NDIC Decries Rise In Non-Performing Insider Loans In Banks

NDIC, Bank LoansThe Managing Director/Chief Executive of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim has expressed concern over the increasing wave of non-performing insider loans in various banks and its consequence on the stability of the nation’s banking system. 

Alhaji Ibrahim expressed this concern while receiving the newly elected President and Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Professor Segun Ajibola and some of his executive members who paid a courtesy call on the NDIC Senior Management in Abuja.

According to him, the development had posed credibility questions which were capable of eroding public confidence in the banking system.

He called for strict compliance with the existing code of conduct and a review of the existing laws and regulations to provide stiffer penalties for directors who take advantage of their positions and fail to pay back their loans.

The NDIC CEO observed that the situation in which casual staff accounted for about 25% of the banking industry workforce, had a negative impact on the industry.

Alhaji Ibrahim noted with concern the practice of some banks that assign sensitive roles to casual staff; thereby exposing the banking industry to cases of fraud and forgeries.

Speaking on the recent staff rationalisation embarked upon by banks, Alhaji Ibrahim urged the banks to exercise caution so as not to create industrial unrest in the industry.

He called on the CIBN to intervene by advising its members on the aim of the rationalisation which should be to weed out bad eggs from the industry.

The NDIC CEO emphasized that the Corporation would continue to partner with the CIBN and other professional bodies towards achieving effective capacity building among its staff.

Alhaji Ibrahim disclosed that 77 members of staff of the Corporation were currently undergoing the Bangor/CB MBA programme which commenced three years ago.

The Bangor/CB MBA programme is an initiative of the NDIC, the CIBN and the Bangor University, Scotland where staff of the Corporation undergo up to 24 months training programme and graduate with dual certification: an MBA and Chartered Banker of Scotland.  Fourteen (14) members of staff had already graduated from the programme.

He further requested the CIBN to fast track the accreditation of the Corporation’s training academy and the introduction of the Deposit Insurance System (DIS) in the institute’s curricula in order to broaden the scope of professionalism in the banking industry.

In his response, the President/Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Prof. Segun Ajibola, expressed the appreciation of the CIBN to the Corporation for positive contributions to the activities and programmes of the Institute and its support towards the establishment of the CIBN Bankers House in Abuja.

Prof. Ajibola also commended the Corporation for its contribution in ensuring stability in the banking system.

The President/Chairman of Council of the CIBN assured the MD/CEO that the accreditation committee of the institute would soon visit the NDIC Academy.

He, however, appealed to the MD/CEO on the need for further collaboration with the institute on training and other issues of mutual interest.

On staff casualization in the banks, Prof. Ajibola pledged to table the matter at the CIBN’s next meeting with banks’ CEOs with a view to addressing the issues.

He stated that efforts were being put in place by the CIBN to enhance the capacity of bank staff, particularly in credit administration.

2013 Economic Review: Analysts Advocate Support For Local Industry

Experts in Nigeria’s banking and commerce industries have emphasized the need for Nigeria to develop infrastructure if its dream of building local industry would be fulfilled in the year 2014.

A Member of the Chartered Institute of Bankers of Nigeria, CIBN, Alex Ananeje, made this statement while appearing on the breakfast programme, Sunrise on Channels Television.

A Director of the Lagos Chamber of Commerce and Industry, LCCI, Dele Alimi, who was also a guest on the programme, added that there is no way the Nigerian economy can grow if the government does not provide an enabling environment for local businesses to thrive.

On its final edition for the year 2013, the programme sought to do a review of Nigeria’s performance during the year, and according to Alimi, “If we solve the problem of power in Nigeria, you will be shocked at the level of growth that will follow.”

While making his case for the Small and Medium Enterprises, SMEs, Mr Alimi noted that statistics have shown that SMEs are responsible for over 30 million jobs in Nigeria. A figure he said means that they actually drive the economy. Therefore the country cannot afford to let the sector suffer.

Although, he agreed that the structure of many SMEs in Nigeria is not good enough, especially when the need to access funding is concerned, as only few lenders would want to release money to some of these small businesses considering the way they are run, but because the country needs that sector to thrive, then it must do all things to help business owners restructure their ventures; a role he said the Lagos Chamber of Commerce and Industry, LCCI, has been taking seriously.

Looking back at 2013, Mr Ananeje said that we (Nigeria) “could have done better as far as our economy is concerned”

Mr Alimi however added a different perspective to how much below par Nigeria’s economic performance had been during the year. He said that the cost of governance in Nigeria is too high, and there have been no real efforts to bring it down.

He alleged that the efforts made by the government, claiming to have reduced the salaries of government officials are deceptive, arguing that they only reduced their basic salaries while the large allowances are still being paid.

He asked for renewed policies to drive the economy, starting with developing programmes that will affect the people directly; from the farmers to the barbershop owners. He said that we need to build an economy where a barber can start his business without first bothering about acquiring a power generator.

Looking ahead, Alex Ananeje warned that the country is going to have some serious challenges in 2014, especially for the Central Bank of Nigeria, CBN: “We are entering the election year and more money will be pumped into the system, there has to be a stronger monetary policy put in place”


CBN Autonomy Debate: CIBN Lacks Resources For Banks’ Supervision – Bank Examiner

A former Bank Examiner, Bandele Olusegun on Wednesday faulted plans to cede banks’ supervisory function to the Chartered Institute of Bankers of Nigeria (CIBN).

Mr Olusegun, who was a guest on Channels Television’s breakfast programme, Sunrise Daily, said the CIBN does not have the resources to conduct examinations and supervision for banks in Nigeria.

“The CIBN cannot do it because of the fact that they wouldn’t have the resources to carry it out,” he said.

The former bank examiner said CIBN’s major source of revenue is from subscription from its members and that it takes an average of three months to conduct a proper bank examination which cost a lot of money the institute cannot afford.

The Chairman of the House Committee on Banking and Currency, Jones Onyereri gave hint of the plans of the National Assembly to cede bank supervision to the CIBN during the special ACIB induction for the pioneering graduates of the Chartered Bank MBA of the institute.

Mr Onyereri said the move would be the main focus of the lawmakers this year, to ensure that it excises the supervisory role from CBN.

The lawmakers had initiated moves to amend CBN’s Act that would have compromised the apex bank’s autonomy, but the plan was stalled due to stiff opposition from stakeholders.

The amendment, among other things, sought to remove the bank’s governor, deputy governors and executive directors from the bank’s board, provides for a former governor of CBN to chair the board, while also stripping the board the power of consideration and approval of its yearly budget.

CBN Act Amendment: Look Beyond Sanusi, Analyst Urges National Assembly

A financial consultant, Eddie Osarenkhoe has cautioned the National Assembly not to allow their grouse with the governor of the Central Bank of Nigeria (CBN), Lamido Sanusi to influence their judgements in seeking the amendment of the act establishing the apex bank.

Speaking on Wednesday as a guest on Channels Television’s breakfast programme, Sunrise Daily, Mr Osarenkhoe said rather than act on the spur of the moment, the National Assembly should consider and seek to improve the systems and processes in the CBN.

“The same CBN have been there all along and they (the National Assembly) never raised the eyebrow they’ve raised. Maybe it is because there was change in the headship and he (Mr Sanusi) came out with some strong policies which actually shook the economy that is why there was this uproar,” he said.

Two bills – one before the Senate and the other in the House of Representatives – seek to amend the CBN Act Cap C4, Laws of the Federation of Nigeria, 2004, to compel the CBN to submit its annual budget to the National Assembly and for matters connected thereto.

While the Senate’s bill was published in the National Assembly Journal Volume 8, number 54 of April 13, 2012, and registered as Senate Bill 75, the House of Reps’ bill seeks to amend Section 6(2) of the CBN Act (2007) to remove the CBN governor as chairman of the board and exclude the deputy governors and directors as members of the board. It was published in the same journal four days after – Volume 8, number 62, dated April 17, 2012, and dubbed HB.12.03.276.

Both bills seek to divest the board of the CBN of its powers to appropriate and approve the annual budgetary estimates of the bank, contrary to Section 6 (3) (a) of the CBN Act 2007 which stipulates that the board shall be responsible for the consideration and approval of the annual budget of the bank.