₦airaland Forum

No2Atheism:
  the last time i checked NDIC is not saying wat i just quoted 

so when a bank is liquidated, who does te NDIC settle with first?

Scenario/Evidence: Public declaration of intent to sell banks to foreign investors obviously without recourse to shareholders, cus the last time i checked, i have not seen a shareholder saying he or she seeks to sell the banks.

Hence its a unilateral and illegal decision of the CBN governor to sell private property.

Public declaration of intent to sell the banks by Sanusi is my evidence . . . if that is not enough, well then i rest my case, even as i look forward to your opinion of the same scenario of change of ownership being metted out to your property of similar characteristics since u believe its legal.

You have not provided evidence of said declaration of intent to sell banks? e.g. an article, an interview etc. I expect evidence were he states that he is going to sell the banks, not your interpretation to phrases like 'I prefer if they are sold'

You should not confuse morality with legality. While you and I may feel it is wrong, that does not make it illegal. If I had a bank, I would be fully aware of the legal frame work under which I am operating.
 
As to the illegality of selling the banks, from the BOFIA (where Bank is the CBN and bank is the target bank)

33. (1) Where a bank informs the Bank that:-
(a) it is likely to become unable to meet its obligations under this Decree; or
(b) it is about to become unable to meet its obligations under this decree; or
(c) it is insolvent; or
(d) where, after an examination under section 32 of this Decree or otherwise howsoever, the Bank is satisfied that the bank is in a grave situation as regards the matter referred to in section 32 (1) of this Decree,
the Governor may be order in writing exercise any one or more of the powers specified in subsection (2) of this section.
(2) The Governor may be order in writing under subsection (1) of this
section:
(a) prohibit the bank from extending any further credit facility for such period as may be set out in the order, and make the prohibition subject to such exceptions, and impose such conditions in  relation to the exceptions as may be set out in the order, and from time to time, by further other similarly made, extend the aforesaid period;
(b) require the bank to take any steps or any action or to do or not to do any act or thing whatsoever, in relation to the bank or its business or its directions or officers which the Bank may consider necessary and which is set out in the order, within such time as may be stipulated therein;
(c) remove for reasons to be recorded in writing with effect from such date as may be set out in the order, any manager or officer of the bank, notwithstanding anything in any written law or any limitations contained in the memorandum and articles of association of the bank;
(d) in respect of a bank, notwithstanding anything in any written law or any limitation contained in the memorandum and articles of association of the bank; maximum number of directors, for reasons to be recorded in writing:-
(i) remove from office, with effect from such date as may be set out in the order, any director of the bank; or
(ii) appoint any person or persons as a director or directors of the bank, and provide in the order for the person or persons so appointed to be paid by the bank such remuneration as may be set out in
the order;
(e) appoint any person to advise the bank in relation to the proper conduct of its business, and provide in the order for the person so appointed to be paid by the bank such remuneration as may be set out in the order.

34. If after taking such of the steps stipulated in section 33 of this Decree or such other measures as in the opinion of the Bank may be appropriate in the circumstance, the state of affairs of the bank concerned does not improve, the Bank may turn over the control and management of such bank to to the Nigeria Deposit Insurance Corporation (hereinafter in this Decree referred to as the Corporation) on such terms and conditions as the Bank may stipulate from time to time.

34A Where the Corporation has assumed control over a bank as provided under section 34 of this Decree and such bank is significantly under-capitalised to the extent that its risk weighted assets ratio is below 5 per cent but above 2 per cent, the Corporation may:-
(a) require the bank to submit a re-capitalisation plan acceptable to the Corporation within a stipulated period; or
(b) prohibit the bank from extending any further credit and incurring any additional capital expenditure without the approval of the Corporation; or
(c) notwithstanding the provisions of section 7 of this Decree, require the bank to take such steps or to do or not to do any act or thing whatsoever in relation to the business of the bank or its directors or officers, which the Corporation may consider necessary within such time as the Corporation may stipulate; or
(d) with the approval of the Bank remove, for reasons to be recorded in writing and with effect from any date as may be specified , any director, manager, officer or employee of the bank; or
(e) appoint with the approval of the Bank any person or persons as a director or directors of the bank and cause their remuneration to be provided by the bank.

35.
(1) Where the Corporation has assumed control of the business of a bank pursuant to section 34 of this Decree, the Corporation shall remain in control of and continue to carry on the business of the bank in the name and on behalf of the bank until such a time as in the opinion of the Bank, it is no longer necessary for the Corporation to remain in control of the business of the bank.
(2) Accordingly, the cost and expenses of the Corporation or remuneration of an appointed person of the bank shall be a first charge on the assets of the bank.

36.
(1) In the event that the bank over which the Corporation has assumed control cannot be rehabilitated, the Corporation may recommend to the Ba nk other resolution measures which may include the revocation of the bank’s licence.

37. Where the licence of a bank has been revoked pursuant to section 36 of this Decree, the Corporation shall apply to the Federal High Court for a winding up order of the affairs of the bank.

38A
(1) Notwithstanding any thing to the contrary contained in any law or enactment, no suit shall be instituted against a bank whose control has been assumed by the Corporation.
(2) If any such proceeding is instituted in any court or tribunal against the bank, it shall abate, cease or be discontinued without further assurance other than this Decree.

38B. The Corporation shall, while acting as the liquidator of the licenced bank forward to the bank copies of any returns which it is required to make, from time to time, by the Bank.

44.
(1) Every bank shall, before appointing any director or chief executive seek and obtain the Bank’s written approval for the proposed appointment.
(2) No person shall be appointed or shall remain a director, secretary or an officer of a bank who:-
(a) is of unsound mind or as a result of ill- health is incapable of carrying out his duties; or
(b) is declared bankrupt or suspends payments or compounds with his creditors including his bankers; or
(c) is convicted of any offence involving dishonesty or fraud; or
(d) is guilty of serious misconduct in relation to his duties; or
(e) in the case of a person possessed of professional qualification, is disqualified or suspected (otherwise than of his own request) from practicing his profession in Nigeria by the order of any competent authority made in respect of him personally.
3. No person who has been a director of or directly concerned in the management of a bank which has been wound up by the Federal High Court shall, without the express authority of the Governor, act or ;continue to act as a director of, or be directly concerned in the management of any other bank.

So it is fully within the powers of the CBN to change the management and ownership of a bank.

No2Atheism:
Abeg spare me the grammar

He has publicly voiced his desired to sell off the banks, which one is explicit moves again, abi na until them take the sale receipt slap nigerians for face. Is that wen we are supposed to react wen the ownership has already changed hands illegally. Or wait please  don't tell me u are suggesting the nigerian shareholders should wait until it has happened before making an effort to stop it, dooh 

so if I say I would like to be president, that makes it automatic that I am contesting the next elections? 
The only thing he has said categorically is that the banks need to be recapitalized, and that does not necessarily equate to new ownership. A bank can be recapitalized by existing shareholders introducing more funds

Personally i don't trust the nigerian evironment hence i don't have shares in any of the banks, nevertheless that does not mean that i should not speak out when there is something obviously illegal going on as concern the reported conspiracy to bring about a change of ownership of the banks.

By the way, Insolvency is not a loss of ownership so i do not know exactly what the heck you are on about. That the banks were mismanaged does not mean the shareholders have lost their ownership rights or please be more explicit or are you trying to tell me otherwise.

The bottomeline is this: CBN does not have the legal right to sell a private property.

Wrong. If you become insolvent, the CBN has the right to withdraw your banking license, and in cooperation with the NDIC liquidate your assets to address the depositors. Depositor are indirect shareholders in a bank and thus it is not entirely a private business in the sense you make of it. There are other peoples money involved beyond the share holders

Can you please openly tell me that Sanusi took his steps based on shareholders or based on mismanagement by CEO and Directors, what you are arguing and saying is completely different from what has been reported as the basis the current actions against the banks.

The actions were taken against the executives but the executives were appointed by the shareholders to protect the shareholders interests. The CBN is acting to primarily protect the interest of the depositors and the public. the shareholders are secondary. If the CBN hadn't injected the funds, the banks would have gone under and the shareholders would have been left with nothing

Your own statement is a completely different scenarion and the last time i checked that is not the scenarion being presented by Sanusi, hence the bottom line still remains that something illegal is being done by Sanusi and as regards the ownership of those mentioned banks.

So what is the scenario presented by Sanusi, and please provide supporting evidence.
What are the illegal actions he has taken,? and please provide evidence of its illegality.

and what is so prophetic about the Vanguard article?
-  That soludo will not get a second term, when no CBN governor has done so in recent times, and after his brushes with the president was almost certain to be replaced
- Anyone privy to the state of things in the EDW could easily deduce that these five banks were in trouble, as they were constantly borrowing from other banks, without paying it back since October 2008
- That the CBN would have to take action against them else the collapse the entire sector. Even Soludo would have acted against them if he was reappointed. He likely feigned ignorance so as not to hinders his chances of a second term as governor.
- Given the size of the banks involved (and the recent court rulings on Savannah issue) , that the CBN would have no choice but to inject funds into this bank.
- That the banks would have to be transitioned into a new management (and possibly ownership where needed) to recover the CBN funds and move the banks forward as a going concern
- Given the distribution of wealth in Nigeria, it is highly likely that some of the investor might come from the north (afterall they are like half of the country).

Yet some people simply ignore the failings of the prophecy like
- The top 5 banks are targeted, yet the banks affected are not the top 5 banks as claimed by the article
- The group were supposed to force the banks into liquidity problem by depositor withdrawing their money, yet said 5 banks are in trouble because the have been borrowing from other banks without repayment, lost money because they invested heavily in stocks and oil & Gas, and because they have huge amounts of loans that they have failed to collect on, but rather doctored their books. Their failure is their own handiwork, and not because of some text messages sent by some group
- The government was supposed to take equity in the banks, yet the CBN has not done so. The funds injected were tier 2, which is essentially like an insurance policy, and not tier 1 which could have been termed has buying equity in  the company.

Short of the coincident number 5, the rest is malleable for anyone gullible enough

Though that Nigerians cant reason on facts and figures is not surprising, else how would one explain the thriving throng of false prophets, fake pastors, and crooked imams.

No2Atheism:
@oyb

i am still waiting for the answer to this question:

How is it that the CBN governor seeks to sell banks that still have legal shareholders.

He has not made any explicit moves to sell the bank yet. The overall aim is to transition the bank to a new management team (which will replace the current interim board appointed by the CBN). If that would necessitate a change of ownership is yet to be  seen, but sanusi said that he was not averse to selling the banks, preferably to other financial institutions, (local or foreign), who can bring in not only funds, but also the processes to move things forward and make the banks better.

As things stand, the current level of liabilities of the 5 banks has eroded most of the shareholders funds, and made them insolvent. The CBN, through the interim management, is trying to recover for the banks as much of the bad loans as possible, so that
1. The CBN can recover the funds it provisioned to stabilize the banks. (please note that CBN has only injected tier 2 funds, and not tier 1 i.e. they have not bought shares in the company)
2. The shareholders can recover some of their equity in the bank.

If the recovery process goes well, and existing ownership was not complicit with the fraudulent executives that were sacked, then there would be no reason to change the ownership of the bank.
If on the other hand, existing ownership was same or complicit with fraudulent executives, then change of ownership would be required, as the banks cannot be returned into the hands of the corrupt individuals who acted fraudulently (by doctoring their books) and mismanaged depositors funds.

The stability and survival of the banks comes first (as that is needed to protect depositors). Ownership and new management issues will be addressed later.

dayokanu:
Biina,

What do you have to say about your scrappy defence and win today despite your mega million buys

The defence we fielded today is far from our best (missing two starters in Pepe and Ramos, and our 3rd choice CB in Metz) so am not too worried about it. Its a new squad and while the individual players are good, the defence will need time to blend.

I dont see what you meant by scrappy, as we were always in control of the game and other several opportunities to put it to rest.

[table]
[tr][td][/td][td][center]Real Madrid[/center][/td] [td][center]Deportivo[/center][/td][/tr]
[tr][td][center]Shots (on Goal) [/center][/td] [td][center] 28(11) [/center] [/td] [td][center]9(3)[/center][/td][/tr]
[tr][td][center]Corner Kicks [/center][/td][td][center]10[/center][/td][td][center]3[/center][/td][/tr]
[tr][td][center]Time of Possession[/center][/td][td][center]59%[/center][/td][td][center]41%[/center][/td][/tr]
[tr][td][center]Saves[/center][/td][td][center]1[/center][/td][td][center]8[/center][/td][/tr]
[/table]

No2Atheism:
Straw man argument,  

Wetin concern me with Savannah and Societie they are just examples of how double standards have been used, cus the last time i checked non of their directors and owners have been publicly ridiculed and they have not yet been islamised  

No to sharia.
No to Halal.
No to Sanusi
No to Oyb.

take that to the bank and cash it.

You sound like an Afonja (i.e. a muslim yoruba who has lost is loyalty and instead always gets betrayed by northerners) . Sanusi does not hide the fact that he is a Fulani first and foremost, yet here you are trying to bullshit me that its about northern muslim issues.

If it smells like shit then its shit end of story.



Death to Amerikka  
Death to Allah  
Death to Mohammed  
Death to Halal  

WTF?
You made reference to Savannah and SGB as if they were still existent and when called up on it, you straw man argument and go on to ramble incoherently?
It supposed to be a discussion and not a comedy show

Are all these Vanguard 'Northern Agenda' articles not from the same Omoh Gabriel?
any corroborating story from an independent source?

Spreading rumors such as these is what is actually damaging the sector, and not the actions of the CBN

dayokanu:
http://www.youtube.com/watch?v=BXp4v3CWuCs&feature=player_embedded

The blame for the first goal should be on the Wolfsburg player at the near post, who played on side about 4 bayern players, when the rest of the team and stepped up.
The other 2 goal were good counter attacks.

Real Madrid 3 - 2 Deportivo La Coruna

First Half Highlights
[flash=480,385]http://www.youtube.com/watch/v/khP9Ln3aQQk[/flash]


Second Half Highlights
[flash=480,385]http://www.youtube.com/watch/v/3w1CIkbJrKQ[/flash]

@DK
Your team tried today and deserved their win.
The moves to get Robben (and likely Rafinha) shows that the management (unlike you) are aware of the problems and are making moves to rectify things.

nolongTing:
Much respect @larez my brother.

Oh no, you see I simply mentioned the options available; your sentiments reveal a much deeper problem and that is you have no confidence in the government.  If that is the case, then you have no confidence in the present CBN govenor.  To be precise the CBN has no independence and as a result each successive government will continue to play political football with it.

Lack of confidence in a government run bank does not equate to lack of confidence in the government, or is the US citizens lack of confidence in a government run health care system equate into a lack of confidence in the US government?

The solution is: let the money men deal with a well regulated financial system and let the politicians do politics.  Otherwise we will carry on experiencing financial as well as political (Artificial) boom and bust.

So who are the money men that will be doing the regulation?
The CBN board is a political appointment but the executive board members are not politicians.
If you are suggesting that the bank executives regulate themselves, then I would like you to provide an example of where a thriving banking sector is devoid of government regulation

Why has Mr Sanusi has not criticized Mr Soludo? Why has Mr Soludo kept quiet? Are his actions simply a change of management style? or an indirect way of discrediting his predecessor?

and of what use is Sanusi criticizing Soludo? Is the CBN not a continuous entity?

When the crisis unfolded, most were blaming the rich but most of them have paid up.  For example Otedola owed about $130million which is about 10% of his estimated wealth by forbes - thats responsible lending by the banks. I am not trying to apologise or defend their actions but its a basic financial fact that "the higher the risks the higher the rewards" The rich always borrow the most and pay the least taxes!  Furthermore, in Nigeria its hard to lend money to poor people because of the lack of information, so how can the banks establish a credit rating system?

Another misinformation. The problem was not with the banks lending to the rich, but that the loans were so much in default that they became non-perfroming. If the money owed by Otedola & co was so platry, why have they not been servicing their loans by making regular payments as defined in the terms of the loan? 
or because the amount is small compared to their net worth, they should not be required to pay the loans? 
The fact that most of them are now paying up after the action taken by the CBN shows that they were simply abusing the system, likely in collusion with the bank executives, else explain why said executives did not take strong enough action to recover the debts.

So outside of the US and Canada, how many other countries do you know that have personal credit rating systems?   or do you think the US is the world?

So like the rest of you I will wait to see what unfolds but [size=13pt]it would have been nice to see Mr Sanusi build on the banking success and manage the problems rather than exacerbate the problems and wipeout the gains.[/size]

and what are the problems that have been exacerbated and which gains have been wiped out? please itemize with supporting evidence.

nolongTing:
Oh no  , even though I studied Banking at university I chose to go into software engineering instead - I prefer to write software thanks.

Typical aggrandizement of self importance like a toddler.
Of what relevance is this to the discussion at hand, or can we deduce that you are simply trying to add the lacking credibility to your posts.
Who cares if you were a professor at the havard business school

My opinion after watching this: 

https://www.youtube.com/watch?v=-4MtUELti0I  was:

I watched the whole interview and I liken his approach to that of a fighter who has just knocked out his opponent with fifty unanswered punches and then says "I hope my opponent is okay".  He said he’s aim is to clean up the Nigerian banking system, but to clean up what? Is it to prevent banks from taking unnecessary risks? To stop the provision of fraudulent loans? He’s whole affair is quite ambiguous in that he wants to create a more robust Nigerian banking system but at the same time he has brought about mass panic.

The effect of his actions is that his task will become much more difficult now because:
- He has destroyed confidence in the banking sector - domestically and internationally
- He wants to promote a robust banking system he has just labelled as reckless and fired 5 CEOs

It was funny how he complained about how Nigeria's credit rating had been down graded as if it was unfair - after he had caused all the chaos himself.  The truth is he should have advised the CEOs discreetly (without any media circus) that they should curb their risks and recover their loans ASAP - this would not have destroyed confidence in the banking sector.   Then he could have embarked on an international tour to promote and strengthen the image of Nigerian banking which has been built up over a decade.  Nigerian banks would have been seen as the African miracle we have all been waiting for but, you know the rest.

Some say that he’s intervention was timely because the banks were on the brink of collapse; but the fact is those with financial knowledge know that banks are a necessary evil.  Banks are the lifeblood of the economy - they are a special type of business that must be well managed and regulated and if they fail? They must be nationalized or taken over.  Bank execs will always be greedy because their shareholders demand that – Profit maximization; so we must get rid of this fantasy that Nigerian bankers should not be greedy, Bankers will always be greedy! That is capitalism, if the banks fail the government must cleanup and create the environment for the banks to rebuild.  For example in the UK a Bank called Northern Rock had debts of around $180 Billion! Right under the nose of the FSA (Regulator) The CEOs were called reckless and they resigned on a nice pension and the bank was nationalized.  The CEOs were not arrested like in Nigeria, they even got paid their Bonuses! But in Nigeria the government pumps in a paltry $2.6 Billion and sends the EFCC after all the executives, doors being busted, CEOs fleeing for their life – what a mess!

But to be fair to Lamido, he seems to have good intentions and a noble cause but its seems as if he’s over exuberance has caused immense short-term damage. 
My feeling is that his 'Rambo style', cleanup will make the Nigerian banking sector weak and vulnerable to controversial takeovers, can anybody see any good coming out of his actions?

see https://www.nairaland.com/nigeria/topic-316613.0.html

nolongTing:
@biina your scrappy, desperate, unpaid attempt to defend your god Sanusi are pathetic.  Its the 'Kola nut', banking policies which you have mentioned above, which have created this mess. You are one of these fake Nairaland experts,  “I vote for option 3 ahead of the other 3”, stop dreaming, its hilarious!

Your idol could have done things cleanly without a media circus which has caused so much damage.  His intentions are sound but the results of his actions are not.

So what are these damages you speak of?
please list them with supporting evidence
The only damages are being caused by people like you who spread misinformation.
I really couldn't care less about Sanusi as a person, but I will laud and support any action I believe is a right step in taking this country forward.
Its people like you whose senses are clouded by ethnic bigotry, and cant see beyond the bridge of their nose, that are ruining this nations.

nolongTing:
I watched the whole interview and I liken his approach to that of a fighter who has just knocked out his opponent with fifty unanswered punches and then says "I hope my opponent is okay".  He said he’s aim is to clean up the Nigerian banking system, but to clean up what?

To clean up bank executives that reduce banking to a ponzi scheme by doctoring their records to hide the fact that the bank is failing

Is it to prevent banks from taking unnecessary risks?

No. Banks are allowed to take risks as long as the risk exposure of your portfolio remains within the set regulatory limits. A banking license allows you to do business with depositors funds on the assurance of the CBN and the NDIC. It should not be abused. Example, you cannot invest the entire depositors funds in the stock market.

To stop the provision of fraudulent loans?

No. You are free to grant fraudulent loans, but be ready to face the consequences if caught.

He’s whole affair is quite ambiguous in that he wants to create a more robust Nigerian banking system but at the same time he has brought about mass panic.

What has brought panic is people like you misrepresenting the truth and trying to justify your position by advertising a non-existent panic

The effect of his actions is that his task will become much more difficult now because:
- He has destroyed confidence in the banking sector - domestically and internationally

Evidence?
Have you (or anyone you know) gone to the banks to withdraw and be declined because  of liquidity problems arising from mass withdrawal? cos that is what should happen if the confidence has been destroyed

- He wants to promote a robust banking system he has just labelled as reckless and fired 5 CEOs

The sacked executives were reckless in mismanaging depositors funds. Getting rid of such, along with transparency and accountability, is what promotes robustness.

It was funny how he complained about how Nigeria's credit rating had been down graded as if it was unfair - after he had caused all the chaos himself.

The S&P ratings was not downgraded because the CBN sacked the executives, but instead it was based on a misinterpretation of the injected funds into the bank

Standard & Poor's cut its sovereign credit ratings on Nigeria deeper into junk territory, after the government bailed out five large banks and saw a fall-off in oil revenue.
Nigeria's foreign currency rating was cut by one notch to B+, while the local currency rating got a two-level cut, also to B+.
The ratings firm, which maintained its stable outlook, said Nigeria has become less fiscally flexible after its central bank planned a $2.6 billion capital injection into five domestic banks, which, combined, make up 40% of the country's loans.
"In our opinion, the central bank's action has begun a welcome restructuring of Nigeria's banking system, but it also reveals deep problems in Nigeria's credit markets," S&P said.
Nigeria's banks were left overexposed to commodities when oil price spikes set off a flurry of borrowing and investing, and banks lent heavily to a booming stock market. The ensuing fall in commodity prices and global economic downturn left its markets reeling. Its stock market has fallen around 60% from its highs early last year.
S&P said that the government would increase its borrowing requirement as a result of the bank takeover, and forecast a 2009 deficit of 4.5% of GDP.
"On the other hand, our central forecast is that the current problems in Nigeria's financial markets will not lead to a balance-of-payment crisis," the credit rater added.

The error is that The CBN has not bought into the banks, which is what would have happened if the funds were injected into the tier 1 capital. Instead they have been injected into the tier 2, essentially acting as an insurance policy.

The S&P change has been criticized in several quarters (home and abroad). For comparison, the Fitch ratings remained unchanged.

The truth is he should have advised the CEOs discreetly (without any media circus) that they should curb their risks and recover their loans ASAP - this would not have destroyed confidence in the banking sector.

The bank CEOs were not fired for taking risks. They were fired because they took risks, lost out (evidenced by the huge portfolio of non-performing loans) and fraudulently manipulated the figures in their books to hide the truth.
Should such fraudsters be left in office? or should they have been given time to call on their political friends to protect them?

Then he could have embarked on an international tour to promote and strengthen the image of Nigerian banking which has been built up over a decade.  Nigerian banks would have been seen as the African miracle we have all been waiting for but, you know the rest.

To go about image laundering without addressing the core problem is folly in the least, or is that not what Dora is guilty of in trying to rebrand Nigeria? or do you think investors are that stupid?

Some say that he’s intervention was timely because the banks were on the brink of collapse; but the fact is those with financial knowledge know that banks are a necessary evil.  Banks are the lifeblood of the economy - they are a special type of business that must be well managed and regulated and if they fail? They must be nationalized or taken over.

The banking sector, is different from 5 banks. Leaving those 5 banks to continue borrowing from other banks without repayment (like that have been doing from October 2008 to the tune of N200Bn in 8 months) would have resulted in a collapse of the entire sector. The government taking over banks should always be a last resort, as it is often essentially using public funds to cover up the the greed of a  few,and even in that case, the greedy few should be investigated and brought to book.

Bank execs will always be greedy because their shareholders demand that – Profit maximization; so we must get rid of this fantasy that Nigerian bankers should not be greedy, Bankers will always be greedy! That is capitalism, if the banks fail the government must cleanup and create the environment for the banks to rebuild.  For example in the UK a Bank called Northern Rock had debts of around $180 Billion! Right under the nose of the FSA (Regulator) The CEOs were called reckless and they resigned on a nice pension and the bank was nationalized.  The CEOs were not arrested like in Nigeria, they even got paid their Bonuses! But in Nigeria the government pumps in a paltry $2.6 Billion and sends the EFCC after all the executives, doors being busted, CEOs fleeing for their life – what a mess!

So you think everything that is done in a foreign country is right?
What happened in the UK was wrong. The FSA failed in its duties (and admitted as much) and let the situation degenerate beyond recovery. The nationalization occurred after failed bids to have private investors agree to takeover the bank and return public funds within a set limit of 3 yrs. The bank has fortunately recovered at the expense of the shareholders who lost most of their money. The bank would likely be sold at the end of this year.

As to the Northern Rock executives not being prosecuted, it was because they were not doctoring their books! If they were, they would also have been charged like the Enron executives or Madoff. Northern rocks problems stemmed from the credit crisis which caused a liquidity problem for them. Their assets outweighed their liabilities. They were not mismanaged into insolvency, like the 5 banks in questions whose liabilities have eroded most of the share holders funds giving them a  capital adequacy ratio, CAR = capital/risk of less than the regulatory required 10% with one bank being as low as 1.01%.

So please do not sweepingly compare mango to coconut even though they are both drupes.

But to be fair to Lamido, he seems to have good intentions and a noble cause but its seems as if he’s over exuberance has caused immense short-term damage. 
My feeling is that his 'Rambo style', cleanup will make the Nigerian banking sector weak and vulnerable to controversial takeovers, can anybody see any good coming out of his actions?

There is no rambo style about it. The guy basically took the bold moves that are required to clean up the sector. This is what should have been done before the consolidation exercise, when the banks would have been smaller and the effect of the failing of one bank less critical. This is the best supervisory move in the banking sector in the last 2 decades.

Like I said earlier, you think you know what you don't know

Olong:
Now sanusi is movin too fast 4 my likin:he identified d rot in our bankin system,a gud thing.he fished out #400billion frm d thin air 4 dia bailout,a gud thing too.but invitn foreigners to acquire d banks?for God's sak d guy's barely 3weeks in d saddle.someone should restrain this nigerian version of usain bolt b4 he sells us al off!

Na u go buy the banks? or you want the same corrupt politicians to take over the banks to better help them in concealing their embezzlement?
If there are foreign banks or investors, who are willing to invest their money in our banks, then I think it should be welcomed. Unlike the MTNs who have been using local sourced funds and siphoning the gains to SA.
The current laws allow any entity (including the likes of bin Laden) to own an entire bank by proxy. I dont see how BoA or HSBC owning a bank is any worse.

odedele:
hw can u sack md witout recourse 2 d board,shareholders or even given an opotunity of defending thier self,y not finish conducting audit of d whole bank b4 taking action.NIGERIAN SHOILD RISE UP B4 DIS MALLAM KILL OUR INSTITUTNS WITH DAT D SOUTHERN LABOUR HARD 2 BUILD.

He didnt sack the MDs, he cleared the entire board.  He does not need to consult the shareholders, as the executives were appointed by the shareholders to protect the interests of the shareholders, while the CBN is responsible for protecting the interests of the depositors and the public. The shareholders will be able to appoint new executives once the interim period is over.

People talk about opportunity to defend their self, on what? This is not a case of my word against yours between the CBN and the bank executives
- The audit was carried out in cooperation with the banks
- That the 5 banks owe 90% of the debts in the EDW and were dragging other banks down with them is a fact. They were continuously borrowing from other banks and not repaying
- That they had huge amount of non-performing loans that were not reflected in their books is also a fact (e.g. Oceanic had N278Bn). The filings were being doctored to hide the non performing loans
- That said banks were over exposed in the capital markets and Oil & Gas, which were high risk investment areas
- That said banks had CARs that were below the regulatory 10% i.e. the were bordering on insolvency, and  one bank with CAR of 1.01% was technically insolvent.
So which of the above needed defending?
What they need to defend is if their actions were simply out of innocent incompetence or for personal gains, and that is what the EFCC is suppose to investigate.

The five banks were audited because of their constant borrowing (without repayment) in the interbank market. It was based on initial findings on the banks that the audit was expanded to cover all 24 banks and it is being carried out in batches (5 initial suspects and 5 others have been audited, while a second batch of 11 will be concluded by the end of August). So why should the CBN wait to fix what they know is wrong in some banks, simply because they are auditing other banks?

Given the constant borrowings from other banks, the CBN had 3 options to stop those 5 from dragging down others:
1. Suspend those banks from the interbank market. Essentially killing those banks as depositor will know that they are illiquid and will withdraw their money.
2. Withdraw the licenses from the banks and save them from slow death from illiquidity
3. Clear out the executives and try to reform the bank
4. Fold its arms and wait for the next 3 month while they complete the audit. Risking other banks and possibly a collapse of the sector.
I vote for option 3 ahead of the other 3, and that is what the CBN has done  as opposed to option 1 and 2. Option 4 shouldn't even be considered.

proudly9ja:
erm, whats the result of the audit of the 11 remaining banks?

The audit is to be completed by the end of August

First true test for either side. Should be a good game.

This must be the most boring super cup ever

debosky:
Eduardo banned for what?

Mr. Ayusman can you tell me that Dudu 'dived' to get a penalty? Were you in his head? Can you tell me whether he lost his footing, fell over due to his own momentum or the slight touch from Boruc took him over or he simply avoided a challenge remembering his terrible injury of over a year ago? 

You CANNOT single Eduardo out, seek to ruin his name in football when the same standard has not been applied to other players in the past. You cannot pick and choose when to apply rules and MUST do so at all times. Every single debatable penalty must be investigated or NONE.

I trust Arsenal FC on this - UEFA will not know what hit them when we bombard them with evidence. If they go ahead to ban Dudu everyone who plays us in the CL better watch out because we will question and report every single incident to the 'chief inspector' and get them banned too.

UEFA have not said they are reversing the referees decision on the penalty, changing the score line or requesting a replay.
Eduardo is accused of diving, and will be punished (and rightfully so) if found guilty.
Have other players not been carded if they are found guilty of diving by the ref?
If you can prove his innocence, then go ahead, though I doubt it, as the video evidence was clear that there was no contact.
You only have grounds to complain if UEFA doesn't take similar action against future offenders.

This should be an easy game for Barcelona, particularly given that they are essentially playing 12 v 10

The level of semi-illetracy in Nigeria is alarming

SapeleGuy:
Biina - you and others are right that this shouldn't be an ethnic issue. For me the issue is the legality or lack of it and wanton disregard for due process.

so where is the illegality, and the due process that was ignored?

The alternative approaches are:
1 He should have given the banks the opportunity to recapitalise or reach the CAR requirements by XX date.

The banks have not been penalized. The CBN has only sacked the erring executives, and put an interim management in place. Or should said management have been left in place?
The said banks had earlier been given an opportunity by Soludo when the EDW was created in October 2008. The result was that the 5 banks only ended up taking more loans from other banks, making them responsible for 90% of the outstanding debt in the EDW by July 2009.

2 Guarantee customer deposits to a sensible amount, currently NDIC does so to the tune of N100,000 per account - a derisory amount.

The CBN does not insure deposits, that is the job of the NDIC. It has done that which is in its power by injecting capital into the banks to shore up their reserves.
To increase the deposit guarantee level would require having a clear view of the sector and weighing the ramifications of such levels of exposure to the FG.
You cannot increase the deposit levels and then have banks failing left and right.

3 Recommend that a financial regulator (totally independent) is set up, similar to the FSA in the UK.

That is a long term move that would require planning and involvement of both the executive and the legislative arms of government. Moreover, while it may be a good long term move, it does nothing to address the current problems revealed by the audit.

Sanusi & EFCC - Have acted the role of judge, jury and executioner. CBN should publish all the audit reports so we know they are behaving in an open and transparent manner.

The CBN has removed executives, who have mismanaged the banks into insolvency and have doctored the books to hide it. That is their job as a supervisor of the sector. They are the judge, jury and executioner. You can fault the BOFIA that empowers them as such, but do not fault them from acting within the scope of their authority.
The EFCC is currently investigating the matter to determine if criminal charges need to be brought against any party. They are not acting as judge, jury or executioner.

How could he sanction the use of a list that is 3 months out of date for an issue of such magnitude to our nation. Very sloppy indeed.

The list was not used for sacking of the executives. They were sacked because the audit revealed that they had mismanaged the bank into insolvency and doctored the books to hide the truth.
The list is being used in the debt recovery bid and details non-performing loans (i.e. loans that were not being serviced as required). The time lag of 3 month is fully acceptable, as the loans have been neglected for substantially a longer periods (possibly years before being classified as non performing) and thus there is no need to expect that a loan that has not been paid in the last 2yrs is now fully reconciled. I expect an updated list to be published in due time.

slimshay:
abegi who are those saying we shld let it go, let what go, who doesnt know platini is a stupid nincompoop, he has got it in for arsene wenger since forever. na beef go kill am. some months ago even alex frguson and other coaches had to come in to politely tell him to shut up when he was running his mouth against wenger.

and yes sauron i saw it, does that mean they are the ones telling him what to do. with all platini's egomania you think some scots will tell him the decision to take.
this thing is simple he has found a reason to stick one to arsene wenger and he will not let it go, for that he is a fucking idiot, cos he doesnt know what precedence he is setting just to scoree a cheap personal point. and to think he is a legend in the game, he is a fucktwat to use sauron's words!!!even if eduardo had said no ref it is not a penalty this same thing woulda happended, the penalty would have been given. and in all sincerity do you think platini wld let it lie like that?! against wenger!!! abegi!!!

arshavin did, a lot of players did. Eduardo is a decent guy, got more than a year internship with medical staff didnt say 1 indecent thing about the guy that put him there, no matter how goal.com tried to twist it, and now they want to make him out a bad guy?!!! for real, F**k platini!!!

let the games begin, they dnt know what they have started!!! kudos to all those who call the refree's attention o, but we all cant be Di-Canio abeg!!!

Did Eduardo dive or not? if yes, should he not been punished?
If he had hit an opponent off the ball, would we be having this discussion?
Arsenal should complain when UEFA fails to apply same standard to another club.
For me it is a good move towards limiting the shameful act.

George_D:
the man should have been given a fair hearing before he was removed?

a fair hearing by who? CBN, CIBN or court of law?
and to ascertain what? that the bank is insolvent or that the books were doctored or if his actions were in pursuit of personal gains?

Kobojunkie:
When was this loan acquired? Why is the EFCC concluding it is a bad loan? Surely, not all big loans are bad loans? Why is the EFCC involved?

vigasimple:
EFCC is now the bank debt collector. we do not have systems and institutions. Debt/credit is a civil matter .

Take the case of Arisekola, he had used the funds to buy shares that went down,he is liable for the debt but it is a civil matter that bank should sue or bring insolvency proceedings. NIGERIA IS A CONFUSED STATE

So you are assuming that the question is over how much they owe, and not if the loans were acquired via irregular channels?
If the loans are suspected to be have been granted/maintained outside of due process, the EFCC has the right to investigate the matter and question the affected parties.

wiseguy:
My take in this whole saga is that this a govt that prides itself on the principles of rule of law yet chooses to treat and disobey the law with impunity. If as alleged, this bank directors do not get the necessary fair hearing to defend themselves b4 CBN then i beg to disagree with Sanusi and his policies. He might be a saint but that does not make him a good decision maker. For the EFCC, maybe they are now trying to impress Hilary Clinton. Their involvement and the commando style they introduced is quite unnecessary. I don't know if it has become a crime to owe or borrow in Nigeria.

what then was the purpose of the audit? Was it not to determine the true state of things? was the audit not carried out in cooperation with the banks?

George_D:
isn't this rather hasty?

because?

na_so:
Dis bina guy u dey try for sanusi well well o. I fear u I swear.

First I want you to know that some of us opposed to sanusi's acts so far do not have anything personal against him. I for one do not have any special sympathy for the sacked CEO's either.

Yes the determination of cooked books is not a judicial matter, however I hope you are not saying that there are'nt procedures for doing so. It is purely lawlessness for the CBN to feel that whatever they do or say cannot be appraised on the basis of fairness and norms of such oversight functions worldwide. In accounting even meagre issues like depreciation can lead to serious debates amongst professionals , not to talk of determination of loan status.

The point is a even if the sacked CEOs are guilty (though i feel almost all bank CEOs in nigeria  are), a poorly executed task by the CBN will leave the financial system weaker and everybody suffers. Then even the  CBN will have serious credibilty battle on its hands.

I will not call for the removal of sanusi just for this seeming error , however no matter how honest his intentions are , it will take require a glaring rape of fairness for the courts to uphold his actions.

Those bank executives are gone permanently

It is not about defending Sanusi, but rather defending a move to help clear the system of some of the rot.
People argue that Sanusi acted wrongly and did not follow due process, yet none have come forward to present the alternate approach that should have been taken given the facts of the case.
Some even say he is acting out a script.

People should read the CBN address, follow the events and actions carried out by the CBN, instead of coming online to make less informed contributions.

For example, a common arguing point for the anti-sanusi is that he should have waited till he completed the audit of all 24 banks. The question then is: why?
The flow of event was
1. Based on activities in the EDW, five banks were suspected of having liquidity issues. Their actions in the interbank market was putting the entire sector in grave danger (they were borrowing from other banks and weren't able to pay back. The EDW debts are guaranteed byy the CBN)
2. An audit of these banks was initiated to determine the true state of things
3. Early discoveries showed that not only were the suspicion of illiquidity true, the filings of the banks were not a true reflection of their condition (i.e. they have been doctoring their books)
4. If properly accounted, the losses of the 5 banks had all but eroded the shareholders funds and they needed capital injection to meet the minimum CAR requirements
5. The audit was thus expanded to all 24 banks, of which 10 banks, including the confirmed detractors, were processed in the first batch.
6. The results of the audits was acted upon and led to the sacking of the executives of the said banks, and CBN shoring their capital base for the interim
7. 11 banks are currently being audited in the2nd batch with reports expected at the end of August.

So should he have left those bank who were clearly baneful to the sector? and let them continue their actions for the next 2-3 months pending completion of the audit? giving said  executives more time to derail the process?
or should he have simply suspended them from the interbank market, pruning them from others.? resulting in depositor panic and essentially killing those banks?

Let the naysayers please tell us what should have been done differently.

I have nothing against anyone criticizing Sanusi (as no one is perfect), but I would rather one does it from an informed point of view, and not just cos of some ethnic bias or simply for the sake of it.

Diving and all the simulation nonsense is ruining the game. Divers should bear the same risk as the people they are trying to get in trouble.
Eduardo should be suspended for a game, and I 'm hoping UEFA continues to punish retroactively divers who got away with it during the game.
Wenger is simply an hypocrite, who seems to be th only that think if eduardo dived was debatable.
I guess the rest of the world is blind

mikeansy:
He was at the top of his profession and a Professor of economics. Already practicing Macro economics internationallly.

However this is not and never will be Sanusi vs Soludo

This whole attempt to point at Soludo to justify some of the madness of Sanusi is very shameful. Soludo is no longer the head of CBN or any other organisation in Nigeria, if you can not undertand why we should be looking forward and working for continuity then it is unfortunate.

Bear it in mind that anything Sanusi takes over through the backdoor will not last. In fact its longevity will be as much as Sanusi is in office if not shorter as the courts and the Senate will invalidate most of these process.

It wasnt supposed to be a Soludo vs Sanusi, but simply pointing out the irrationality of you proposed requiremnts, saying sanusi is unqualified to head the CBN.

Anyways that is essentially off topic. I would rather you address the requests in the latter part of my post.

- tell us the other relevant points of view that the CBN has ignored?
- point out the first action that the CBN took that was wrong and offer the better alternate approach?
- describe the due process that was ignored by Sanusi?

All are to substantiate your earlier allegations.

ACHOJAH:
During consolidation, Bank of the North owed N43 billion, Soludo allowed debt cancellation to allow BON merge into the UNITY bank group.

-UNITY bank has not published its account since consolidation !!
-UNITY bank and has more non-performing loans than any other bank in Nigeria.
-UNITY bank was bailed out to the tune of N70bn, yet their MD was not sacked.

Sanusi why have you ignored UNITY bank?

Ignored? has unity been said to be excluded from the audit? All 24 banks are said to be slated for auditing.
The 10 banks already audited are Oceanic, Afribank, Union, FinBank, Intercontinental, FBN, UBA, Diamond, GTB and Sterling
Yet to be audited are Access, Citibank, Ecobank, Equitorial Trust, Fidelity, FCMB, Platinum Habib, Skye, Spring, Stanbic - IBTC, Standard Chartered, Unity, Wema, and Zenith Bank Plc .
Audit of 11 of these banks are set to have commenced and should be concluded by the end of the month.