[CBN Governor, Godwin Emefiele]
The trending vocabulary/diction in the financial services sector now is the phrase: “Name and shame list.” This phrase appears to be the “Change” or Chanj which the ruling
All Progressives Congress (APC) brought in its baggage as it strives to come to terms with the realities of running a democratic institution.” The APC which ran its 2015 election on the banner of “Change” (aka chanj) had its Presidential candidate, MR. Muhammad Buhari, returned by the electoral body as the winner of the poll. Since his inauguration as President, the APC has been fumbling and wobbling in a desperate bid to acclimatize with the task of running a normal government. Whether the APC will fumble
However, it is pertinent to state that never before has this country witnessed such a regime of clueless political leaders who seem so unprepared for action after raising high hopes on its ability to transform Nigeria to an Eldorado via the instrumentality of Chanj. In its desperation to take off with something to impress the mass of people whose hopes were raised very high it came up with this idea of a “Shame List”. The brainwave of a shame list is an offshoot of the much hyped reports that the principal officers of the new administration in Nigeria are sadists whose interest in clinching the levers of power is to bask in the euphoria of witch hunt and vindictiveness.
The Name and Shame List also casts a pall of doubt on the business suave of those who now run the Nigerian Government. A School of Thought holds the opinion that the Name and Shame List is an eloquent testimony that those who are now set to ruin?, sorry, rule Nigeria are expired politicians who do not know a thing about what goes on in the 21st century world of globalization or the global family. Or how else can one rationalize a policy which seeks to demonize borrowing from the deposit banks, even when the same government goes cap in hand soliciting for all manner of financial interventions to enable it weather through the ongoing turbulence in its new responsibilities.
We just heard that the selfsame Buhari government was recently given a loan or grant of over $2 billion for the uplift of the Boko Haram battered North East. Yet, the same government which presented its “Wish list’ (a euphemism for begging for financial aid from 1st World) to the developed countries a short while ago is asking for the head of business men who borrowed money by way of loans or overdrafts from the money markets or deposit banks. Today our political leaders are running the banks from ASO Rock.
It is pertinent to mention that this is, perhaps, not the first time for some people to come up with this unfortunate brain wave of putting the so-called “Overdraft Billionaires” to shame. The first time this antiquated and medieval move was made was when the then Governor of Central Bank, Sanusi Lamido Sanusi (SLS published the names of prominent Nigerians who owe various amounts in the banks. He labeled them “Overdraft Billionaires” and there was so much celebration among the Mafiosi group . As sadists, people from some sections of this country derive joy in subjecting others to ridicule and shame even when the need does not arise.
The pertinent question is: When did it become a criminal offence for people to seek financial assistance in the forms of loans, overdrafts and the like from the banks? Do people know that borrowing is the most lucrative aspect of banking? There was a time in this country when the federal government had controlling shares in the first grade banks. Acting on the orders of the then President, Chief Olusegun Obasanjo, the then Governor of Central Bank (CBN), Professor Soludo, a professor of Economics, embarked on the humungous task of privatizing and restructuring the about 89 banks in the country in a bid to relinquish federal government equity holding in these banks.
It was agreed that government is a bad businessman , thus the banks should feel free to run the banks in the best way they could without intervention from the Federal Government.. As the APEX Bank, the CBN would still play the role o regulatory body whose financial and monetary guidelines must be faithfully complied to the minutest detail. Through this process of mergers and acquisitions, the banks in the country were pruned down from 89 to 25 mega banks. Never before has such volume of mergers and acquisitions being successfully carried out in any part of the world in a record time limit of 18 months. But Professor Soludo who hails from the South East State of Anambra actualized it and this was the end of bank collapse in Nigeria. It is sad that rather than improve on what the Obasanjo /Soludo efforts (Obasanjonomics & Soludonomics) achieved, some misguided people are taking us back to the age of voodoo banking.
Today, bank depositors are afraid to approach their banks for financial intervention for the reason that the Damocles Sword of ASO Rock Villa oscillates over their heads. Is this the CHANJ the APC promised? However, a people must get the type of government or leader they deserve. When a country engages in reverse gear and recalls a septuagenarian coupist who ruled or ruined them in 1983-1985(over 30 years ago) to take over the levers of power in 2015, what do you expect from such an analogue leader in a digital world. Nigerians asked for chanj; now that the chanj has come, we must tread softly .The American warns: “Be wary of what you ask because you may get it.”: We ‘aint seen anything yet”. At home, the Mbaise man says:”Onwebe ihe ihuru ge na kpokisi”. Please ask the Mbaise man close to you to translate it.
In fact, I have been trying to give myself some soft landing to drop my main message. So far, I have been doing the preambles to this discussion. Now, it’s time to give a free consultancy to the managers of our economy and especially, the Chartered Institute of Bankers of Nigeria (CIBN) and the Advertising Practitioners’ Council of Nigeria(APCON).I am shocked that the two bodies have maintained a conspiracy of silence while some misguided people set out to destroy the banking sector. In a normal country, these two bodies would have issued press releases to intimate the public and the authorities on the illegality and futility of the so-called “Shame List”. Since what we have in Nigeria today is a managed democracy or even a diarchy, the CIBN and APCON advice may not be heeded but at least they would have had their say .Now this is my lecture to the FGN,CIBN and APCON and the banks .
The SHAME LIST is a primitive, antiquated
approach to modern banking and those
who get involved will bear the full
consequences of their idiocy
Advice to FGN & CIBN: The federal government should withdraw from the ongoing embarrassment of innocent businessmen who entered into legitimate business pacts with their bankers. There is a need to state that the FGN is at liberty to nationalize the banks or apply to hold golden shares in such banks, if it so deems fit. It can easily actualize this nationalization or golden shares through the National Assembly. Until such nationalization or golden shares are in place, it is not the duty of ASO Rock to direct the affairs of such banks from the Sanctum Sanctorum of ASO Rock.
Through the CBN monetary policy guidelines, the Federal Government can regulate the activities of the banks in such a manner that will not cause panic or pandemonium in the economy. A situation where the reputation and integrity of a cross section of Nigerians are being rubbished everyday in the papers in the so-called “Shame list” is both despicable, deplorable and repugnant to the internationally recognized professional ethics in the civilized world. It falls short of International Best Practices. It must be stopped now. It is an act of sadism for any government to operate a policy which intention is to subject innocent members of any sector of the economy, in this case the bank publics, to ridicule and shame, more so, at a time our Federal Government is all over the world begging other nations to treat the country as an ALMAJIRI who survives on mendicancy.
Advice to CIBN: The Chartered Institute of Banking ( CIBN) is a professional body which ensures that professional excellence is enthroned in the banking industry in Nigeria. It should not watch while the political class try to rubbish the great professional ethics of the banking profession- an industry that has existed for over 100 years in Nigeria. The CIBN should seek audience with the political leaders in order to give them a lecture on the role of professionalism in the banking sector. Politicians are very greedy and full of hate; they are not in a position to teach bankers who are technocrats the best ways to run the banking sector.
If anything, genuine investors will be scared to invest in an environment that glorifies the so-called “Name and Shame” platform. It is primitive, primordial and driven by hate and vendetta. The CIBN must insist that this obnoxious practice is stopped now. It shall be the task of the Cibn to jealously guard , preserve and positively project on the noble profession of banking which is based on the principle of “Trust and Honesty”. The CIBN must assert its relevance now or never.
ADVICE TO APCON: The Advertising Practitioners Council of Nigeria (APCON) was established by the Advertising Practitioners Act No. 55 of 1988, as amended by Act No. 93 of 1992 and Act No. 116 of 1993 (now Advertising Practitioners Registration Act Cap A7 of 2004). The adoption of a broad national mass communication policy by the National Council of Ministers in January 1988 was a milestone in the establishment of the Advertising Practitioners Council of Nigeria (APCON). The various discussions that followed the adoption of the national mass communication policy articulated the relevance and the leadership role of advertising to the nation’s social, political and economic development as well as the need for official recognition and regulation of the practice.
APCON is the regulatory agency in the Advertising Profession .It should not watch idly while the best traditions of advertising are bastardized and ridiculed. The APCON must ensure that all materials for placement in the media are screened and approved by Registered Professionals in Advertising (RPAs).There is a decided case in the court which demands that all advertisement in newspapers must be approved by members of APCON. The Nigerian Publishers Association of Nigeria(NPAN) appealed the case. The APCON must go back to the its roots to ensure that the Federal Government is educated to know that there are laid down principles of advertising and those principles must not be undermined. The APCON must work in synergy with the Central Bank and the CIBN to restore normalcy to the banking profession and the advertising industry.
ADVICE TO THE BANKS: We all know that Banking is an honourable professional and what happens between an account holder and his banker is guided by the principle of confidentiality. It is secret - if that is what you want to hear. A third party should not know what transpires between a banker and his customer, not even a wife or a husband should have access to the details of the account of each order , unless it is a joint account or there is an express authorization to that effect. It’s like asking a medical doctor to publish the details of his patient’s medical condition on the grounds that such a patient is unable to settle his bills. In the same manner, a Reverend Father should announce the sins confessed to him by a faithful on the grounds that such a faithful is owing the Church. Are these moves rational and reasonable? If not, why subject bank customers to such selective punishment and trauma?
A good banker knows that lending is a very important aspect of banking. It is the most lucrative aspect of banking and the riskiest aspect also. Bank lending is guided by the aide memoir: “PAPERCHAMPS”. This aide memoire reminds the banker that there are some basic guidelines in deciding to lend money to a customer. They include(1)period of repayment;(2) amount of loan/overdraft;(3)exchange rate content;(4)character and integrity of the borrower and (5) security -often described as collateral security. These requirements are embedded in the aide memoire-PAPERCHAMPS.
When applicable, the banker does a cash flow and balance sheet analyses to guide him. Often the security may be a legal or equitable mortgage over property. It can be a floating charge over the assets of the borrowing customer. In fact, the most important factor in lending is not the security provided, hence the security comes last in the PAPERCHAMPS. This shows that in lending, there is no substitute to character and integrity of the borrower. No quantity of security can redress the disadvantages of lending money to a known fraudster or criminal. Professional bankers know what I am saying ;there is no need to over flog it since we are not in the classroom.
If a borrower defaults, bankers know how to go about it. They don’t need to subject such a borrower to shame or ridicule. In a worst case scenario, the bank can go to court to seek order of court to realize the securities held in its possession. A bank does not need ASO ROCK to tell it what to do when faced with sticky lending or a bad loan. We all know what to do. Sometimes, a banker can even help to turnaround the sagging business through professional advice or even via injection of further funds. Bankers do not need to drag a borrower to the Buhari’s Shame List. It is an abnormality and banks must kick against this Shame List; it’s is an anathema; it seeks to demonize borrowing. It appears to be a subtle way of forcing the business class to patronize the ISLAM, IC BANKING SCHEME. This is my observation.
We must guard against those who are subtly undermining conventional banking in order to give leverage to ISLAMIC BANKING- where they say they don’t charge interest. Our businessmen must be vigilant in order to see through the veneer of the subterfuge of Muslim fundamentalists who hide under the canopy of the SHAME LIST to introduce Shariah Banking.
Banks must also consider the cost implications of publishing false details in the SHAME LIST. It is a defamation /libel to publish a person’s name as a debtor even when there is no cogent and verifiable evidence to support such a claim. Such an affected person is free to sue and claim damages which could run into a humungous amount. Banks should distance themselves from the SHAME LIST. This is not the Change/ CHANJ they voted for.
The SHAME LIST is a primitive and antiquated approach to modern banking and those who get involved in it will bear the full consequences of their idiocy when aggrieved individuals storm the Temple of Justice to seek compensation and costs in regard to reputations that are tarnished and sullied by such false and toxic publications. To be forewarned is to be forearmed, In advising both the CIBN and the APCON,I speak as an insider- a member of both bodies. So, I am speaking from an informed mind.