Bank Supervision

INTRODUCTION

In any field of human endeavour, the place of supervision tends to assume an all important position, the place of supervision in the banking industry most especially the commercial bank cannot be down played.Orjih (2011:25) often, insider misconducts are discovered during examination of the accounting records of those commercial banks by the CBN, being one of the key supervisory institution in Nigeria.Adelusi (1994) opined that misconduct might equally be brought to the attention of CBN by the management of commercial banks or through the filling of suspicious activity report. The CBN and other supervisory agencies of government have brand discretion in determining the appropriate enforcement remedy to address fraud and other misconduct committed by insiders against depository institutions.Adeyemi (1990) in determining whether and what kind of enforcement action is appropriate, the CBN has traditionally considered whet her the proposed remedy is likely to achieve the particular supervisory objectives because cases are fact specific and present unique circumstances, the administrative remedies are determined on a case-by-case basic.According to Sullivan (2009) stated that the supervisory agents boards of directors has delegated authority to the management of commercial banks to issues notice or orders against institution affiliated parties for removal for removal/ prohibition action for assessments of civil penalties (CMPS) and for restitution. The use of the full range of enforcement tools is particularly appropriate in cases involving inside fraud.

A common remedy action under section 80 of the federal deposit insurance act. A prohibition order issues under section 8(e) has been interpreted to impose an industry wide to another institution and repeating the same or other forms of fraud.

Zachary (1991) the incentives for financial gain from an individual misconduct. Its punishes the particular offender deter similar abuses by the individual being penalized and by the according to Zachary (1991) by the institution may be warranted to the internal control weakness. In addition, reimbursement of losses or disgorgements of unjust gains by the individuals may be appropriate.When examine, believes that matters are being misrepresented or documentation is inadequate especially where evidence is in the possession of third parties outside the bank, the FDIC as a supervisory agent of government may initiate an investigation under the power conferred by section 1(C) of FDI act. Those powers include the ability to subpoena ingression, administer, oaths, take and preserve testimony under oath and require the production of records.The investigations may be conducted simultaneously with criminal investigation by Economical and financial crime commission (EFCC) or state criminal authorities in the case of parallel criminal proceeding, the Nigerian Deposit Insurance Corporation (NDJC) will co-ordinate with respective criminal authority and seek to obtain a stipulation to prohibition action and to a CMP or criminal plea agreement where the criminal persecutor has made not formal request it.

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