BY VICTOR AHIUMA-YOUNG

COMRADE Sunday Olusoji Salako, is the President of the Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSBIFI, umbrella body for senior workers in the nation’s financial sector.  It is a body of bank senior workers who have access to facts and figures in the banking sector of the Nigerian economy. In this interview with Financial Vanguard, he examines the tenure of the Central Bank of Nigeria, CBN- appointed management of the rescued banks, Mallam Sanusi Lamido Sanusi as the Governor of CBN, among others.

Excerpts

The two-year tenure of the CBN-appointed management in the eight rescued banks will end in less than two months. How will you assess their performance as against those replaced?

Well, if we take the issue generally, we will tell you that we are not seeing much difference and significant departure from what it used to be. It is like you accused some people of stealing, you call them thieves and removed them. You thereafter brought people who are not better than those you accused or removed from office. What we are saying is that we have not seen any significant difference from the lifestyle of those who left and those who are there. If you look at them on individual basis, there are some of them who are modest and have been very hard-working. But we are talking of management of the rescued banks generally, if you seriously assess them, you will give them a very low mark. We have said before in some of our comments, that when they leave, some of them are going to be investigated and you will see that a lot of things will be uncovered and some may be sent to jail.

Salako...But one thing is clear; some of his comments have been unguarded.

Similarly, how do you assess the tenure of Mallam Sanusi Lamido Sanusi as the Governor of CBN since he assumed office?

For us, we do not have problem with him as a person, we believe that management is a continuum.  There is an African proverb that says the village deity is constant, it is the people that carry the deity or oracle that change. In as much as he is trying to put up a very good reform that all of us believe is very desirable, we do not have problem with him. But one thing is clear; some of his comments have been unguarded. It is like you are building a house and you are telling your enemies to come and destroy it. Telling them, ‘I installed bullet-proof window here, I put bullet-proof door there and this and that. You are already exposing and opening your flanks for enemies to invade. For us, somebody who is a regulator, should be seen more and heard less.

You do not make comments that will aggravate or overheat the system. Like I will take over or liquidate all these banks if they do not meet their recapitalisation by this time and so on. We are saying he is stampeding these banks into taking hasty actions so that cronies of government, political patrons will buy them at peanuts.  We are saying that is wrong. Why did you invest tax payers’ money in a system and at the end of it, you do not have the patience to see that reform process through? He takes a lot of hasty decisions.

Now we have a lot of problems with our clients’ base. A lot of customers of these banks are becoming very apprehensive. They are asking questions, what is going to happen? What do we do and so on? These banks are healthy. For instance, Intercontinental has returned to profitability, so also has Oceanic Bank. Union Bank just announced that it achieved about N189 billion profit-after-tax (PAT).

This is a very significant development. We are not surprised because some of their toxic assets have been taken over by Asset Management Company of Nigeria (AMCON). That has given them a lot of leverages and has made them to be able to clean up their books. We believe that is a very good development. Again, any reform that is targeted at reducing jobs is not a good reform, especially in Africa.

Government is campaigning for job creation, but agencies of government and institutions of government are on the other hand, implementing policies that are killing jobs. That is dangerous and must be stopped.

What is your response to those who have argued that the present management of CBN has implemented policies that have led to the highest number of job losses in the banking sector in the past ten years?

It is a fact that cannot be disputed. Do you know that up till now, even the so-called healthy banks are rationalising? Rationalisation has become an everyday affair in all our banking institutions. They do it under many covers.  It can be done under disciplinary measure, voluntary retirement and other various excuses. That is why we have argued that much as the reform is desirable, it is being badly implemented because it is as if it is targeted at the innocent workers in the banking industry. We have asked, are these innocent workers who created or are creating problems in the banks? They are not. So, why should they pay the price for crime of the bourgeoisies and privileged few?

What do you make out of a recent statement credited to the governor that he would not interfere in the remuneration of the rescued banks’ executives in spite of public outcry?

We are not surprised, he appointed these people and before he appointed them, he must have one or two dealings with them because ordinarily, you do not appoint people you do not know. The person should be known to you directly or otherwise. At least, some other means of acquaintance must have been done; there must be some sort of introduction that must have been done.

He appointed these people and so, we know he would want to protect them as long as they are there because we have never seen the regulator blaming any one of them. He is always supporting the management irrespective of public outcry. The obvious explanation is that he appointed them to do a hatchet man’s job. So, whatever they do, he does not care. After all, many of them are still enjoying the previous management perks of office.

CBN has given a September deadline to the rescued banks to either recapitalise or get liquidated. What are the likely implications should the governor go ahead and liquidate these banks?

We will not even allow it to get to the level of liquidation because that will be very devastating to the economy. It will ruin the Nigerian economy. Look at the balance sheets of all the affected banks, if you take them out of the system, it will have a very reverberating effect on the economy, if it will not grind it to a total halt. We will not even allow that to happen.

If you recall, recently, a court said the regulator has no power to sack those managements without allowing them the opportunity to defend themselves. If you also recall, immediately after those managements were sacked, we held a briefing where we said the action of the regulator was too hasty.  Much as we do not subscribe to recklessness on the part of our corporate managers, we also believe that due process must be followed in anything we do and that is why we quarrel with managements.

The court ruling is a serious minus for Sanusi. Stakeholders will mobilise to the extent that is allowed under the ambit of the law to ensure that the governor does not exercise that power. He cannot sit down in the comfort of his house and throw the nation and the economy into chaos. How many of his family members are working in the industry? They are either in one big multinational corporation or living abroad. So, he will not know the pains of people just waking up and losing their jobs in thousands. We are having a lot of social vices because of policies that destroy jobs.

So, why should we allow somebody who will not consider the environmental implications of actions before taking such actions? You will just travel overseas and talk without comparing the environments there in the advanced countries with the one you have back home. Leaders who are hypocrites will always want to compare Nigerian environment with advanced countries. The environment is not the same thing. Today, how many of our industries are working? Power is still very epileptic and many factories that are struggling to stay afloat rely on generators and the diesel to power the generators has become so expensive. Yet, somebody is talking about liquidating eight banks so that the economy will crumble. It is better we mortgaged ourselves to the white men to come and manage.

How do you react to the controversy trailing the regulator’s licensing of an Islamic bank in a multi-religious economy and what are the likely implications?

Like you said, it is a very controversial issue and if we begin to react, you may be inflaming passion. We have been very careful to comment on the issue. The first question to ask is, the ones you have, are you managing them properly? We believe that having several universities, colleges of education and polytechnics will solve our problems in education, but some have argued that if we have 50 that are well-equipped and well- funded, may be some of the problems in the educational sector will be solved.

We are only relating that to what is happening in our banking sector. We were having about 89 banks before Professor Charles Soludo came with his recapitalisation and reforms agenda. At the end, the banks were reduced to 25 with the hope that they would be manageable and some of them would become super banks. Along the line, because they were partying with them, they allowed the cowboys to take over the system and they started unleashing terror, and the regulators were looking elsewhere and that is why we are here today.

Now, you are trying to resolve one and you are bringing another concept. We will want to ask, who and who will work in these banks (Islamic banks) because it is an Islamic concept? Are they going to be purely Muslims? If they are, that will also be discriminatory because the constitution does not allow that. It is not a religious thing that you will say only Muslims or Christians will worship there. If it is a worship centre, we will have no problem. But something that will affect the fabric of our society, they will have to be very careful. Again, who will benefit from the bank? If I am Christian, can I apply for a loan in an Islamic bank and be given? If you look at it economically, you will say yes, you will be able to assess funds without interest.

Everybody like cheap things, but will I have the opportunity as a Christian or as a traditionalist to get funds from the bank? These are some of the questions that we need to ask. Another thing is that, those who will work in the banks will they cut across all the three major religions? Or are workers going to be purely Muslims because they have to know the tenets of Islam? Would that not be discriminatory?

There are lots of issues this policy will throw up. For us as organised labour, if they create any enterprise that will create more jobs, we will welcome it because it will increase our membership. But we have to be very careful so that we do not begin to have religious crisis even in industrial sector. For now, we have not been having it and we do not think it is right for somebody to introduce measures that will create that. The moment you have that in labour, then there will a big problem for the country.

It will definitely throw up a serious crisis as people will be speaking on religious basis instead of one voice as labour is known for. Before you know it, you begin to see workers of Islamic banks group. So, there are lots of implications. The more you analyse the issue, the more questions will come up. So, that is why we want to caution CBN to tread softly on some of these issues.

What about the soon to be introduced cash withdrawal limit?

Like we said earlier, the man is so much in a hurry. He is like somebody who has a covenant with time and he wants to get away or conclude it and leave. Some of these issues are desirable, but they have to be implemented in stages. For instance, the issue of making our environment cashless is desirable. But you have to look at the environment. What is the level of development? In the rural areas for instance, how will the man who is not educated be able to transact business with electronics payment system?

There is no stable power supply, so even if you have ATM facilities in the rural areas, how will they power them?  Instead of saying N150,000, you can say any transaction above N2million or thereabout, and so, so, so and so time, we will ensure that they will have to pay through electronic device or paper product, that would have been all right. If you want it to be a fiat and it is something that has to be immediate, it does not have to be as low as N150,000.

Many of our big time traders in the villages, farmers and even traders who transact businesses and things like that, are very rich. They bank their money and they do not transact their businesses through cheques. Even in the urban centres, there is a social crisis of confidence on the use of cheques. We know it is criminal to use dud cheques, but how many people have been prosecuted?

What victims of dud cheques do in most cases is that they apply other means to get cash value for their money. This is because if they begin to wait for legal processes, the man may take advantage of the process and do other things like absconding and you will be left empty.  So, because of crisis of confidence about use of cheques and with the crisis we have in the banking sector and now that people are trying to build up their confidence, with the cash withdrawal limit, there will be a lot of problems. There is nothing wrong in making people not to carry cash around. That is fine, but you have to do it in stages and tailor what you want to copy from abroad to meet the needs of our environment.

The withdrawal limit policy when implemented, do you think it will discourage savings?

Of course, you can be sure that savings will be eroded. It will massively affect savings deposit because a lot of rich people are in current accounts and fixed deposits. The money that the banks rely on is the savings because that is the one the average people and lower cadre, petty traders and the likes, engage in. When the banks put this money together, they get huge deposits that they rely on.

A rich man can issue one cheque worth millions and say he has transacted business and that you must pay. In fact, it is from the savings that the banks assess their credit performance and ratio. There is no question about it, it will definitely affect savings in no small measure. The moment you tell a Nigerian outside the urban centre that he cannot withdraw more than N150,000, he will go back home and will not go back to the bank again, but will start keeping his money at home despite inherent risks. We want to ask, what is the population of Nigerians that is bankable?

How many bankable Nigerians are banking? When we should be evolving policies to ensure that more Nigerians embrace banking, we are introducing a policy that will reduce those already in the system. Many people are banking out of necessity. For example, in schools, students know that they do not have to come home every time and get money from parents and wards. That is why you see that it is automatic for students especially in the higher institutions and again, maybe retirees who need it for payment of their pensions instead of queuing.