Banks and new employees - The Nation

By The Citizen

The introduction of background checks on all employees long overdue

Penultimate week, the Central Bank of Nigeria (CBN), demurred to the representations made by banks during the CBN/Banks Human Resources Forum of December 2013,  by modifying its extant circular of July 16, 2004, mandating banks and discount houses to obtain prior approval before engaging prospective staff.

In its circular dated February 5, a new employee may now assume duty prior to obtaining the apex bank's approval - in a situation where this proves difficult or impractical.

The proviso here is that the employing bank is mandated to submit the employee's Curriculum Vitae and other relevant information within 30 days of assumption of duty to the apex bank for necessary clearance. Also, the bank or discount house, is mandated to include in the employment letter, that the 'offer is subject to the receipt of satisfactory responses on any background checks or other inquiries on the employee from relevant authorities'.

As would be expected, the amendments exclude new employees on the grade of Assistant General Manager and above. For this category of staff, the banks are still required to continue to obtain the prior written approval of the CBN before they can assume duty. According to the CBN, the idea is 'to prevent the recycling, within the banking industry, of erstwhile bank employees indicted, terminated or dismissed for fraud and other acts of dishonesty'.

If only for the fact that the apex bank and the banks appear to be on the same page on the matter, we consider it a positive development. After all, the banks have in the nearly 10 years borne the brunt of the provisions of the extant circular; enough time for them to provide the apex bank authorities with necessary feedback about the challenges that they have had to put up with in the course of their recruitment exercises. As for the CBN, we understand that its role as the guardian of the industry has increasingly meant that it kept the tabs on the records of operators in the industry to minimise cases of moral hazards.

Now that both have found a meeting point on the issue, it is also our understanding that the banks have accepted the responsibility to ensure that the new window afforded them is not abused in any way. In this, we understand where the CBN is coming from: the need to ensure that the individuals whose activities have helped in no small measure to bring the industry to ruin are not allowed into the industry through the back door.

The point remains however that the July 16, 2004 circular and, by extension, the February 5, 2014 amendment are both reflective of the state of record-keeping in the industry. It is unfortunate that the financial services industry has not thought it fit to maintain a centralised, biometric database of employees over the years. Had the industry done so, it seems unlikely that the two circulars would have been anything but pointless and superfluous. It would have rendered pre-employment screening mere routine. Perhaps the time to begin the process is now.

How to ensure that only those worthy of trust are availed employment opportunities is of course the issue.  Proper background checks on prospective employees are no doubt important, at least as far as reducing the possibility of offering bank jobs to characters with shady past. The issue is whether the requirement offers any real guarantees that such characters would still not manage to beat the system.

Be that as it may, there is no question that the February 5 circular from the CBN is overdue.