident in Nigeria; and
(d) carrying on in Nigeria professional practice as accountant and
auditor.
(c) Any person:
(i) having any interest in a bank otherwise than as a depositor;
(ii) who is a director, officer or agent of a bank;
(iii) which is a firm in which a director of a bank has any interest as
partner or director;
(iv) who is indebted to a bank, shall not be eligible for appointment
as the approved auditor for that bank; and
(v) a person appointed as such auditor who subsequently:
! acquires such interest; or
! becomes a director, officer or agent of the bank; or
! becomes indebted to a partner in a firm in which a director
of a bank is interested as partner or director, shall cease
to be such auditor.
(d) If any bank fails to appoint an approved auditor, the Central Bank shall
appoint a suitable person for that purpose and shall fix the remuneration
to be paid by the bank to such auditor;
(e) Any approved auditor who acts in contravention of or fails deliberately
or negligently to comply with any of the required provisions is guilty of
an offence and liable on conviction to pay to the Central Bank a fine of
not less than N200,000 and not exceeding N500,000;
(f) The report of the approved auditor shall be read together with the report
of the board of directors at the annual general meeting of the
shareholders of the bank and two copies of each report with the auditor’s
analysis of bad and doubtful advances in a form specified, from time to
time, by the Central Bank shall be sent to the Central Bank.
(g) If an auditor appointed under this section, in the course of his duties as
an auditor of a bank, is satisfied that:
(i) there has been a contravention of this Act, or that an offence under
any other law has been committed by the bank or any other
person; or
(ii) losses have been incurred by the bank which substantially reduce
its capital funds; or
(iii) any irregularity which jeopardises the interest of depositors or
creditors of the bank, or any other irregularity has occurred; or
(iv) he is unable to confirm that the claims of depositors or creditors
are covered by the assets of the bank, and he shall immediately
report the matter to the Central Bank.
(h) The approved auditor shall forward to the Central Bank two copies of
the domestic report on the bank’s activities not later than three months
after the end of the bank’s financial year.
(i) Any approved auditor who acts in contravention of or fails deliberately
or negligently to comply with any of the required provisions is guilty of
an offence and liable on conviction to a fine not exceeding 500,000
and where the approved auditor is a firm, the individual partner or
partners shall in addition be liable on conviction to imprisonment for a
term not exceeding five years and to the fine required to be paid by the
firm.
(j) The appointment of an approved auditor shall not be determined without
prior approval of the Central Bank. (Section 29).

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