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Bank Crisis: How Cbn Directive, Ceos' Scheming Propel Mass Sack by realmen: 11:06pm On Nov 29, 2009
Sunday, November 29, 2009

Bank Crisis: How CBN Directive, CEOs' Scheming Propel Mass Sack


Unions Tackle Sanusi
By Marcel Mbamalu

DESPITE Federal Government's directive to the Central Bank of Nigeria (CBN) to stem the wave of mass sack in banks, a contrary order by the apex bankÕs management is brewing trouble in most of the financial institutions.

As the last count, at least 1,000 workers within the rank of banking officers and above in two banks (one cleared as healthy and the other rescued) alone were either sacked or asked to resign in the last two weeks.

This figure excludes the thousands reportedly pencilled down for sack in the other 22 'healthy' and 'troubled' banks still grappling with economic crisis.

The Federal Government had reportedly asked the CBN Governor, Sanusi Lamido Sanusi, to intervene and put an end to arbitrary retrenchments in most of the banks, especially the eight ÔrescuedÕ ones.

But the apex bank, in an October 28 memo to the Managing Directors of the embattled banks, directed them to, among other things:

"Reduce executive and other staff emoluments by at least 30 per cent and submit an action plan for branch and staff rationalisation (reduction) in order to utilise some hidden economies of scale in the bank's operations."

This directive is said to have given impetus to new policies that pencilled down thousands of workers for retrenchment.

Industry sources have, however, expressed concerns that while governments all over the world work hard to encourage employment and are measured by the number of jobs created, the current reforms in the Nigerian banking industry encourage chief executives to sack workers with impunity.

The two workers' unions in the industry , the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) and the National Union of Banks, Insurance and Other Financial Institutions' Employees (NUBIFE) , are worried that their members are made to pay the price of the ongoing reforms in the sector.

General Secretary of NUBIFE, Ola Elijah Segun, described as unfortunate the reform process that could lead to mass sack in banks as unfortunate.

"That has been our predicament in the banking industry. Workers are usually at the receiving end of any reform. No matter the nature of any reform, at the end of the day, you will discover that the workers are the victims.

"When they recapitalised, we were at the receiving end; when they re-engineered, we were at the receiving end; they are now sanitising, and we are also at the receiving end, despite the fact that we are not privy to the perpetration of the so-called atrocity in the industry. So, it is very unfortunate that it is happening this way," Ola said.

Secretary General of ASSBIFI, Mr. Jarvis Erhemosele, has asked the CBN Governor to tread the path of caution in his management's action in the banks.

In the Central Bank circular, signed by one Thompson Sunday on behalf of the Director of Banking Supervision, the new CEOs were also instructed to submit plan of action for cost reduction and enhanced revenue generation for the next six months terminating in April 2010.

The directive was ostensibly making reference to situation reports presented to it by the newly appointed managers.

The apex bank, therefore, asked the CEOs to comply with the directive of the CBN in Special Examination Report by increasing the bank's total provision for loans and other known losses and publish the full results not later than October 31,2009.

The CBN also requested them to recognise any additional diminution in the bank's warehoused shares in its books latest by October 31, 2009.

Sources in some of the affected banks said that the directive to trim down staff strength and emoluments, coupled with the scheming by the new chief executives to do away with old staff and bring in new loyalists, has compounded the employment situation in the banks.

A source in one of the cleared banks, however, argued that it was not the duty of the CBN governor to direct banks on issues of employment and retrenchment.

The source, who is head, Corporate Communications at the bank, said that, as a regulator, the governor could only advise the banks on matters of employment, especially as the financial institutions are going concerns and should determine, by themselves, the best cost-effective means of doing their businesses.

"The CBN is a regulator and it will be wrong to expect the CBN Governor to determine the size of workforce for the banks. I wouldn't know for the rescued banks, but that does not obtain in a normal situation," he said.

He noted that the issue of cost of operations had been in the front burner even in the days of Professor Chukwuma Soludo as CBN governor.

The Guardian also gathered that as the Chairman of the Bankers Committee, Sanusi's maiden meeting with bank chiefs dwelt on issues of operational cost and tried to proffer solutions to duplication of costs for banks operating on the same streets, for instance.

The meeting, held shortly before the CBN August 14 sack of five bank chief executives , Okey Nwosu of Finbank, Barth Ebong of Union, Erastus Akingbola of Intercontinental, Cecelia Ibru of Oceanic, and Sebastine Adigwe of Afribank Ñ also explored the possibility a concentration of banks in an area sharing generators and bullion vans.

But insisting that the wave of retrenchment in the nationÕs banking sector has nothing to do with reducing cost but a mere ploy by the new chief executives to eliminate (by substitution) a handful of staff perceived as not being loyal to them and the new trends represented by their regimes, ASSBIFI scribe, Erhemosele, argued that, in most cases, the sacked workers are replaced with cheaper hands and cronies of the new chief executives.


http://www.ngrguardiannews.com/news/article03//indexn2_html?pdate=291109&ptitle=Bank Crisis: How CBN Directive, CEOs' Scheming Propel Mass Sack
Re: Bank Crisis: How Cbn Directive, Ceos' Scheming Propel Mass Sack by Ndeewonu: 12:24am On Nov 30, 2009
NA TODAY? NO SHAKEN!! NOTHING MEGA!!!

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