For correspondence:-
Received: October 26, 2019 Accepted: December 21, 2019 Published: December 31, 2019
Citation: Regulatory Non-compliance Charges and Performance of Deposit Money Banks in Nigeria. Account Tax Rev 2004; 3(4):84-98 doi:
© 2004 The authors.
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Abstract
This study examinedthe effectof monetary sanctions arising from regulatory violationsonthe performance of Deposit Money Banks (DMBs) in Nigeria. Specifically, the objectives of this study are to ascertain the effect of Corporate Governance Non-complianceCharges (CGNC) and Operational Non-Compliance Charges (ONC) on the performanceof (DMBs) in Nigeria. The study adopted the ex-post facto research design using the Panel Data Technique. The study made use of secondary data obtained from the Nigerian Stock Exchange factbooks and Annual reports & accounts of the eight (8) sampled DMBs. A sample of eight (8) Domestic Systemically Important Banks (D-SIBs) based on Central Bank of Nigeria (CBN) ranking was selected using the purposive sampling technique from a population of sixteen (16) DMBs whose shares were listed on the Nigerian Stock Exchange as at December 31, 2018. To test the hypotheses, this study made use of Panel Least Square regression analysis, Grange Causality test and Hausman test assisted by E-View 9.0 statistical software. The results of the regression analyses showed thatregulatory charges for non-compliance (corporate governance non-compliance charges&operational non-compliance charges) have significant negative effect on return on equityROE) of DMBs in Nigeria.The study recommends that DMBs in Nigeria should imbibe the culture of self-regulation of CBN guidelines on corporate governance and operational compliance within the DMBs’ ethical framework. Regulatory non-compliance charges should be a Key Performance Indicator (KPI) for appraisal of the Head of Compliance Department and the Managing Directors of DMBs in Nigeria to minimise the quantum of regulatory charges for non-compliance incurred by deposit money banks in Nigeria.
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