@3doors:
Wow, u confuse urself with too much grammar  
3 questions that might bring more

Really some of those things re personal to the person that expressed them and i cant do better explaining them .
Secondly i think when post dont impress u, just allow it to be or in case you have think the person is wrong just point us to the right place make NL'S learn 4rm ur experience and deeper insight
Remember most join to learn unlike some who already knows it all

qblaze:

Princekevo claims to stay in Macau and that banks in his neighbourhood have refused to transfer LCs to Nigeria.


Here's a list of some of the licensed banks in Macau.

Tai Fung Bank Limited - Banco Tai Fung, S.A.R.L.
Wing Hang Bank Limited - Banco Weng Hang, S.A.
Banco Delta Asia Limited - Banco Delta Ásia, S.A.R.L.
China Construction Bank (Macau) Corporation Limited - Banco de Construcao da China (Macau), S.A.
Seng Heng Bank Limited - Banco Seng Heng, S.A.
Luso International Banking Limited - Banco Luso Internacional, S.A.
Banco Comercial de Macau, S.A. - Banco Comercial de Macau, S.A.
The Macau Chinese Bank Ltd. - Banco Chinês de Macau, S.A.
Banco Espírito Santo Asia Limited - Banco Espirito Santo do Oriente, S.A.
Banco Nacional Ultramarino, S.A. - Banco Nacional Ultramarino, S.A.
The Hongkong and Shanghai Banking Corporation Limited - The Hongkong and Shanghai Banking Corporation Limited
DBS Bank (Hong Kong) Limited - DBS Bank (Hong Kong) Limited
Bank of China Limited - Bank of China Limited
BNP Paribas - BNP Paribas
Citibank, N.A. - Citibank, N.A.
Standard Chartered Bank - Standard Chartered Bank
Guangdong Development Bank Co., Ltd. - Banco de Desenvolvimento de Cantão, S.A.
Bank SinoPac Company Limited - Banco SinoPac company Limited
Chong Hing Bank Limited - Chong Hing Bank Limited
The Bank of East Asia Limited - Banco da East Asia, Limitada[b]
Industrial and Commercial Bank of China Limited - Industrial and Commercial Bank of China Limited[/b]
Hang Seng Bank Limited - Hang Seng Bank Limited
CITIC Ka Wah Bank Limited - CITIC Ka Wah Bank Limited
Banco Comercial Português, S.A. - Banco Comercial Português, S.A.
Banco BPI, S.A. - Sucursal Offshore de Macau - Banco BPI, S.A. - Sucursal Offshore de Macau
Caixa Geral de Depósitos - Subsidiária Offshore de Macau, S.A. - Caixa Geral de Depósitos - Subsidiária Offshore de Macau, S.A.


Which one of them refused to transfer your LC?

Of what important will it do you exposing to you the banks i bank with or the banks my company bank with?
U jst proved me right, the internet is at ur disposal were you can google out any facts you want to, But mind you, there is always a great difference between a fact and the real truth, get real my brother and there is always an open door to the world of reality.
The first time we have pleaded with a company to even give them 2% PB to trigger their LC down to Nigeria but answer was hell NO.

Infact i was abt to raise a thread to aks the Nigerian bankers in the house if an LC can by any means be tampered with in Nigeria, coz i still not understand why companies are so scared to send their LC down to Nigeria at moment , This is jst an ordinary telegraphic advice to Nigerian bank why on earth the refusal?

@Princekevo,

It is likely that you are dealing with a small or racist bank which has a dragnet policy towards risk management. There's a reason I highlighted those banks in the list.

BNP Paribas would not reject an LC from ETB given their long standing business relationship. The same goes for ICBC which owns 20% of Stanbic. SCB and Citibank have Nigerian subsidiaries which would not reject their own LCs.

If your bank is afraid of doing business with Nigerian banks, take your business somewhere else.

qblaze:

@Princekevo,

It is likely that you are dealing with a small or racist bank which has a dragnet policy towards risk management. There's a reason I highlighted those banks in the list.

BNP Paribas would not reject an LC from ETB given their long standing business relationship. The same goes for ICBC which owns 20% of Stanbic. SCB and Citibank have Nigerian subsidiaries which would not reject their own LCs.

If your bank is afraid of doing business with Nigerian banks, take your business somewhere else.

That is exactly wht we are talking abt, Knowing how sensitive the banking sector is not to a country like Nigeria with their good image at the international market. There is nothing like doing business witha racist banks, the issue has to do with what is going on right now in that sector.
Though am not a banker but I still maintain my position that there are other ways the CBN governor should have handled this issue without creating all these alarms in the sector, anyways am jst talking from my own lil managerial experience.

Am one those who doesnt believe on facts but in reality, I will check on these 3 you mentioned above first thing tml morning and see wht their response will be on transfering and recieving of LC from these Nigerian banks u mentioned,

3doorsdown:

@Deep Sight

Your own doesnt even make any sense, I tried soooo hard to no avail to make sense of your immature unsubstantiated ramblings. Methinks you're using substances that perhaps you should stay away from. Come back after your obvious hang-over lets see if you have something to discuss, but please stay off those substances cos "a mind is a terrible thing to waste".

Mr 3 Doors -

Unnecessary insults are hardly a becoming response to an issue you do not understand.

Let me School you a little.

I happen to be a legal practitioner.

There are two cardinal aspects of this mess that the CBN Governor got disastrously wrong. You see, when laws, regulations and procedures are laid down, the purpose is to avert anarchy. If we continue to act with disregard for regulations, we will continue to be a disjointed and directionless society. That forms the plank for the emergence of a failed state.

The two critical bits that Sanusi got wrong: Regulatory Discretion & Procedure and Approprition of Public Funds.

If you are familiar with the Fundamentals of Regulatory Oversight in any industry, you will be aware that the cardinal function of the Regulator is to guarantee a healthy industry and in so doing, the Regulator has various tools of intervention. The tools are to be excercised progressively in such a manner that correction of anomalies is effected with minimal disruption to the system. The ultimate sanctions are only reserved for irreversible situations and even at that ONLY after the application of intermediary measures which have failed.

Sanusi did not apply any intermediary measures whatsoever before wielding the big stick and he failed to note the likely ripple effects of loss of local and international confidence and run on deposits that attend such public shows of regulatory might.

It is therefore clear that as a Regulator he acted hastily, and without discretion, which is scandalous considering that this is a post he has held for less than two months. Clear measures availed him in taking gradual steps to correct the anomalies.

Furthermore a Regulator must be impartial - and in this he has manifestly failed by implicitly giving the other banks more time to tidy up their books while dragging the first lot into the mud.

The Second major point is Appropriation of Public funds.

Under the Constitution of Nigeria ALL FUNDS - HOWEVER SOURCED, PRODUCED OR DERIVED, accrue FIRST, AND AUTOMATICALLY TO THE CONSOLIDATED FEDERATION ACCOUNT, AND NO FUNDS MAY BE WITHDRWAN THEREFROM WITHOUT APPROPRIATION FOR SUCH PURPOSE BY THE PARLIAMENT (NATIONAL ASSEMBLY).

Accordingly, once monies are printed (which is at all events a questionable approach to creating wealth) such monies accrue first to the Federation Account and must be appropriated before being touched at all.

Sanusi made two infantile arguments in his attempt to evade this. He stated that it was not an expenditure but a loan. This is irrelevant because the Constitution does not make a distinction. It states that ALL monies must be appropriated before being withdrawn. Thus it does not matter what you are withdrawing the money for: it must be appropriated before being withdrawn. Secondly he stated that the money was not from the Federation Account. What a laugh - the law states that ALL monies should go to that account!

His action sets a very dangerous precedent: In future the CBN Governor may print trillions of naira and disburse as he pleases since in his argument, its a loan. So perhaps he can print 100 trillion naira and give out as loans without the proper process of legislative approval? Also, if the other banks he is still auditing are found to need help, what will he do? Go back to his back yard and print more billions?

Aside from the illegality pointed out above, as an economist he should be aware that such reckless printing of monies is a key cause of inflationary trends within the economy.

Recall that both the US and UK effected similar bail-outs last year at the height of the recession. It may interest you to know that in both societies the actions were carried out by the Central Banks through Acts of Parliament.

So you see, my dear brother - we cannot carry on with our scattered, gra-gra approach to doing things just any how in this country.

I hope you get it now. In future i strongly advise that you address issues instead of spewing needless insults cos i dare say we are not on this forum for yabbis, but to communicate and learn.

@Deep Sight
First, my ealier post in response to you was a veiled sarcasm at worst, and not an intended insult. I responded to the nuance of your post stated below;

Deep Sight:

Nigerians are so silly. We hail anything that appears "action" oriented. James Bond?

Sanusi's actions were not only rash and stupid, but they will also have disastrous effects on the banking industry.

As a Regulator, he is doing great harm to the Nigerian Banking Sector, and has shown shocking immaturity and ignorance.

The 420 Billion Cop-Out is the most blatant illegality in the history of Banking in Nigeria. Printing money and then injecting such public funds into private enterprises, without a legislative imprimatur.

You called Nigerians "Silly", you called Sanusi's actions "rash and stupid" without an explanation as to why. You called Sanusi, the CBN governor "immature and ignorant", this is a man who's well educated, was the md of first bank, appointed the CBN governor and confirmed by the Senate. You acused him of "the most blatant Illegality in the history of banking in Nigeria". Your comments were not substantiated and they are most outlandish, to say the least. It baffles me more now that you said that you are a LAWYER.
I agree with you that we are here to learn what we don't know and impart what we do know. In the spirit of that, rather than use my own words and ideas/beliefs to convince you of anything, let me refer you to facts, figures and references to the LAW of our land.
And by the way, Congratulations on your LAW degree.

http://allafrica.com/stories/200909030081.html

http://www.huhuonline.com/index.php?option=com_content&view=article&id=316:sanusi-lamido-sanusi-appears-before-house-of-reps&catid=103:more-news&Itemid=333

NB
You made some references to the Nigerian Constitution, but there was no proper citation of the relevant sections, I take that as an oversight on your part because LAWYERS dont usually make that mistake.

You made reference to US and UK doing 'the same bailout'. While I'll not delve into the details of those bailouts, I'll point out to you that US and UK banks were operating withing their enabling act. In cases where people were goaded into mortgages illegally, those brokers were arrested by FBI. Whereas in Naija, the bank mds were flouting their enabling act - approving loan amounts on their own beyond N1b and without due process. Cecilia ibru gave N13b on her own to a GIFT SHOP run by her former NANNY. They were actually CREATING non-existent assets in their balance sheets. If you tried any of these in US you'll spend a long time in Jail. Let me stop here for now until I get your reaction.

Mr. 3 Doors - No need to congratulate me, that degree was obtained more than a decade ago.

I have read the stories in the links you provided. Please do take the time to study again my earlier post. But in fairness to you, i must state that i missed out one important point.

I see all the references to the Banks and Other Financial Institutions Act and the CBN Act made by Sanusi and i am not impressed by those references at all. The reasons are very simple:

1. Under the Nigerian Judicial System, the Constitution is the Supreme Law of the Land, and where any other law is inconsistent with the Constitution, then it becomes void to the extent of its inconsistency. In this instance though, i do not really see a contradiction in the laws, but we need to be aware that constitutional provisions come first.

2. The laws he referred to actually empower him to give loans as a lender or last resort. However there are many laws that give powers to government officials to expend monies - that does not mean that those monies need not be appropriated first! His powers are to be excercised after appropriation by the Parliament, not before. I pointed out to you that this is a scary precedent, because whereas our National Budget is about N3 Trillion, Sanusi has already printed and disbursed a sum that is almost 20% of that! And he is set to do more. Where will the madness end? We need to interprete the laws more circumspectly.

I also failed to mention to you that there is actually within the law provision for a "Contingency Fund" which can be used to deal with situations like this with the approval of the National Assembly. Sanusi did not toe that path.

The unilateral printing and disbursement of public funds to private enterprises is a very very dangerous precedent.

Regarding the insults, that which is immature is immature, and i make bold to repeat that regarding Sanusi. My problem with you was the suggestion that i was high on some narcotic on account of my reverse perception of his actions. Haba now?

High on narcotic funny . . .not

Deep Sight:

Mr. 3 Doors - No need to congratulate me, that degree was obtained more than a decade ago.

I have read the stories in the links you provided. Please do take the time to study again my earlier post. But in fairness to you, i must state that i missed out one important point.

I see all the references to the Banks and Other Financial Institutions Act and the CBN Act made by Sanusi and i am not impressed by those references at all. The reasons are very simple:

1. Under the Nigerian Judicial System, the Constitution is the Supreme Law of the Land, and where any other law is inconsistent with the Constitution, then it becomes void to the extent of its inconsistency. In this instance though, i do not really see a contradiction in the laws, but we need to be aware that constitutional provisions come first.

2. The laws he referred to actually empower him to give loans as a lender or last resort. However there are many laws that give powers to government officials to expend monies - that does not mean that those monies need not be appropriated first! His powers are to be excercised after appropriation by the Parliament, not before. I pointed out to you that this is a scary precedent, because whereas our National Budget is about N3 Trillion, Sanusi has already printed and disbursed a sum that is almost 20% of that! And he is set to do more. Where will the madness end? We need to interprete the laws more circumspectly.

I also failed to mention to you that there is actually within the law provision for a "Contingency Fund" which can be used to deal with situations like this with the approval of the National Assembly. Sanusi did not toe that path.

The unilateral printing and disbursement of public funds to private enterprises is a very very dangerous precedent.

Regarding the insults, that which is immature is immature, and i make bold to repeat that regarding Sanusi. My problem with you was the suggestion that i was high on some narcotic on account of my reverse perception of his actions. Haba now?

I'm sorry I was not patient enough to read your story but incase you do not know Soludo printed money too but didn't announce it. he printed the money he used to start AFC and he's been injecting money into Oceanic and Intercontinental since last year. You said you are a lwayer yet claim that Sanusi's actions were an illegality, the same thing the Stupid Ozombachi of house of reps argued blindly and his friends had to excuse the media so they can save him from his ignorance. I'm an Engineer but my lecturer told melong ago that if you have any dispute, do everything possible to settle it before you call the lawyers 'cos they won't help you.
Which constitution have you been reading from? You read the same thing and turn it around and you guys end up spending donkey years in court arguing over what is pretty obvious.

And what is obvious to you is that the Governor of the CBN can print any amount of money (even trillions) and give it out in long term loans without the legislative imprimatur? ? ? Well. . . just stick to engineering then!

Go see how its done in developed countries - this thing aint no joke and needs public and proper appropriation.

Engineer. . . hmmm no wonder had no patience to read my post properly. Do your self a favour and try to spare a few seconds to read the points i raised and give me arguments against those points.

I used to evaluate several countries as potential investment destinations and one important tool in my armory was a subscription to a risk intelligence service such as EIU (The Economist Intelligence Unit). Unfortunately, I have let my subscription lapse but you can be sure all the foreign investors, financial institutions and potential counterparties will be fully subscribed and ready to "drop it like it's hot" if you know what I mean.

You can find the current (free to view) summary for Nigeria on

http://viewswire.eiu.com/index.asp?layout=RKcountryVW3&country_id=1650000165

Let us watch this page and any ongoing revisions.

By themselves, the very low ratings do not matter as the type of investor interested in Nigeria would have taken them into consideration. But when the trend starts getting worse, and the accompanying headlines strike a chord, you need to be very worried. Personally, if I read that the Chief Regulator can unilaterally dump an amount of money representing a significant percentage of the countries income onto the local market without any check and balance, I will "drop it like it's hot".

A lot of people here are getting abusive and making personal attacks on people pointing out that these actions could have severely negative consequences for the country in the short run. Consequences already being experienced by many people at the coalface of international finance.

If the majority do not wish these people to share their experiences with you, because perhaps it jars with deeply held beliefs and prejudices, why not make this forum a closed shop and we will respectfully gravitate elsewhere? After all, most of us only come here because we love our country.

JNdupu,

first of all I gi you credit for ya writing skills and your write-up encourage me to respond because i tink say you write with honesty unlike many here. nobody fit accuse you of tribalism or some sort of bias at all at all.

as i see for de site wey you post, e be like say de EIU get better intelligence as na failing grade dem give us in almost every category. e no dey possible make the grades get worse in my judgement, but time will tell. you see, na well known secret say those 5 banks dey for trouble and dat secret don dey for ground since last year.

some of de obvious signs of trouble with these banks be say, all of dem no get money to take process depositors' request for depositors' own money. because of dat, Soludo give dem opportunity to continuously borrow money from CBN so dat dem go straighten up their mess without going bankrupt. EIU and de rest of de banking industry for naija know say na de ting wey dey happen be dat, so i no surprise say na bad grades we get.

additionally, another open secret be say, those banks been dey cook their books to hide their illiquidity. last year my friend deposit N10million for Union bank, na bank draft o. when him go check him balance after 4 days, dem tell am say because of computer trouble, e go reach 3 more days before de deposit go post. it turned out say CBN no loan dem enough money during dat period. other banks including Oceanic use de same lie as cover up.

now, Soludo give these banks the opportunity wey dem need to get their finances in order through the said loan, e don pass 1 year since de banks dey do business with CBN loans, don't you think its about damn time to put an end to it? Sanusi and cbn stop dem from receiving loans from CBN because dat no be de way to run any bank. de result be say, all five banks for go bankrupt, period. dem no get funding to operate.

i no blame Sanusi say him give dem N420billion to prevent de impending bankruptcy. as of today, no court rule say Sanusi actions dey illegal. i tink time go reveal de real impact of the irresponsibility of the banks' CEOs.

una dey here dey blame CBN for preventing bankruptcy and pumping N420billion inside the banks. una forget say those CEOs don lose or (steal) over N1.6trillion.

my question for you be say, na for how long sanusi for let dem to continue to operate their banks with loans and without the capitalization wey CBN required? dem do am already for 1 year, e for better if Sanusi give dem another year or 2? how you for take handle de situation if you be Sanusi? i dey wait for ya answer. i no like to dey write long text, you sabi say na oyinbo spell checker dem get for here, de ting no understand pidgin, so forgive me in advance.

I think it makes a lot of sense to ask for the alternative(s) measure that has been put in place for this policy by the Apex Bank as represented by Sanusi to help our big time businessmen and companies as well. So, what other policy has been established or about to be enforced in favor of smooth operation of businesses here? Me for one thing, I don't think this step deserved any kudos at all as some offered their thanks to Sanusi. Much doubt if that's prudent enough for a frugal economy.




ogidiolu

All I have to say is that those people at the helm of affairs in this country
are playing with the lives of Nigerians just like some people did in Ghana
but are no where to find under the sun as I'm typing this reply.

Time will always tell!

ndu_chucks:

JNdupu,

first of all I gi you credit for ya writing skills and your write-up encourage me to respond because i tink say you write with honesty unlike many here. nobody fit accuse you of tribalism or some sort of bias at all at all.

as i see for de site wey you post, e be like say de EIU get better intelligence as na failing grade dem give us in almost every category. e no dey possible make the grades get worse in my judgement, but time will tell. you see, na well known secret say those 5 banks dey for trouble and dat secret don dey for ground since last year.

I thought we have been through these already. You just can't waste any opportunity to impress another ignorant person? What's your motive, really? To inform or to confuse? Please don't talk about your judgement as if it's unbiased.

some of de obvious signs of trouble with these banks be say, all of dem no get money to take process depositors' request for depositors' own money. because of dat, Soludo give dem opportunity to continuously borrow money from CBN so dat dem go straighten up their mess without going bankrupt. EIU and de rest of de banking industry for naija know say na de ting wey dey happen be dat, so i no surprise say na bad grades we get.

One of Sanusi's childish aims was to rubbish his predecessor, the same way Modibo rubbish El-Rufai, and Waziri rubbished Ribadu. Unfortunately for him, he didn't have the intellectual and administrative prowess to acccomplish his short term goal. In civilized countries, there would be some degree of continuity, no, in Nigeria every mediocre officer wants to outshine, outdo their predecessors for cheap political points.

additionally, another open secret be say, those banks been dey cook their books to hide their illiquidity. last year my friend deposit N10million for Union bank, na bank draft o. when him go check him balance after 4 days, dem tell am say because of computer trouble, e go reach 3 more days before de deposit go post. it turned out say CBN no loan dem enough money during dat period. other banks including Oceanic use de same lie as cover up.

We've talked about your 'cooking' books allegation, wait now until it proven. The example you just gave is rampant with banks. Computer failure happens even here with my Wachovia account. It's not like it took 3 months before the guy saw his correct balance. Come on, is that how you make all these false allegations?

now, Soludo give these banks the opportunity wey dem need to get their finances in order through the said loan, e don pass 1 year since de banks dey do business with CBN loans, don't you think its about damn time to put an end to it? Sanusi and cbn stop dem from receiving loans from CBN because dat no be de way to run any bank. de result be say, all five banks for go bankrupt, period. dem no get funding to operate.

i no blame Sanusi say him give dem N420billion to prevent de impending bankruptcy. as of today, no court rule say Sanusi actions dey illegal. i tink time go reveal de real impact of the irresponsibility of the banks' CEOs.

una dey here dey blame CBN for preventing bankruptcy and pumping N420billion inside the banks. una forget say those CEOs don lose or (steal) over N1.6trillion.

The only benefit I see with your persistence that the CEOs stole money is probably because you want to divert attention from the people who really stole money in the first place, otherwise I don't know why you keep repeating and retorting that they stole money, and that Sanusi was a messiah sent to rescue the banks from collapse. You just have to wait for the trials, and the facts to come to the open. Why can't you wait?

my question for you be say, na for how long sanusi for let dem to continue to operate their banks with loans and without the capitalization wey CBN required? dem do am already for 1 year, e for better if Sanusi give dem another year or 2? how you for take handle de situation if you be Sanusi? i dey wait for ya answer. i no like to dey write long text, you sabi say na oyinbo spell checker dem get for here, de ting no understand pidgin, so forgive me in advance.

Your question is after the fact, but there's basic banking manuals about advances/risk management, consolidation, foreign exchanges, and accounting that needs to be followed without injecting politics or religion into it. It's even questionable that the banks were about to collapse in the first place, so the question of how long to wait before jumping in to take over the banks is not applicable until we agree that yes, the banks were about to collapse.

Now the audit reports of the remaining eleven banks are ready, but following his bad experience with releasing the premature reports of the first 5, Sanusi is said to be worried about releasing the new reports of the remaining 11 banks. Just think about it.

naijaking1, i don tell you, time and again, say de issue of whether sanusi, or de bankers break law dey yet unresolved  by any court. therefore, i presume say de CEOs and sanusi no dey guilty of any crime yet! if any court find say dem dey guilty, i hope say you go dey OK with make dem rot for jail. i suspect say judge way set bail for N1.8billion don see small evidence of guilt, again time will tell.

leaving de issue of criminality aside, make i ask you some questions:

[list]
[li]nigerian banks supposed to dey concerned with Due Diligence as dem give out loans?[/li]
[li]you tink say these 5 banks supposed to take collateral for de loans?[/li]
[li]shey conflicts of interest (cronysim) now be de modus operandi of the banks for naija (remember say cecilia maid sef get N14billion loan)[/li]
[li]e good make banking loans be repaid or payment regime honored?[/li]
[/list]

as you answer de questions, make you try use ya judgement, to see whether those 5 banks and their fired CEOs and other executive served shareholders well.  if you fit admit, for once, say those CEOs, at de very least, drop de ball ( criminal activities aside), i go know say you dey honest in ya analysis.

They dropped the ball alright. But so did Sanusi - As MD of First Bank he gave non performing loans totalling N70 Billion. But that's being hushed up.

Clearly, to be fair, he should be held by the EFCC as well.

Deep Sight:

They dropped the ball alright. But so did Sanusi - As MD of First Bank he gave non performing loans totalling N70 Billion. But that's being hushed up.

Clearly, to be fair, he should be held by the EFCC as well.

deep sight, na gwode, at least one person here don admit say these CEOs dropped de ball. ma grouse with naijaking1 be say, him no gree make de honest admission wey you make.

as far as i dey concerned, make dem probe sanusi as well, if dem find am guilty of any crime, make him sef go jail. shikena. Deep Sight, you know say de 5 banks no dispute the talk say, na CBN loan dem dey take handle their banking day to day funding?  i wonder whether dem for go bankrupt without de money wey CBN give them. as for whether CBN get authority to gi  dem money, courtgo decide soon enough.

ndu_chucks:

naijaking1, i don tell you, time and again, say de issue of whether sanusi, or de bankers break law dey yet unresolved  by any court. therefore, i presume say de CEOs and sanusi no dey guilty of any crime yet! if any court find say dem dey guilty, i hope say you go dey OK with make dem rot for jail. i suspect say judge way set bail for N1.8billion don see small evidence of guilt, again time will tell.

If you presume them not guilty now, why do you say they "stole", instead of allegedly stole. You underestimate the importance of regarding people as innocent until proven guilty.

leaving de issue of criminality aside, make i ask you some questions:

[list]
[li]nigerian banks supposed to dey concerned with Due Diligence as dem give out loans?[/li]
[li]you tink say these 5 banks supposed to take collateral for de loans?[/li]
[li]shey conflicts of interest (cronysim) now be de modus operandi of the banks for naija (remember say cecilia maid sef get N14billion loan)[/li]
[li]e good make banking loans be repaid or payment regime honored?[/li]
[/list]

Due dilligence is good administrative tool that should be practiced, that's not our bone of contention. How many times do we have to tell you that not all bank loans require collaterals. It's not a crime to give loans without collateralls
All these things you're saying about Ibru is still allegations, allegations, allegations. You never tire

as you answer de questions, make you try use ya judgement, to see whether those 5 banks and their fired CEOs and other executive served shareholders well.  if you fit admit, for once, say those CEOs, at de very least, drop de ball ( criminal activities aside), i go know say you dey honest in ya analysis.

There you go again with this judgement thing again, let's just wait for things to clear up a little bit, our individual judgements are not enough.

If you presume them not guilty now, why do you say they "stole", instead of allegedly stole. You underestimate the importance of regarding people as innocent until proven guilty

dat one na semantics. I put stole for parenthesis, you too dey picky


you no wan address issues without talking about criminality of these people ko?  if you no fit admit say the said bank officials dropped de ball, dem I don finish with you, for now. but i dey watch you closely.

Sanusi has already failed

Help me pls Nairalander.

Is there any Difference Between LETTER OF CREDIT(LC) and BANK COMFORT LETTER? There's an ongoing debate on this subject. I need your help. I will appreciate a quick response soonest.

Thanks.





ogidiolu

sunmatajai:

Help me pls Nairalander.

Is there any Difference Between LETTER OF CREDIT(LC) and BANK COMFORT LETTER? There's an ongoing debate on this subject. I need your help. I will appreciate a quick response soonest.

Thanks.

ogidiolu

i go try use example to take explain de 2 financial instruments:

LETTER OF CREDIT(LC)

letter of credit na for primarily for international trade. make we assume say you dey live for USA and you dey import motorcycles. if you need $200,000 for ya transaction, you fit go black market go buy dollar at N159, den you go use domiciliary account take transfer ya money $10,000 max per week. dat option no dey too business friendly. So you go go ya bank, complete Form-M and other documentation, den ya bank go get you de dollar for prevailing rate like N151.7. if you get long leg, ya bank fit gi you loan in de same amount sef ( make sure say de loan no end up as non performing loan o; you sabi say na de ting wey put big men for jail be dat). after dat, your bank go give you letter of credit. You go need to get bank account for de country wey you wan buy generator to make this work.

to cut tory short, you go carry ya letter of credit go ya foreign bank, and based on dat, your bank go pay the seller of de generators. de naija bank go reimburse ya foreign bank for de country where you dey buy de generator. one ting be say, letter of credit dey irrevokable. if you no know wettin I mean, google am.

BANK COMFORT LETTER

comfort letter too, na for primarily international business. make i use illustration here again:

putin incorporated LLC get refinery for Russia and dem dey offer to sell 1000MT/month of diesel for 12 months. you wey get oil importation business for naija, wan buy de oil, but before putin incorporated enter inside contract with you, dem tell you make you go bring bank letter of comfort. de letter go assure de seller say, bank don verify say you get de financial capacity to enter inside de agreement. sometimes sef, buyer fit require bank comfort letter from seller. all na to make sure say no be 419 una dey do. all parties go come pay each other as needed using either letter of credit or other financial instrument

na my 2 kwabo be dat, make we see wettin others go contribute

ndu_chucks:

i go try use example to take explain de 2 financial instruments:

LETTER OF CREDIT(LC)

letter of credit na for primarily for international trade. make we assume say you dey live for USA and you dey import motorcycles. if you need $200,000 for ya transaction, you fit go black market go buy dollar at N159, den you go use domiciliary account take transfer ya money $10,000 max per week. dat option no dey too business friendly. So you go go ya bank, complete Form-M and other documentation, den ya bank go get you de dollar for prevailing rate like N151.7. if you get long leg, ya bank fit gi you loan in de same amount sef ( make sure say de loan no end up as non performing loan o; you sabi say na de ting wey put big men for jail be dat). after dat, your bank go give you letter of credit. You go need to get bank account for de country wey you wan buy generator to make this work.

to cut tory short, you go carry ya letter of credit go ya foreign bank, and based on dat, your bank go pay the seller of de generators. de naija bank go reimburse ya foreign bank for de country where you dey buy de generator. one ting be say, letter of credit dey irrevokable. if you no know wettin I mean, google am.

BANK COMFORT LETTER

comfort letter too, na for primarily international business. make i use illustration here again:

putin incorporated LLC get refinery for Russia and dem dey offer to sell 1000MT/month of diesel for 12 months. you wey get oil importation business for naija, wan buy de oil, but before putin incorporated enter inside contract with you, dem tell you make you go bring bank letter of comfort. de letter go assure de seller say, bank don verify say you get de financial capacity to enter inside de agreement. sometimes sef, buyer fit require bank comfort letter from seller. all na to make sure say no be 419 una dey do. all parties go come pay each other as needed using either letter of credit or other financial instrument

na my 2 kwabo be dat, make we see wettin others go contribute

English would have been much easier to understand.
Pidgin is not an appropriate language for expressing technical concepts.

Seun:

English would have been much easier to understand.
Pidgin is not an appropriate language for expressing technical concepts.

Ok, no vex. I go try rewrite am.

I will try to use 2 simplistic examples for illustration:

LETTER OF CREDIT(LC)

Letters of credit are primarily used in international trade. Lets assume that you import Motorcycles from the USA. If you need say $200,000 for one of your purchases or transactions, you could go to the parallel market (black market) and purchase dollars at the rate of N159/$, and then remit the funds to an overseas account, through your domiciliary account at a Nigerian bank. There is a $10,000/week wire transfer limit which most businessmen find cumbersome.  Alternatively,  you go to your bank and complete Form-M and other required documents and the bank will sell you the $200,000 and a rate very close to the prevailing CBN rate (N151.7). If you are well connected, the bank could even get you the funds through a loan facility (make sure that the loan does not become non-performing    ). Your bank will then issue a letter of credit to you in the amount of $200,000 which you would tender to your foreign bankers.  Your foreign bankers will then pay your seller, the said amount and your Nigerian bank will reimburse them (your foreign bank) promptly. 

The letter of credit is irrevocable, hence the issuing bank must pay up.


BANK COMFORT LETTER

In this illustration, Putin Incorporated LLC has a refinery in Russia and they are offering to sell 1000MT/month of diesel to willing buyers.  Now, a Nigerian Diesel importer may show an interest  to enter into a contract with Putin LLC for the purchase of the offered diesel for the duration of, say, 12 months. Putin could require you, the Nigerian importer,  to provide a bank comfort letter before they enter into an agreement with you. The comfort letter issued by your bank is used to offer "comfort" to Putin LLC  as to the your  ability or willingness to perform your obligations. Note that the comfort letter is not a payment mechanism, per se, like the letter of credit.


Just my 2 kobo

Good explanation. Anyone asking for comfort letters is probably just looking for evidence of a banking relationship They are inherently useless for credit assessment purposes because the banks' legal departments would have inserted some form of disclaimer language.

ndu_chucks:

Ok, no vex. I go try rewrite am.


BANK COMFORT LETTER

In this illustration, Putin Incorporated LLC has a refinery in Russia and they are offering to sell 1000MT/month of diesel to willing buyers.  Now, a Nigerian Diesel importer may show an interest  to enter into a contract with Putin LLC for the purchase of the offered diesel for the duration of, say, 12 months. Putin could require you, the Nigerian importer,  to provide a bank comfort letter before they enter into an agreement with you. The comfort letter issued by your bank is used to offer "comfort" to Putin LLC  as to the your  ability or willingness to perform your obligations. Note that the comfort letter is not a payment mechanism, per se, like the letter of credit.

@Ndu_Chucks,

Good question.

I have always beleived that sanitizing the banks could be a good thing in the medium to long run so, unlike some, I do not question his motives (tribalism? gimme a break,  jealousy? Soludo supports a different premiership team? - actually I made that last one up).  The timing and public palaver may be wrong though.

I would probably have sacked the CEOs, but only after due process and adequate respect for all legal processes.  The initial assumption should be that they commited civil offences (ie, incompetence) in the process of giving out the loans and it is a long burden-of-proof leap between that and criminality (ie, fraud).  What I'm saying is that this current spectacle with the EFCC was avoidable and unfortunate because it adds to the general perception of risk.

There are a few questions I have yet to see answered properly in the public domain. We are being drip-fed stories.  Again, I do not question Sanusi's motives but I question his tactics. 

For instance, I still do not know:

- the independence and competence of the "Auditors"

- the arrived-at definition (which, in my observation, appears different from the common definition) of "non-performing" loans

- when loans are non-perfoming, the credit agrements stipulate processes of remedying the default and these do not usually include immediate handing over to EFCC mosquitos.  Again, have the CEOs initiated those processes and, if not, was it because of incompetence (maybe a civil offence) or fraud (criminality)? For instance, I have since read that the portion of the loans relating to margin loans to stockbrokers were already covered under a recent restructuring agreement indicating to me that the CEOs were actively working to mitigate the losses.

- I am sceptical about the importance attached to the publicized lack of collateral.  In the margin loans for stock purchases, the collateral was the stockholding and, possibly, other assets in the broker's portfolio.  Maybe the current gap between the current valuations and the loans has been allowed to widen beyond what is expected in a well managed system, so the brokers must share responsibility for this.  More importantly, the value of those collateralized stock is not zero and the loan exposure being reported is overstated - adding to the perception of risk.  Similarly, loans given for the Oil & Gas contracts are collaterized by the assets and any receivable under the supply contracts.  It is yet to be proven that the CEOs were not taking considered risks in the management of their loans.

So, after all the above, yes, is is established there are some bad loans in the tru sense of the word and the post-audit amounts are quantified and verified.  I would then, as CBN offer to adopt these loans into a separate vehicle that can be managed directly and make up the balance sheet of the banks in equivalent amounts.  Where recapitalization is necessary, take equity positions in the banks and at a latter stage offer them to private (foreign) strategic partners. It would have been possible to achieve an orderly transition of the banks into much better shape in a short period of time.

Of course, if it has come down to this, the CEOs will be  quietly removed on the basis of incompetence and contine to investigate over the next few months whether any fraud has been commited.  No need for all the furore.


Sorry for dogo turenchi, my brother.

ndu_chucks:

JNdupu,


my question for you be say, na for how long sanusi for let dem to continue to operate their banks with loans and without the capitalization wey CBN required? dem do am already for 1 year, e for better if Sanusi give dem another year or 2? how you for take handle de situation if you be Sanusi? i dey wait for ya answer. i no like to dey write long text, you sabi say na oyinbo spell checker dem get for here, de ting no understand pidgin, so forgive me in advance.

JNdupu,

first of all, make i express my sincere appreciation for ya intellectual honesty, ya analysis na de kind wey i dey expect from concerned Nigerians and others. you, my friend, are one detribalized analyst.

i dey in agreement with just about every ting wey you write, in fact i don express de view many times say, sanusi exhibit some rascality in de way him handle de whole ting. i just hope say de long term effect of de actions go dey positive - i reserve my conclusions on that until sometime next year.

make i try look at some points wey you raise from the eyes of Sanusi and attempt to make sense of recent cbn actions.  na merely "academic" exercise, e no mean say i support de man tactics:

I would probably have sacked the CEOs, but only after due process and adequate respect for all legal processes.  The initial assumption should be that they commited civil offences (ie, incompetence) in the process of giving out the loans and it is a long burden-of-proof leap between that and criminality (ie, fraud).  What I'm saying is that this current spectacle with the EFCC was avoidable and unfortunate because it adds to the general perception of risk.

 

me sef no support the current efcc spectacle. i suspect say Sanusi and CBN believe say, given de evidence of apparent financial crimes wey dem collect from de banks, if dem no remove de bankers with immediate effect,  all de evidence go disappear before any future court date. you sabi say, de criminal elite for naija fit even burn down 10 storey buildings to hide their crimes.

if de evidence wey cbn uncover no dey overwhelming, why de judge go give the accused CEOs N1.8billion bail? dat money too much unless de bail fit de allegations.  Sanusi say na because of the Nigerian factor wey him move so quickly to remove de CEOs.  make we also remember say CBN and EFCC no be de same organization.

when loans are non-perfoming, the credit agrements stipulate processes of remedying the default and these do not usually include immediate handing over to EFCC mosquitos.  Again, have the CEOs initiated those processes and, if not, was it because of incompetence (maybe a civil offence) or fraud (criminality)? For instance, I have since read that the portion of the loans relating to margin loans to stockbrokers were already covered under a recent restructuring agreement indicating to me that the CEOs were actively working to mitigate the losses.

na true, some stockbrokers get restructuring agreements with de banks and Sanusi tell us 2 day ago say de banks go honour de agreements. As far as de other non-performing loans, remember say de banks been advertize for inside nigerian newspapers say dem need help from government to take recover trillions of naira worth of bad loans.  if bank take full page advertisement announce to de world say dem get bad loans like dat, I submit to you say, de banks don already damage themselves, because potential investors don already see say trouble dey.

as soon as cbn tell de banks say dem no fit use cbn loans wey dem been dey use for day to day operations again; these banks put full page Ad for paper say dem need help. I believe say, if Sanusi no take action to inject money inside de banks, dem for go belly up - den dem go blame cbn because cbn no help dem after dem tell de whole world about their loan problems.  for goodness sake, no be de epitome of incompetence be dat? you give loans worth trillions of naira, you no do every ting to collect, you come dey cry for newspaper say debtors no pay you back!

na after de advertisements Sanusi see say, him must step in immediately. many of de debtors no even try to restructure de loans, you sabi say these people are larger than live - who go go arrest dem na?  na only after efcc give dem 48 hours to pay up when CBN recover almost N70billion out of de blue.  unfortunately, na de kind "due process" wey necessary for naija atimes, be dat.

I do not question his motives (tribalism? gimme a break, jealousy? Soludo supports a different premiership team? - actually I made that last one up).

i suspect say sanusi dey support Man City while Soludo na Arsenal fan. you sabi say both sanusi and Man City share one trait - i. e. dem both be "new kids on the block", while Arsenal na

once again, i like ya analysis, nothing do you.