Following the prevalence of misconduct in banks and other financial institutions in the past few years, the Central Bank of Nigeria (CBN) said Tuesday that it had developed guidelines for whistle-blowing in banks.


The apex bank also disclosed that it was currently reviewing its extant code of corporate governance for banks.


The banking sector watchdog, which made these known in a circular titled: “Exposure Drafts of the Revised Code of Corporate Governance for Banks in Nigeria and the Guideline for Whistle-blowing in the Nigerian Banking Industry,” posted on its website yesterday, called for the input of stakeholders on the matter.


Whistle-blowing, therefore, is the reporting of alleged unethical conduct of employees, management, directors and other stakeholders of an institution by an employee or other person to appropriate authorities.


A whistle-blower is any person(s) including the employee, management, directors, depositors, service providers, creditors and other stakeholder (s) of an institution who reports any form of unethical behaviour or dishonesty to the appropriate authority.


The CBN stressed that the move became important as “the banking system relies on the effective operation of a range of ‘integrity systems’ for keeping the institutions and their management honest and accountable. One of such system is whistle-blowing.”
It said that a compliance date, which shall be mandatory for all banks would soon be fixed.


The CBN said: “Banks and Other Financial Institutions (OFIs) are expected to forward copies of their whistle-blowing guidelines to the CBN within three months, effective from the date of issuance of the guidelines.


“Banks and OFIs shall render quarterly reports on their compliance with the provisions of whistle-blowing guidelines along with their corporate governance status returns. The external auditors of each bank and OFIs shall report annually to the CBN, the extent of banks and OFI.”


According to the CBN, the objective of whistle-blowing mechanism was to encourage stakeholders to bring unethical conduct and illegal violations to the attention of an internal and or external authority so that action would be taken to resolve the problem.


It explained: “This will minimise the institution’s exposure to the damage that can occur when internal mechanisms are circumvented. It will also demonstrate to stakeholders that the institution is serious about adherence to codes of ethics and conduct.


“It is believed that an effective whistle-blowing mechanism in banks and OFIs in the country would go a long way in entrenching good corporate governance. However, in order to gain the protection afforded to whistle-blowers by this guideline, such disclosures must actually be made in good faith and the information provided must also be substantially true.”


The whistle-blowing mechanism, according to the regulator, shall include a dedicated “hot-line” or e-mail and other electronic devices that could be used anonymously to report unethical practices.

http://www.thisdaylive.com/articles/cbn-moves-to-strengthen-whistle-blowing-in-banks/121880/