The fall of the mighty- by Victor Oshisada

That rot exists in our banking industry is not new. It began about three decades ago. In 1983, during the electioneering campaign, the legendary leader of a welfarist political party made this revelation. "The chairman of one of the earliest giant banks in this country was at a social party in a town. It was at the dead of night. And as this Bank chairman was short of cash to splurge, he inquired if there was a branch of his Bank in that township. A positive reply was followed with the request that the branch manager of that Bank had to be fetched to the chairman's presence at the on-going social party. Whereupon, the branch manager was ordered summarily to bring certain lump sum of money from the treasury for him, the chairman, as he was in straitened circumstances. The manager tremulously complied without demur."

This incident typifies the trajectory of the rot in our banking industry. Who was the branch manager not to comply with the profligate request of his chairman? Summary dismissal could be visited on the manager. It must be borne in mind that, invariably, in most of the commercial banks, the general managers are not the custodians of the keys, particularly, to the treasuries. In that early-dawn-looting, the keeper had to be fished out to gain entry. The banking system still maintains the same paradigm, and even gets worse. That is one instance of the profligacy and the genesis of the crises in our banking system. What with the arbitrary and illegal deductions from customers' accounts, after which the balances reflect lower figures than expected, in the name of "administration costs"?

There is another instance. Commercial bank customers can bear me out in this respect. Most often, whenever customers are in a bank to cash their deposits, they are urged to exercise patience until depositors come around, for the diversion of such deposits to the withdrawing-customers. Which tacitly indicates that the branch is not in the possession of hard cash at that period. Any commercial bank worthy of its name must be prepared at any time to pay its depositors. In one of the East African countries in the 1970s, there were bank failures when customers were not paid on demand. Newspaper reports informed that applications had to be submitted by customers, specifying the date to visit the banks for the cashments of their deposits. Whenever this occurs, it presages crises in the system.

Therefore, I am not surprised about the alleged scandals in our banking system, when the MD/CEOs were removed on August 14, 2009. The alleged injection of N400 billion ($2.6 billion; £1.6 billion) into the system in respect of the five banks (Afribank, Intercontinental Bank, Finbank, Oceanic Bank and the Union Bank) has been a topic of controversy among the members of the National Assembly. Some of the general claims against the directors are:

Contributions to the collapse of the banks;
Reckless award of holiday allowances to directors, contrary to the CBN Code of Corporate Governance for Nigerian Banks;

Absence of proper records of loans and other facilities;

Cooking of books as evident in discrepancies. These claims and more led to the inevitable fall of the mighty.

If the axe did not fall on the five banks, customers who were intent upon purchasing small items for the feeding and the health care of their loved ones, could return home disappointed. When this happens, it is a breach of fiduciary relationship between a bank and the customers. It is a breach of negotiability which is conferred on bills of exchange and promissory notes. A cheque is a particular kind of bill of exchange. A bank is duty-bound to honour customers' cheques at any time. By the Bills of Exchange Act, 1882. Section 73, a cheque is a bill of exchange that is drawn on a banker payable on demand. Other definitions are as well specified under Sections 3(1) and 83(1). The relationship between a banker and a customer is primarily that between a debtor and creditor, but in addition, the banker is employed to pay sums of money at the direction of the customer. A bank must not default in its duties to the customer. There shall be economic crises, in the event. In the light of these, the Central Bank's governor, Sanusi Lamido Sanusi, took the right steps in the right directions to avoid a collapse. To a large extent, he has done well. That is the essence of change. A successor who implements the positive policies which were untouched by a predecessor is a patriot. Professor Chukwuma Soludo undertook the bold initiative of sanitising the system, via the famous consolidation. He did his best within his natural limit. Now that Sanusi Lamido Sanusi is on the saddle to further sanitise (sanusitise) the system, indicates progress. And that is the essence of change. After Sanusi's tenure, another successor may come on board to sanitise another grey area. So, there can be no end to sanitisation, because the society changes and circumstances alter. The social, economic and political milieux of today may not remain he same tomorrow. Again, there is sense in what Sanusi said earlier that he was not out to run down Soludo, as he (Sanusi) could be the target for vilifications after relinquishing office. In short, what he means is that no-one is an Angel-no man is perfect. This is why changes in leadership are desirable in different theatres of national life, including politics. No political party must claim to be entitled to govern till eternity.

According to Sanusi,
"The five banks had run up bad loans totalling N1.14 trillion", (The Guardian, August 31, 2009). Any person or group of persons who may read negative meanings into his action is the enemy of the State. Some critics talk of due process. Did the looters of the treasury consider due process when they were collecting the loans? Remember that bank chairman who looted the treasury at the dead of night! There must be reciprocity from both sides. Now, billions of Naira are reportedly returned, well-indicating that if impromptu actions were not taken against the alleged debtors, there might not be re-funds-most of them could have resorted to subterfuge by absconding abroad or setting bank-buildings on fire, as it is customary in this country.

In my opinion, the search-light must be turned on three parties. These are, the affected banks' hands and minds, the CBN Supervision Department, and the auditors. Auditors ought to perform without shying away from submitting wholesome reports. Most of them fear the loss of future patronage. Corruption is pandemic. The government must buck the trend. And it must not be handled with kid-gloves. Apart from the retrieval of the ill-gotten wealth from corrupt Nigerians, the ultimate solution is public execution by firing squad, like it is done in the Eastern World. By the time six eminent Nigerians are publicly executed, others shall control their acquisitive instincts and corruption. I am not the first to suggest this measure. I am merely echoing the voice of others before me. The kernel of the issue is that corruption is malignant, and as such, it requires ruthlessness for its minimisation, if not total eradication. International outcry is indulgent to this drastic measure. However, it ought to be borne in mind that the state of affairs in these countries of the Western World, is not the same as obtains in Nigeria where the graph of corruption, if plotted, is always on the rise. There, their society is purged of corruption to the barest minimum. Any measure designed, apart from public execution, is merely cosmetic, palliative, but not curative.

Corruption was alien to African culture. Strange to relate, the Western countries introduced the vice of corruption to Africa in the era of slavery and slave trade. The slave masters resorted to bribing the traditional rulers of the time with assorted exotic gifts like looking-glasses (mirrors), ostrich feathers, umbrellas, cowries, beads, et cetera. That was how the seed of the social ill was planted, germinated and began to grow for centuries unstunted. Ironically, the Western countries may not wish us to exercise our sovereignty in this way, because corrupt practices benefit them. Blood is thicker than water. As long as the country remains in this murky water, so much the better for the western nations - any ruthless measure is bound to be resisted.