CBN threatens to sack more bank MDs

LAGOS—THE Central Bank of Nigeria, CBN, has threatened to remove managing directors of banks found to have allowed their predecessors and some key shareholders to meddle with the day to day running of such banks. The action, CBN says, runs counter to the corporate governance reform it was currently pursuing. The apex bank which said it had received information that some managing directors of banks were taking directives from former managing directors and key shareholders, said that chief executive officers of banks and board members found wanting will be replaced with those it considered to be  fit and proper. The threat which is contained in a circular dated Tuesday, November 30, with reference GVS/DGF/CON/BSV/05/109 and signed by CBN’s Deputy Governor, Dr. Kingsley Moghalu, to chairmen, managing directors and board members of all banks said: “The Central Bank of Nigeria has received reliable information regarding the involvement of former managing directors of deposit money banks and key shareholders who are not directors, in the management of banks.  “This includes cases of senior management staff by-passing established governance structures and reporting to non-bank officials. The CBN would like to draw the attention of all chief executive officers and boards of directors of banks that their ability to protect the integrity of established governance structures is a key element in our on-going assessment of fit and proper status. “Board members and chief executive officers who are unable to assume full responsibility for their institutions assume the risk of not retaining this status. The corporate governance and other reforms of the banking sector have been instituted to ensure the sustainable growth of the sector and best-practice standards therein for the benefit of all stakeholders and the economy.

liaslo***:

The corruption started from the top i.e the CBN governor, they have to remove those at the top;

Yoruba says: Ti igi ba wo lu igi, ti oke ni amaa koko yoo.





no Harm

jamesugo:

that can't still curb the corruption among among bank MDs

damola1:

Rubbish talk. There's no way, they expect a man to have built a company from the scratch and just move on, It's not done.

What the silly CBN should watch is simply that they get the job done, all this stories about former MD are just a waste of time, Has OBASANJO really left the seat of power?,

paradigman:

Thank God, they now know. Some of the directors/current MD's are stooge. I know of one who routed all the bank's financial platforms/applications (CABAL) and databases to his house through a telecoms services provider and he give authorisation/instructions from his bedroom. The chickenhead still controls the bank.

Kcswat22:

Sanusi is a useless man dat does not knw his work.he is tryin to sack more southern MD.look @ unity bank d only bank own by d north dat cant even convince a customer to bank with it, he says its d best bank in nigeria. Shame on him.

Musiwa,:

You people are funny in nigeria, how can you sack an MD of private company that is not own by the nigeria govt. you make me laugh. it most be a joke.

Hamid O:

Before I start questioning you, I think you should checkout the meaning of "PLC" that follows the name of most organizations including banks. Probably you'll know who's joking then.

sleekman:

Sanusi has the power to sack any bank MD period.

manny4life:

Oh wow, that's weird, never that Ben Bernake could sack Bank of America CEO

Musiwa,:

You people are funny in nigeria, how can you sack an MD of private company that is not own by the nigeria govt. you make me laugh. it most be a joke.

Musiwa,:

You people are funny in nigeria, how can you sack an MD of private company that is not own by the nigeria govt. you make me laugh. it most be a joke.

orgasm:

You must not comment on every post so you dnt display your ignorance like goods in the open market. Aquaint urself with the roles and functions of the central bank and study BOFIA and CAMA as embedded in the constitution and stop laughing at ursef.where are u btw? Dnt u go to school there or there are no schools? Get ursef some education and this is not a joke!

manny4life:

Tell me whats the difference between Nigerias CBN and U.S. Federal Reserve? In a capitalist economy, a democratic one at that, how come such so-called laws exist in the Nigerian constitution as well as CBN act; that powers are given to the CBN governor to make such a decision? Remove a Bank executive because of non performance or whatever the case might be? There lies your problems right there.
1. Banks are private entities, single but obviously owned and controlled by shareholders (individuals or other entities) whom by power elect the Board of Directors for the bank. Private entities ARE NOT and I repeat, ARE NOT controlled by neither the government nor its entities, however; the government does have regulatory powers over private entities.
2. When private entities such as banks have government interference, its no rocket science, banks would often not operate in full scope of flexibility for the fear that an action taken by the banks directors might be viewed wrongful by the Apex bank which will in turn cause retaliation.

Let the CBN allow the banks play its role in the economic system, if they feel that something is wrong, what they do is launch an internal investigation and review of bank policies, if they wish file complaints with the appropriate financial crime unit of the Nigerian Government. With their powers as well, they can stop all banking activities, issue directives as they wish or whatever actions they choose, but firing an executive appointed by the Board is an overstep of powers.

Boards of Directors as well as Bank Executives need to appeal to the Nigerian Houses to repeal such laws because it does not conform well to a civilized and democratic society and if they have to lobby the Nigerian political leaders, they should. If I were Bank Directors, file a suit challenging such laws; removal of an executive appointed by a board is NOT a regulatory decision.