WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2010-08-02 Time: 12:00:01 Posted By: News Poster
By Rotimi Durojaiye And Kingsley Ighomwenghian
Benin – Beating his chest, Central Bank of Nigeria (CBN) Governor, Lamido Sanusi, announced on Thursday that the economy is now in better shape, and the financial system safer and more stable than it was a year ago, on the back of the second reform that checked the recklessness by bank chiefs.
Sanusi told a workshop for business editors and finance correspondents in Benin that most of the sacked Managing Directors (MDs) of banks committed criminal theft, for which they will be prosecuted.
“It is wrong for you to be the MD of a bank and steal depositors’ funds, (but) it is wrong for you to say because you don’t want a credit crunch, you will not do anything.
He also gave an assurance that CBN officials found guilty of neglect will not be spared in the clean up.
“There would be issues with CBN officials, if I have documented evidence,” he warned.
Part of the four pillars of the ongoing reforms, Sanusi said, is the entrenchment of good corporate governance in the CBN itself, while killing the culture of “eye-service to institutionalise leadership and build confidence.”
He lamented the massive fraud and insider related credits in some banks, where an MD sets up a company without telling the board that it belongs to him and then approves loans for it without the intention of repaying.
Oftentimes, he noted, such loans are disguised using Commercial Papers and Bankers’ Acceptances, which are sold to discount houses before the arrival of bank examiners, hence the decision of the CBN to temporarily suspend both instruments on his assumption of office.
Sanusi narrated that after the sack of some bank MDs last year, measures were taken to stablise the institutions with the N620 billion facility granted 10 banks, all of which have been meeting their obligations so far.
Since the CBN published the debtors’ list, a total N300 billion bad loans have been recovered.
Some banks were found to have used the names of individuals and institutions to collect loans when such individuals were not their customers.
Before the banks audits were conducted, Sanusi recalled, the rot in them was never envisaged and was initially thought to be cases of margin lending to the stock market and the oil sector operators.
“The things we saw could only have been done by those who believed nobody will ever find out,” because they were going to run their institutions for life, he disclosed.
However, the evidence these days of economic and financial stability include the drop in inflation rate from 16 per cent in June last year to 10 per cent, and the return of trust among banks as shown in the stable inter-bank rates.
This, he added, is beside closing the gap between the official exchange and black market rates from N145 to the Dollar and N180 to the Dollar in June last year, as well as a 30 per cent growth in stock market index between January and June this year.
Part of the measures being considered in the long run to stop the incestuous relationship in the financial system is to ensure that banks will not own share registrars.
Their ownership of such subsidiaries in the past resulted in situations where one bank purchased 88 per cent of its own shares at the initial public offering, while the MD of another owned 40 per cent of the shares financed by a special purpose vehicle.
Sanusi also cited a bank which used depositors’ funds to purchase its own shares at N22 each, after which the value dropped to N3 each, wiping off N144 billion of depositors’ funds.
Another bank lost N120 billion the same way.
Original date published: 29 July 2010
Source: http://allafrica.com/stories/201008020253.html?viewall=1