You will be disappointed if you think of this topic as a forum to provide lecture on banking industry or banking profession. My discussions in this article transcend the mediocre definition and functions of bank and banker. I will be articulating my views and appraisals on the current situations in Nigeria Banking Industry and its effects on Nigeria economy and Nigerians in general.
To this end, I would like to espouse this statement to clarity, so that the readers can be on the same page or at least be insightful of my premise. According to Wikipedia Encyclopedia, “a bank is a financial institution that is licensed by a government. Its primary activities include borrowing and lending money. They are important players in financial market and offer financial services such as investment funds”. Nigeria banks regardless of its type, formation or composition are not eschew of this responsibilities. They are regulated by the government laws that guides the functions and activities of Banking Industry.
Saddled with the responsibilities of credit intermediation; that is, power to borrow and lend back-to-back on their own account as middle men; and credit quality improvement, which is the ability to lend to ordinary commercial and personal borrowers especially high quality borrowers, Nigerian banking industries continue to perform its traditional banking responsibilities, inhibited only by Nigerian factor !
The Nigeria factor in this circumstance is referred to the “endemic corruption” that has permeated the Banking and Financial institutions. Banking profession like any other profession in a civilized society requires people of verifiable character and impeccable integrity. Individuals who are transparently honest and dedicated to uphold professional ethics. Unfortunately, banking industry in Nigeria is peopled by most individuals who are deficient in honesty and integrity. They are set of angrily-hungry opportunists who on the face value, appeared holy, with different religious titles, clout and labels. They identified with and carries membership cards of Mega-Pentecostal Churches. They sit in the front rows, speak in “fabricated tongues” and quotes scriptures off their heads , all to disguise their true identity and ensnare further their innocent victims.
The problem with the banking industry is not new. It’s been on-going for the last decade or so. While the politicians and the officials of government business covertly pillage the national treasury with impunity, the bankers and allied workers in the financial institutions defraud the banking institutions. For instance, in 1996 I lost a huge savings with the collapsed Allied Bank Nigeria Limited. The reason given was that the bank was defrauded by some workers who broke through the bank’s strong room and fled with the customers money in multiple of millions of Naira. The NDIC has nothing to offer in form of compensation. The apex bank (Central Bank of Nigeria) allowed the problem to go un-addressed, the State Security System was unable to pursue and apprehend the culprits and the FGN was ubiquitously indeferent. Innocent customers such as myself suffered the greed and poor management of the then bank director/CEO or whatever his or her title was . How many more Nigerians needed to be plagued by this dare-devil before government take charge of the responsibility ?
God give us men, time like this demand, men that will stand tall, talk tough and act right. Men that would prioritize the needs of others over their needs and ensure a better life for all. Men like Jerry Rawlings who will have the courage to assemble all the greed and corrupt parasites and wipe them out, men with the firmness of Moamar Ghadafi who will stand tall and tell the good for nothing so called statesmen to stay off the passage of progress or become tales of the revolution, men like Barrack Obama who would confront ineptitudes of public servants and advocate for strong institutions instead of strong leaders. A man or group of men that will restore sanity and rebuild peoples confidence to the body polity including the financial institutions.
Possibly such a man is in Sanusi Lamido Sanusi- the head of the country’s apex bank- (CBN). On August 14, 2009 the Governor of CBN sacked five bank chief executive officers : Dr. Cecilia Ibru (Oceanic Bank); Mr. Bartholomew Ebong (Union Bank); Dr. Erastus Akingbola (Intercontinental Bank); Sebastine Adigwe (Afribank) and Mr. Okey Nwosu of the Finbank. The reason for their dismissal according to the CBN was that there were signs of distress in their banks as well as huge debt portfolio totaling about N2.9 trillion which is made up of N456.25 billion margin loans; N487.02 billion exposure to oil and gas sector; N1.2 trillion aggregate non-performing loans; and N127.8 billion inter bank net guarantee.
The issue at stake here is not that the bank executives lend money to their customers, of course that is one of the traditional functions that preempted the formation of a bank. However, the concerns is that the aggregates of the CEO (the sacked five), has engaged in fraudulent abuse of credit process, insider trading, capital manipulation and money laundering running into billions of Naira. Consequently, if immediate intervention is ignored, the banks will eventually collapse. The investors and private customers will suffer great loss. The capital market will share in its spill-over effect, thus bring monumental loss to the nations capital market and ignite international mistrust.
The sacked CEOs and others that will soon be apprehend by the duo of the CBN and EFCC had conscious but ignobly down played the concept of integrity and professional ethics by denying honest citizens and small business owners of the much needed loans to sustain their business. They choose to dole money out to their friends, pastors, political god-fathers and bank role the businesses of the dishonest who-is-who in the political circles, who are high risk borrowers.
It is counter intuitive to articulate an argument that exonerate the five CEOs of lending money to high risk but well place individuals in the society. By virtue of their credentials which in the real sense is self selling, they knew the implications of their actions and the consequence of indifference. Ironically, they opted to please persons instead of their conscience; they jettisoned professional ethics and ignored the spirit of patriotism and nationalism. Otherwise how one could explains Erastus Akingbola’s approval of loan to finance Pastor Adeboye’s (his pastor) private jet? or other CEO s decision to provide margin loans to powerful persons in the society, such as Mike Okiro the former Inspector General of Police who was reported to have refused to pay the loan of N166 million which he secured for his family business – (Hekiro Nigeria Limited) from the collapsed Lead Merchant bank without collateral but with poor and discrepant documentations?
The conspiracy theorist argued that the CBN Governor Sanusi Lamido Sanusi (a Northerner) came to office with hidden agenda. He was reported to be uncomfortable with the policy of his predecessor – Professor Chukwuma Soludo. Policy such as bank consolidation, which left the North with one bank, leaving the South with 23 banks. He was said to be unhappy with the decision of his predecessor to yank off the Arabic inscription on the Naira notes; as well as an attempt to crowd the North out of the foreign market by classifying the Bureau de Change (BDC) into “A”, “B”, and “C”, which made it impossible for all the operators to access the CBN foreign exchange window. Re denomination of Naira was also said to be frowned at by Sanusi who was thought to have seen the action as a policy against the bureau de change operators.
Against this background, on assumption of office by Sanusi Lamido Sanusi as the new CBN boss, he liberalized the forex market which affords the BDC ope
rators accessibility to participate in forex market. Sanusi is believed to be aiming the inscription of Arabic on Naira notes, licensing more banks to the North with low capital base and shrinking the Southern banks from 23 to 15 even before the outcome of his instituted Banking Audit Committee. The CBN Governor is therefore advised to tread cautiously because history has proved that most rushed decisions are rash and erratic. While the governor has the right to review policies, especially policies that are considered inimical to the national interest; such action should be without bitterness or intentioned to gall-up self ego and discredit predecessor.
Never-the-less, the CBN Governor should be applauded for standing tall and addressing the problem of corruption that threatens Nigeria financial institutions. His action, at least on the surface has started to yield result. For instance; some of the big and the powerful, the erstwhile sacred cow has started paying back their debts. As at August 21, 2009 about N18 billion was reported to have been recovered from debtors of the five distressed banks. (Intercontinental Bank Plc. recovered N4.8 billion, Afribank Plc. recovered N3 billion, Oceanic Plc. N4.5 billion and Union Bank N6 billion). Ibrahim Jimoh – The Group Managing Director of Global Fleet paid Oceanic Bank Plc the whopping sum of N8 billion on August 24, 2009, Alhaji Aliko Dangote was reported to have paid the sum of N3.1 billion to Oceanic bank on Thursday August 20, 2009. The recovery is expected to be on-going till all or almost all the money (total N747 billion) owed to the five banks are recovered.
The debtors are institutions and individuals such as Alhaji Musa Bashir, Abba Dasuki, Chudi Ajaegbu and Chiamaka Ajaegbu, Bashir Adamu, Ndi Okereke-Onyiuke, Alhaji Abdularahaman Bashir, Aliko Dangote, Femi Otedola and a host of others. While it is not out of order to borrow money to transact legitimate business, it is a crime to willingly refused to pay back the loan; because other legitimate users are prevented from benefiting from similar gesture, the bank is made vulnerable to collapse, the staff means of livelihood is threatened. a lost job will consequently shift the burden of pain back to their family and ultimately to the society.
To this end, the CBN governor is encourage to work collaboratively with the Chairperson of the EFCC, the Ministry of Justice, the Police, etc to pursue and recover all the unpaid outstanding loans. However, if for any reason other than insolvency, any or all of these debtors refused to pay or make commitment to repay their loans, the EFCC should not hesitate to enforce Section 42 of the Establishment Act 2004, which states that ” any offence committed or proceedings instituted before the commencement of this Act under the provisions of the (a) miscellaneous Offences Act (b) the Banks or other Financial Institutions Act 1991 as amended; (c) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, as amended (d) the Advance Fee Fraud and Other Related Offences Act (e) the Money Laundry Act or any other law or regulating to Economic and Financial Crimes, shall as the case may be, required to be enforced or continued to be enforced by the commission.”
However, if it is true that the CBN Governor came to power to promote Northern agenda or Arab interest as opposed to advancing the collective interest of Nigeria nation, a mass revolt would be ignited across the spheres; including Nigerians in Diaspora. Nigerians once again would be call to stand and address the excess of the CBN governor. Sanusi’s integrity and judgment would be question. Probably, it would lead to a referendum or plebesite where the continue existence of Nigeria as a secular state will be review and determine once and for all. Nigeria is neither a Muslim country nor a Christian nation. The country belongs to the Muslims, the Christians and the traditional religion practitioners that cut across the diverse multi-ethnicity that made up of the country; whoever that is not satisfy with this status quo is free to relocate to country of his or her choice be it Mali, Chad, Saudi Arabia or anywhere in the globe .
While this article is not intentioned to address insinuations of the conspiracy theorists, its probability and consequence can not be ignored. But in the interim, the Governor of the CBN, working in collaboration with the EFCC, the Presidency and the Ministry of Justice should leave no stone unturned in ensuring that the nations Banking and Financial institutions is rid off ludicrous culture of impropriety and immoral debris. The era of New banking based on flawless act should commence.