October 25, 2011 / Proshare Web TV
In this exclusive interview with Temple Asaju, Proshare’s News Editor – Mr. Segun Aina, First Vice-President of the Chartered Institute of Bankers of Nigeria (CIBN) answers questions on the relevance of the CIBN in today’s banking industry and how the institute sees developments across markets.
Q: The Chartered Institute of Bankers of Nigerian (CIBN)’s 2011 Annual Lecture centred on “Building a resilient economy, with focus on selected countries”. During the lecture, Canada was used as a case study, perhaps based on the fact that it was the only country not hit during the global crisis. Interestingly, Canada practices Universal Banking as against the Mono-line Banking system we have adopted in Nigeria – Is there any lesson or inference we can draw from this insight?
There will be developments in the Nigerian Banking System because we are learning from other Economies. We have learnt today from Canada and the experience of Australia, which is similar to that of Canada. In actual fact, the Institute of Bankers has been talking about “Re-professionalizing” banking, that is, doing banking the way it was done many years ago – going back to the basics, which was what Canada did before the crisis manifested.
We learnt ‘banking’ from the United Kingdom in terms of professionalism, unfortunately the UK Banking system was adversely affected by the influence of the American aggressive Banking System.
Therefore, what the Institute is preaching today is that we should go back to that Era of Conservatism, Consistency and Integrity in the Banking System and Banking Transactions. All our stakeholders are keyed into this and expect the industry to win back trust based on this premise.
Also, we as an Institute are poised to continue to provide the Capacity Building Framework that will ensure that our members and the entire people working in the banking industry key in into this. In fact, one of the things that we are also involved in now is the membership of an International Institute, a body that is developing a Global Banking Educational Standard, which will also include a Standard of Education and Standard of Ethics and Professionalism.
Recently, we were in Malaysia with professionals from twelve other countries who came together to deliberate on how to move the profession forward. Nigeria was the only country from Africa. The Registrar of the Institute and I attended the conference on behalf of the CIBN; and I am happy to report that we were selected as part of the five-continent body; one from each continent. In summary, we deliberated on how to standardize Banking Education, Banking Ethics and Professionalism throughout the world. We believe that with all this efforts we are putting together, bankers in Nigeria will learn how to do the business of banking for the 21st century in a more ethical manner and by taking into consideration, the developments in the economy and the interest of their depositors.
Q: CIBN seeks Resilience in the Nigerian Financial System, but there are two main issues right now in the Nigerian economy: The new Key Benchmark Lending Rates (MPR), which has just been increased 12.5% (by 275 basis points) and the other is the Petroleum Subsidy Removal. What does this portend for the Nigerian economy?
As you very well know, the Nigerian Economy is not immune from what is happening in the Global Economy and every Economy is trying to look at itself and see what they can do to ensure that they put in place very good Fiscal and Monetary policy to ensure that it achieves the objective that it wants to set for itself. On the removal of fuel subsidy, of course there should be release of funds for the Government to fund other developmental projects, provided those funds would be used for Infrastructural Developments. It all depends on how things are implemented. What is important is that the interest of common people should be taken into considerations, so that whatever policy the government will put in place, it must ensure that the implementation is done in a way that it will not be a pain to the masses or to the generality of the public. This will no doubt be of immense benefits to the Nigerian citizens.
In terms of Interest Rate, the regulators try to influence the economy by various means and one of the levers it uses is through the management of Interest Rates and Foreign Exchange Management - to be able to ensure that the monetary policy objective are achieved. So when these are either jacked up or reduced, it is all aimed at ensuring that those objectives are met and I think that is why what the Central Bank has done in recent time is necessary to ensure that those things are achieved.