CHAIRMAN of the Economic and Financial Crimes Commission, EFCC Mrs. Farida Waziri appears to see the hunt for bank chiefs as an opportunity to impress those who rate the EFCC dead.

She has promised to recover the debts owed the banks in one week and threatened to detain those who fail to pay. Her threats leave many wondering where the EFCC was all this while and whether her enthusiasm matches the rules, under which banks gave their clients the loans.

Many things are wrong with the banks. Anyone who sets out to reform banks must operate from a higher pedestal than the seeming fumbling involving the Central Bank of Nigeria, CBN, in the past two weeks.

Is it true the CBN did not give the affected banks a chance to react to the special examination on which it acted? The CBN in a bid to score a major point mixed up names of bank’s debtors. How could the CBN use accounts of 31 May 2009 to pass judgment on 14 August 2009? It is now asking bank debtors to reconcile their accounts after throwing the banking sector into a deeper morass than the one it set out to solve.

Whatever credibility the exercise earned is withering under the counter claims from the debtors. Some have disputed the figures published, others have stated with proof that they have paid off their loans. Does the CBN remember it approved the 2008 accounts of one of the five banks four weeks ago? Were the non-performing accounts not in the accounts the CBN approved then?

It would be interesting to see how Waziri tackles her new assignment, which could be interpreted to be her response to the assessment of Mrs. Hilary Clinton, US Secretary of State that the EFCC was not doing well. Mrs. Waziri would also have to recover the N70 billion the Petroleum Products Prices Regulatory Agency,  PPPRA, is alleged to owe some of the importers some of whose firms are now categorised as loan defaulters. Some of the money has been due since last December.

Does Mrs. Waziri mean the debtors have to discharge obligations that are due in the next one week or pay back the entire loans?

The CBN has a great opportunity to reform the banks. However the haste in punishing some banks without concluding the special examinations of all the banks and the denial of the affected banks the right to respond to the allegations could diminish a great effort at strengthening the banks.

In the past two weeks, the CBN has shown it was unprepared for issues the sanction of the five banks raised. While battling with restoring confidence in the entire banking sector, the CBN could unwittingly worsen the situation by heavy publicity it weaves around allegations that bear out the criminality that permeates the banking industry.

Nevertheless Mrs. Waziri should please note, that these infractions passed through the supervisory  wizardry of the CBN and National Deposit Insurance Corporation, NDIC. The promised cleansing of banks cannot succeed without punishing collaborators in CBN and NDIC.


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