₦airaland Forum

THE possibility of yet another round of systemic failure in the banking industry, raised recently by the Nigerian Deposit Insurance Corporation, calls for quick, concerted pre-emptive action. The revelation by Umaru Ibrahim, managing director of the NDIC, that weak corporate governance and internal controls were tipping the financial sector towards crisis conflated with a similar alarm raised by the International Monetary Fund anchored on weak regulation and adverse operating conditions. With the economy falling short of growth projections, urgent, extraordinary measures should be adopted today to prevent a catastrophe.

Umaru could not mask his apprehension in an address presented on his behalf at the FITC discussion programme in Lagos: despite stringent and elaborate rules, weak corporate governance culture had rebounded in the banking system and, along with ineffectual controls, presented regulators with the possibility of bank failures. For regulators, he said the fear had prompted moves to conduct tests and moves to stave off adversity.

Earlier in March and April this year, the IMF had issued concerns over Nigeria’s continued vulnerability to shocks amid a slow exit from recession, rising debts and its ability to withstand the aftershocks of another global meltdown predicted by leading experts.



Ibrahim’s alert confirmed the long-running fears of systemic upheaval in the banking sector, which barely survived the shocks of 2007-2009 and only after a decisive intervention by the leadership of the Central Bank of Nigeria that prevented failure. The IMF has identified weak regulation as a critical factor in the last few years. In what some see as self-indictment, Godwin Emefiele, the CBN Governor, recently took to warning the deposit money banks of sanctions for round tripping and other sharp practices in the foreign exchange market. The recourse to sermons and warnings demonstrates the crisis of regulation that has for long plagued the country’s financial system. The CBN is armed with enough legal powers to monitor and sanction abuses and misdemeanours by bankers. Lamido Sanusi, as governor (2008 to 2014), proved this when, after stress tests, the central bank removed the boards and managements of eight banks, appointed interim replacements that nursed them until they recovered and were bought by new investors. Sanusi also identified gross insider abuse by directors and managers for the crisis.

Apparently, as the CBN itself has acknowledged, insider abuse is back; sharp practices in the forex market partly blamed for the collapse of 44 banks between 1994 and 2000; money laundering and violation for reporting regulations, as well as false accounting have taken hold in the DMBs.

Can Emefiele prevent systemic distress? Doing so requires, above all else, courage and astuteness. It was the frequent recourse to the CBN’s overnight lending window that alerted Sanusi to the stress in some banks in 2009. In 2017, the bank said, 60 per cent of the average daily N216.34 billion the DMBs borrowed from its Standing Lending Facility was for Intra-Day Lending Facility.

Reports, evidence and testimonies in corruption trials have detailed how regulations and anti-money laundering laws were brazenly violated by bankers to assist high profile public figures loot and hide public funds. These disclosures should have prompted audits, fines and, where necessary, severe sanctions on complicit banks, directors and managers, some of whom have testified to their involvement in court.

The CBN needs to act fast as most Nigerian banks, post-consolidation, are big and a failing one could pull down others. While inefficient banks may go bust in good times without threatening the entire system, an economy that grew only 1.9 per cent in the first quarter of this year, just two quarters separated from a recession, suffered nine million job losses in three years and, with youth unemployment of over 20 per cent, should avoid systemic bank failure. This principle was applied during the 2007/8 meltdown when the United States Treasury gave an initial $700 billion to save some big banks, Italy €17 billion and Britain £500 billion.

The CBN and NDIC should immediately undertake full audits and examinations of the banks; there should be no hesitation to use their considerable powers to remove errant boards and executives. Fraud cases rose by 56.3 per cent in 2017, according to the NDIC, while the CBN stress tests in the same year found rising cases of insider abuse with directors accounting for 40 per cent of the N2.4 trillion non-performing loans in the industry. Emefiele’s CBN should explain why such directors are still in the system and why banks have persistently exceeded the specified five per cent NPLs ratio without serious sanctions. Elsewhere, Germany’s Deutshe Bank was slammed $14 billion by regulators in the US and Europe; by early this year, the world’s top 20 banks, according to a Guardian of London report, had been hit with £252 billion in fines and penalties combined over five years for various violations.

The top priority is to protect customers: the CBN should be proactive and reform itself for efficient monitoring in real time, applying the latest technology tools to weed out corrupt officials that collude with errant bankers. It should wield the big stick and avoid favouritism.

Our banks are not fulfilling the critical role of financial intermediation partly because the operating environment is dominated by government funds, which fuel corruption, rent-taking and rule-breaking while squeezing out the private sector. The government should take the sensible approach of rolling out practical, sustainable policies of privatisation, liberalisation and export promotion to stimulate start-ups, SMEs and massive investment in agriculture, construction, transportation – rail, water and aviation – as well as mining and manufacturing. The financial system will become more efficient when DMBs rely more on private sector funds and less on public sector funds and forex, two toxic streams that have derailed banks from their traditional roles in Nigeria.


http://punchng.com/nigeria-cant-afford-another-bank-distress/

IgboAmakaa:
ok bye wild dream man


u have a big problem entirely

..............no problem compares with the problem of "hate infested blood and brain"..............it will take another life to purge completely

IgboAmakaa:
yea in ur dumb head i did, but u continued to quote me back


no who is more dumb here

Lol.... ;Dso you're so dumb and foolish not to know you quoted me first. This is the proble with children of hate, no matter how glaring the facts are they'll never accept....they think with their emotions rather than brain, if you have any

IgboAmakaa:
lol

u keep quoting me back dulll head


i cant hate anybody


pls open ur brain and go through my write up if only ur small ur brain can contain it


i am only preaching peace

You're actually more dumb than I think....you quoted me first...what in the world would make me quote you first. Nothing from you and your lots would surprise me to quote you first, the hates in you is hereditary....cry cry babies

IgboAmakaa:
that hate embedded in u and ur likes is what i am voicing out for u to see

...and the hate still wont let you stop quoting me...we know, its like peak, IT'S IN YOU.

fyneIjay:
The will of the people have been truncated many times since the inception of Nigeria as a country, and truncating on June 12 1993 just add to the statistics.
So please you shouldn't take the moral high ground using the will of the people, because the elites that own Nigeria do not respect it.

What exactly is your point? June 12 1993 was and is still the only time in Nigeria when a concluded electioneering process was truncated by the "powers" that be...Stop looking at this issue through an ethnic binocular; that is always not devoid of emotions, hatred and bile. the fact that the will of the people have been trampled on many times through many means does not justify for any, so stop using it as a justification. June 12 is about Nigeria and Nigerians not Yorubas..you people should assimilate that...afterall the said candidate was voted for by Nigerians from all regions in Nigeria.....

We need to learn to accept truth even in the face of the present ethnic and regional tussle. it is glaring that this June 12 declaration in recent time is a political card for political gain. That is what we all should concentrate on and ensure that in the next poll we take decisions based on facts rather than emotions....irrespective of your tribe and region, our collective actions and inactions will have equal effect on us...

fyneIjay:
Abiola was well known to sponsor the military boys to topple governments. In fact Babangida and Abacha were known allies of MKO.
Karma ? I leave that to you.
You help truncate oust a sitting president/ head of state and you think Karma doesn't remember. smh

You still don't and won't probably get the gist right? Nobody is saying the Guy is a saint, infact I have no singular respect for any Nigerian politician cos they are all the same, irrespective of tribe or region they come from. But the point is that June 12 when Nigeria voiced their opinion via an electoral system should not be allowed to go uncorrected. that is what objective people are saying... and despite Abiola's baggage, if majority of Nigerians still wentr ahead to vote for him, then that decision should be respected...

IgboAmakaa:
Lol u are are the one crying



i am only sending a strong information that should be avoided in future. i dont know it is paining u

What an information?...everybody in Nigeria knows the children of hate that cries about everything.....it's a fact your tribe is know for...no one will contest with you on that...

IgboAmakaa:
some idiots like you will say it is fake but will be quick to agree to it when it is labeled against other tribe



if u like yan rubbish as u like

While foolish people born of hate and bile like you and your lots will never for once take a decision devoid of emotions...Cry cry baby..continue to cry....we are not surprised, your fathers cried, you are crying and we are sure you'll hand it over to your children.......

Omo eran

some idiots went to create a profile with a Yoruba name and start yearning rubbish!!!...abeegi

sagio09:
Bros, wetin be dix? Diz na d highest level of stupidity. Why re u always taking serious things 4 granted. D dude is voicing out something that is paining him and something of importance but u're exhibiting childish behavior on the matter. If u cant help or advice him, jst shut d fork up or better don't read atall. Remember, u can also be in his shoes. Make we dey reason like humans na.

The stupid person here is you. I made that joke to cool the guy down and he got the joke and acknowledged it. But here you are crying more than the bereaved....is it your serious something? is it your joke? Don't you think carrying another person's matter for head makes you look foolish? Oya run go play.......ode

fyneIjay:
The media want to whitewash MKO

when will you people comprehend that June 12 wasn't about Abiola. It was about the Nigerian people that went to the poll and voted for their Candidate of choice but their will and choice was never allowed to see reality. June 12 isn't about the Candidate that won but about the people. Majority of those that stood up for June12 were not even people of Abiola's party but those who knew that the will of the people should never be trampled on by any authority.

Please get it right and stop the misconception..

lovat:
Does the Op look like someone kidding? I pray someone we get your hopes up and end up telling you #JustKidding

and here comes those people that cries more than the bereaved...may it be on to you as you have stayed up there...foolish people with foolish prayers

EZENDDIGBO:
i don't blame you. I blame the leaders. you think everything is a joke?
if you want to help, Pls help than to behave like a kid cos your joke is so dry and annoying.

My brother na so you dey vex?....I was just kidding joor....God will bless your hustle

Errrmmm...I'm actually interested in helping you. But the thing is this, since I'm the one with the money, i should be setting the terms. no be so?....so this is my offer, I'll give you 400k infact I can jack it up to 600k but that your sister that can cook well will be the collateral.... ....

She'll be staying with me, giving me both physical and Spiritual food till you're able to pay back.......

As you can see I'm not stating when you should return the money, yea I'm that nice....you can use as long as you want, but your sister will remain with me for as long as my money is with you. ......chaii, pple always tell me that I'm too nice, I think its true..now I know


just PM me when you're ready....as for me, I was born ready.

False Alarm....OBJ and his local antics

So many gullible people on this forum. Imagine someone calling Humphrey Nwosu a hero.....Lol...

Many of you should go get some history books and study.

chiedozie198100:
MKO Abiola was the electoral commision chairman in 1979 that denied Awolowo of his mandate and rigged the election in favour of shagari.

this is true facts of history.

You are one of the reasons why I find it difficult to engage people online. How can one be gullible and stupid at the same time? Ordinary google would have informed you that your position is wrong and fallacious. Abiola Electoral chairman my foot!!!

Please go get some education, you'll surely need it in future.

Chaii Buhari and co-horts playing politics cos of end term....hmmm we are watching.

wow!

iLegendd:
I pity your type. One minute men will always support their fake sex educator friends. #Smiles. #NoOffence

I know your type, you trivialize corrections while you privately ponder on it..I hope i'm right on this about you. cos you really have a lot to learn from that guy.

MaziOmenuko:
Lol...your ignorance knows no bounds. You could have saved yourself the embarrassment by checking out who you are quoting first before making sill'y assumptions. I have nothing against selling books; the books you sell are not authored by you neither do you have exclusive ownership to them. I am a writer, you can check my works; most of them are free here on nairaland while others are on many other portals being sold. Guess what my specialty is? I write Sex so your ignorance is unlimited.

Kegel exercise, and all other exercises that help sexuality is available FREE online. Infact, a 1gig data of N600 can download many pags and many youtube videos that will be richer than whatever book you are selling.

But that is not my point...

My point remains that exaggerating sexual prowess to the tune of 7hrs in bed is an unneccessary lie. Maybe you intend to use it as a gimmick to get costumers but if customer satisfaction is anything you hold to high esteem, you wont be lieing to your clients because at the end, they are dissatisfied with the product/book and still feel less of themself.

Like I said before, you have a lot of things to learn; but if you keep up with your shallow attitude, you won't learn nada.

Finally, a knowledgeable person has taken this guy to the cleaners. its been long overdue......

His so called books are for kids....

Despite his level of education, he is the most controversial buffon I know. Why and how does a sitting Governor wakes up to think about causing problem in his own domain? What is your buiz with whatever anybody calls himself in their community?

El Rufai is an embodiment of problems.....

UyaiIncomparabl:
Come and rent my saloon car.

Hey you bring your head.

Ekpeitut:
What is epic about this response?? We Nigerians like to believe we are very smart and think highly of ourselves. But in truth we aren't! just look at our leaders and tell me how you can reconcile this absurdity that only daft, slowpokes, brutish and greedy politicians lead a population of "smarties".

All this witty comebacks or comments we post on social media don't change a damn thing about our sorry state. There is sense in what Ben Bruce said. Instead of criticizing every comment along the lines of political affiliation, think of what the average Nigerian would stand to benefit.

Oh...I forgot our current crop of leaders and even some of citizens don't have the capacity to reason above acquiring houses, cars, corruptly enriching themselves and other frivolities.

Get your PVCs people! Nothing short of a Total Reset is what we need in Nigeria.

Bros, you didn't make any sense...not at all

Lol...GUARDIAN AND PROPAGANDA be like 5&6...

GAZZUZZ:
08033910382

Many thanks...I'll call the number tomorrow...

The real issue is that you're living above your means...That apartment is too expensive for you. Imagine, by the time you add other monthly expense to 55o Euros, you'll realise that you're struggling. I bet you're not saving a dime from your monthly salary. Ideally, every salary earner should save at least 20% of their monthly salary. have you ever imagined if you lose your job (God forbid)? how do you intend to pay for that apartment?...Please think about the real issue and make necessary adjustments..

Hello Oga GAZZUZZ, pls I believe you would know. Please I need a rental car for a week in lagos. I need to drop my car for repairs and body work next week but I need a temporary alternative for just 1 week. Do you know anyone that does this business. Preferably a Toyota, cos that's the type of car I drive.

Thank you.

Hello Guys, please I want to find out if people do temporary car rental service. I need to rent a car for a week. I would be taking my car for repairs and the whole repair work will take 1 week. But I need an alternative to take me to work and back during the period.

Please if there's anyone here that does that or knows anyone that does such rental service, I'll be glad to connect with him.

Thank you.

People are taking the excuse of "this is a faceless forum" to a while new level this days....

I would suggest that all those "boys" who made derogatory comments about women with miscarriages should offer apologies without reservation. ......Those comments are disheartening and I'm sure their mum wouldn't be proud of them if they were to see those comments..........

Yea there are many issues with women, but to use that as an excuse to discredit them is a new low....

To all women and most especially to the woman on this thread who mentioned that she's had 2 miscarriages, I pray that the good Lord that dwelleth in Zion shall give you children like Samuel, David and Esther. ...they shall grow in wisdom , knowledge and respect for women...and their days shall be longer than that of their parents. ........