By Dele Sobowale

“The Central Bank of Nigeria, (CBN) has recently directed all banks in Nigeria to periodically publish, in at least three national dailies, names of their delinquent debtors, whose accounts remain non-performing.” DIAMOND BANK PLC, Punch, June 22, 2015, p 39.

Permit me to mention that VANGUARD is one of four newspapers which can truly be called “national papers”. The rest, including three published in Lagos, are mere pretenders. So, the banks know where to go when they are ready to publish the names of the national dead beats. Readers should rest assured that a lot of names and reputations of business “moguls” will be tarnished for ever. However, before going into the finer details of this CBN directive, let me digress by pointing to another CBN directive whose terminal date is drawing close.

CBN Governor, Mr Godwin Emefiele

The Biometric Verification Number, BVN, exercise will end this month. From July 1, 2015, anybody without a BVN will not be permitted to operate his/her account in any bank. Unlike the customer number issued to customers by every bank, the BVN is applicable nationwide.

Apart from helping to identify customers more easily, the BVN will serve another function which many people, especially fraudulent individuals, are not aware of; it will help to uncover those operating several accounts under various identities.

The finger prints collected will be put through computer matching process and very soon thousands on Nigerians and foreigners residing here, who had escaped the law will find themselves exposed. Millions of accounts will be affected eventually. Some of your neighbours might soon be visiting the nearest EFCC office to explain how the same person can be John Doe and Sam Bird. Interesting times await us.

However, the one that will create the greatest disaster, at least temporarily, is the directive about delinquent accounts. Thousands of companies operated by Nigeria’s big business people are heading for crash on account of this. For instance, on the same day, in the same paper, on page 68, there was a Police Bulletin regarding one Stella Dike Ozoemene, who defrauded Guaranty Trust Bank Plc of N150 million using Ohzed Oil and Gas Company as the conduit.

Yet on the same page, a Lagos State High Court attached the accounts of an oil marketing and distribution company, Nitrend Limited over N150 million debt.  This time Access Bank was the victim. These two cases might be the first in a series of desperate actions by banks which had treated their non-performing debtors with kid gloves — especially when the debtors are well-connected.

Perhaps, it is just a coincidence that these cases are coming out in the open at this time. But, it is doubtful. Apart from the amounts involved being the same, the guarantor to the Nitrend Limited loan was also a female former Managing Director of defunct City Express Bank, which went down with millions of depositors’ funds.

If indeed, Access Bank and Guaranty Trust have diligently applied the basic principle of Know Your Customer, it is difficult to imagine how the damages could have occurred.   Now they are now chasing money which should not have left the bank in the first instance. Heads will, and must roll, in the banks for these.

However, the two cases merely reveal a tip of the nose of the submerged monster waiting to send shock waves through the Nigerian economy. Last year, the CBN Governor revealed that less than one thousand Nigerian firms account for over seventy per cent of all bank loans; the remaining one million-plus companies make do with the little that is left.

Left unsaid by the CBN Governor, either deliberately or inadvertently, is the fact that virtually all these companies operate multiple accounts with many banks and the main function of their directors of finance is to juggle funds from one bank to the next; to allow some accounts to become delinquent until pressed by the banks and to delay payments as long as possible.

A look at the list of toxic loans, acquired by Asset Management Corporation of Nigeria, AMCON, will reveal that it might as well be published as a WHO IS WHO AMONG NIGERIAN BILLIONAIRES. The “professional” dead-beats are all the people we routinely applaud. The list of delinquent accounts and the names of their directors will  include almost all the “usual suspects” – who are uniformly incorrigible debtors.

The CBN directive will however result in very painful re-adjustments – at least in the short term. Most of these companies have operated on the principle of not allowing the left hand to know what is happening on the right hand. Each bank had guarded jealously its transactions with the biggest customers. That is precisely what the dubious business people want. Until a loan goes terribly bad, and it is large enough, most banks will not disclose to other banks their experience with the customer. That way, the same customer can dupe several banks at the same time.

With the new CBN directive, “professional” delinquent customers will be revealed for all to know; they will not be able to access foreign exchange and the banks will take steps to recover their loans. Several thousand companies might be liquidated in a short time exacerbating the nation’s unemployment problem. But, it is task that must be done sooner or later. It might as well be now.