By Omoh Gabriel
Last week’s storming of two banks premises by operatives of the Economic and Financial Crimes Commission, has left in its trail a bitter and sour taste in Nigeria’s financial system. While no Nigerian living or dead would oppose the desire of the present administration to clean up the political arena and rid the nation of corrupt practices, the way and manner the EFCC operatives are going about it especially as it concerns banks, can trigger a financial distress that the government cannot handle.
The financial sector of the Nigerian economy is the only sector that is vibrant for now. Endangering it would mean pushing the economy further down the recession slope. Banks have access to public funds only when they are placed by public officers. If any bank executive compromises his position, he should be shown the way out and face the law in such a way that would not jeopardize the financial stability of the country.
Banking licence, as Lamido Sanusi Lamido, former CBN Governor now the Emir of Kano, would always insist, is held in trust. The public put their money in the system because they have confidence in the banking system with the assurance that they will get back their money at any time they require it. But a run in one bank can cause a systemic distress that can ruin the entire economy.
This is what the EFCC operatives should learn and ensure that in investigating a bank, it is done with utmost care. Last week’s storming of two banks without prior notice or invitation to officers concerned, is of great concern to those who know the best practices in banking.
In a statement to the Nigerian Stock Exchange (NSE), Sterling Bank and Access Bank notified the Exchange about their operations concerning the ongoing investigations by the Economic and Financial Crimes Commission (EFCC). The banks issued separate statements to the NSE about investigations into their activities by the EFCC. These statements have been made available to local and international investors by the NSE through its Website. Sterling Bank in its statement explained that officials of EFCC visited the bank on Wednesday, May 4, 2016 to investigate a banking relationship of a non-bank financial institution.
It said that it never held the account of the customer during the previous administration to which the matter had been linked either officially or otherwise. The bank also stated that the non-bank financial institution (Asset Management Company) purchased a number of loans on recourse basis from it on commercially acceptable terms. The statement said that the transactions were the concerns raised by the EFCC to Sterling Bank.
If this is the case, why would the EFCC close up the head office of the bank and barricade the street as if in search of a common criminal? Would the EFCC not have served the banking system better if they had quietly invited the bank’s managing director to their office without causing a public stir?
In a similar development, Access Bank said that the EFCC officials visited the bank on May 6, 2016 to investigate a specific transaction involving a customer of the bank in the normal course of business. The visit, according to the bank, came without any form of earlier notification or invitation to the bank. The bank said that the officials informed the bank that they were investigating some transactions and sought the bank’s cooperation.
The officials, according to the bank, met with the Group Managing Director and the Bank’s Chief Compliance Officer who provided the needed information and documents. “Thereafter, the Group Managing Director was requested to accompany them to their office to further their investigation, which he willingly acceded to. Following the resolution of the underlying issues, he was allowed to leave the commission’s office on the same day.
But Access Bank staff who witnessed the incidence said that the EFCC operatives stormed the bank in a bus which was parked at the entrance of the bank. The operatives were said to have caused a stir when they prevented both staff and customers alike from going in and coming out of the premises. It was like a seal up. The media hype that followed the visit dented the image of the banks. It was like the banks were caught on the wrong side of the law.
Such media speculation has the capacity to cause a run on the banks. It will take the banks some serious efforts to redeem their tarnished image in the eyes of local and international investors. Already, many correspondent banks to which Nigeria banks are affiliated are holding back credit lines to some of these banks believing that they are neck deep in corrupt practices.
Access Bank had to say: “We would like to state emphatically for the benefit of our stakeholders that the bank has absolutely no link, interaction or relationship whatsoever with any of the personalities stated in the media reports. As a bank, we shall continue to operate in line with the highest level of professionalism, consistently seeking best practices, and hereby wish to re-assure our esteemed stakeholders that the bank remains committed to its strategic goals and objectives.”
Curiously, the EFCC that would always issue a statement on the outcome of their visits to individuals or institutions did not give any official explanation to the visits which were done in the open. Yes, the EFCC visits banks from time to time on routine checks that are usually not reported, why were these two visits different from all others? What the EFCC operatives should know is that whatever they do has an image issue which may be positive or negative. Already, foreign governments are seeing Nigerian political class as the most corrupt in the world.
British Prime Minister only last week was heard on camera singling out two countries as “possibly the two most corrupt countries in the world. He said: “We had a very successful cabinet meeting this morning to talk about our anti-corruption summit, we’ve got the Nigerians… actually we’ve got the leaders of some fantastically corrupt countries coming to Britain. “Nigeria and Afghanistan possibly the two most corrupt countries in the world.” A spokesperson for Downing Street justifying the comment pointed out that the leaders of both Nigeria and Afghanistan have themselves spoken about the scale of their corruption problems.
It is how Nigerian leaders and law enforcement agencies present Nigeria that others will see the nation as. EFCC must not by act of omission destroy the only surviving sector of the Nigerian economy. There are certainly very good people and institutions in Nigeria. When visits are made in the open, when nothing bad is found, the EFCC should commend such institutions in the open to counter the impression that their visits always connote wrong doing. The EFCC must do what they have to do in the interest of Nigeria but with some finesse.
Comments expressed here do not reflect the opinions of Vanguard newspapers or any employee thereof.