Bank crisis: FG pumps $2bn into economy - From excess crude reserves - As CBN debunks meeting with b
Category: Frauds & Scandals
The National Economic Council (NEC), on Tuesday, approved that $2 billion, about (N300 billion), be released from the excess crude money into the economy to tackle liquidity crisis, which arose from the inability of the commercial banks to lend enough money since the banking reform began.
The excess crude money belongs to the three tiers of government and the approval gave legal backing to an earlier directive by President Umaru Yar’Adua to the finance minister to release the money.
Briefing State House reporters after the NEC meeting, Minister of National Planning, Dr. Shamsudeen Usman, said the NEC gave the approval for the release of the money which would be shared by the three tiers of government next week.
He said the president was worried that since the reform began, commercial banks were finding it difficult to lend money to loan seekers and that the situation was creating a squeeze in the economy.
The NEC team that briefed reporters was led by Imo State governor, Chief Ikedi Ohakim. The council also commended President Yar’Adua for the success so far recorded in the implementation of the amnesty package for Niger Delta militants and assured the Federal Government of its support in the implementation of the remaining stages of the amnesty.
Dr. Usman also disclosed that a draft copy of the Vision 2020 document was presented to the NEC, adding that it would be given to the Federal Executive Council next week for approval.
Another matter discussed by the council, chaired by Vice President Goodluck Jonathan, was complaints from some state governors about deductions from their statutory allocations for the repayment of the Paris Club debt.
According to the minister, satisfactory explanations were given to the affected governors on the deductions. Meanwhile, the arraignment of the three bank chiefs removed from office last Friday may not come soon.
The managing directors of Spring Bank, Bank PHB and Equitorial Bank were sacked on Friday last week. According to the Central Bank of Nigeria (CBN) Head of Corporate Affairs, Mr. Mohammed Abdullahi, the apex bank was yet to report any of the sacked bank CEOs based on the latest audit report to the Economic and Financial Crimes Commission (EFCC), adding that CBN as a regulatory agency, had a working relationship with EFCC and other law enforcement agencies and issues of such nature were treated in the normal way.
Abdullahi explained that if the CBN suspected serious infractions in any of the banks, it would provide information to the appropriate authorities to investigate and possibly prosecute the suspects.
He denied insinuations that CBN was treating the outcome of the recent examination differently from the one carried out in August, which saw five bank chiefs losing their positions.
He explained that all the banks in the country were treated the same way, adding that the same criteria were employed for the special examination in all the banks. “These criteria were: liquidity, capital adequacy, and corporate governance. The only difference is that the examiners found different things in the 24 banks, necessitating different actions.“
Abdullahi could not really state whether the apex bank would publish the names of the bad debtors of the newly affected banks, stating that the CBN was concerned about helping all the five new banks with capital adequacy issues in their loan recovery efforts, just as it did with the first five.
On why certain managing directors of certain banks were not removed despite widespread suspicions against them, he said CBN used the same criteria to evaluate all the banks, and acted on its findings, adding that the apex bank was not after any institution or any individual.
“CBN is not led by sentiments. Rather, CBN is guided in its actions by how the various institutions performed against the stipulated criteria.” Meanwhile, the CBN has also denied claims that it had convened a meeting with the CEOs of the 24 Deposit Money Banks (DMBs) and oil sector operators for tomorrow on issues affecting the banking reforms and the economy, stressing that no such meeting has been slated.
The Senate’s invitations to the CBN governor, Sanusi Lamido Sanusi; Chairman of the Economic and Financial Crimes Commission (EFCC), Mrs. Farida Waziri and the Attorney General of the Federation, Michael Aondoakaa, to appear before it on Tuesday was postponed till another date as the trio were conspicuously absent.
This was sequel to the ongoing World Bank conference at Istanbul, Turkey, which Farida and Lamido are currently attending. The Senate President, David Mark, announced during the plenary session that those invited had sent in letters to the Senate requesting that the date should be shifted.
The Senate, last week, had summoned them to come and explain the current crisis in the nation’s banking sector. The apex bank, through its governor, Mr. Sanusi, sacked the managing directors and executive directors of five banks, namely FinBank, Oceanic, Intercontinental, Union and Afribank, on account of alleged unprofessional conduct.
However, at the resumed sitting of the Senate after two months of recess last week, Senate President noted that since the episode occurred while the Senate was on recess, it was necessary that they be briefed to enable them to take informed decision on the matter.
He noted that since the matter was already in the court of law, the functionaries should be invited to brief the Senate behind closed doors. According to him, “this is not to be discussed in the open, but, we will invite them to brief us at a closed session.”