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Registrar/Chief Executive, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka  says  it is possible for bank customers to safeguard their money in a bank against distress and he explains how this can be achieved.

Be careful with banks that regularly have issues to settle with the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation. They may not be practicing banking in accordance with statutory and regulatory guidelines.

Be careful with banks that are always dragged to the Bankers’ Committee Sub-Committee on Ethics and Professionalism by its customers, other banks, its employees and the regulatory authorities. All such complaints may not be for nothing.

Be very careful with banks that do not adhere, on consistent basis, to ethical and professional standards. Such banks do not concern themselves with the security/safety of their customers’ deposits. They are the ones that readily get involved in all sorts of malpractice and manipulations. They may seem to do well but the bubble may burst anytime.

Be careful with a bank where the Board and top management personnel are frequently being tinkered with or completely changed. This may be evidence of problems. It is doubtful whethersuch an institution will have good focus and strategies necessary for successful banking.

Be careful with any bank whose employees peddle disparaging information against other banks in order to convince you to abandon your bank for theirs. In the same way, they can use information about you for their selfish ends. They are unethical and unprofessional. Their bank cannot endure in the long term.

Be careful with your bank transaction instruments, for example, your cheque books. If they are carelessly kept, they can be used by fraudsters to perpetrate frauds at the detriment of the health of your bank. Therefore, you must keep, in a safe and secure place, the instruments with which you conduct your banking transactions.|

Be careful not to delay or postpone taking action you ought to when the need arises. Procrastination is dangerous and many a time, costly in risk management.

In conclusion, despite the activities of the regulatory and supervisory authorities (CBN/NDIC) in the banking system, bank distress has not stopped, and in all honesty will not stop. Even in advanced countries where more sophisticated regulatory and supervisory activities are ongoing, banks have continued to be distressed and liquidated.

The depositors that wholly consign the safety of their money in banks to the regulators and supervisors will continue to suffer loss whenever distress bears its fangs.

Quite unexpectedly, the government does not altogether regard bank distress as a bad thing. According to Ekpenyong {1994) government thinks that it is conscious of the moral hazards that if no bank is allowed to fail, depositors would not have to take into account the soundness of a bank before deciding where to place their funds. And this justifies the government’s protection of small depositors alone via a deposit insurance scheme.


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