Was the CBN governor (Sanusi) biased?
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Posted by Felix Okoli on October 11, 2009 at 12:36:15:
A lot of concerned shareholders and the general public in the Nigerian media have made negative comments about the way the current CBN governor Sanusi had been handling the affairs of the banking industry. Lately more than eight banks have had their C.E.O's sacked and board of directors dissolved due to CBN's supposed sanitizing efforts. But were these decisions been made in bad faith.
Just within than 8 months in the recession and when Nigeria's capital market had been slumped by recession and withdrawal of global funds, the CBN had made lots of decisions that further slumped the prices of stock prices of banks. Except for a few select stocks now in the banking industry, most of the others have had their prices drop by more than 95%. Share prices for banks like Intercontinental bank and Union bank were well trading around N15 - N20 due to the effects of global recession but the CBN's action had further reduced it to about N3 - N5 since it created fear in the minds of the investing public.
National Coordinator of the Independent Shareholders Association of Nigeria -Mr. Sony Nwosu had this to say in the business interview conducted by the Guardian on Sunday
"One thing, the present leadership of CBN was an operator, even up till recently. It competed for business in the market with all these people he removed from their banks. One of the operators had complained about de-marketing, which was led by the present governor of the CBN. It is on record that there were exchange of letters on it. If eventually, God made you a regulator, you don't punish all those that you have had issues with along the line".
I also got to know about Sanusi's history of working at First Bank from a friend and how they were all out in forceful competition against other banks, so it would not be too far from the truth that he may have been biased on making selective judgements on the troubled banks when in actual case, all the banks in Nigeria may have been troubled.
Such actions did not help the banking industry as a lot of customers went on a wide scale withdrawal of deposited fund most especially with their ATM cards.
Nwosu further commented, "In the past, we had only four banks namely, First Bank, Union Bank, UBA and Afribank. Those were the major banks. The current leadership of the Central Bank worked in two of these banks - UBA and First Bank. An infraction in the banking system is a general thing. He left UBA and First Bank because he already worked with these two banks and clamped down on the other two, where he never worked. Why?".
Well, my own comments are that the Senate should not allow the CBN to make such unilateral decisions in the future at it is capable of collapsing the entire stock market. I think shareholders who hold a reasonable amount of investment ought to sue the CBN governor to court, if they wish to, for civil damages, since they did incur huge losses by those actions.
Comments:
A lot of concerned shareholders and the general public in the Nigerian media have made negative comments about the way the current CBN governor Sanusi had been handling the affairs of the banking industry. Lately more than eight banks have had their C.E.O's sacked and board of directors dissolved due to CBN's supposed sanitizing efforts. But were these decisions been made in bad faith.
Just within than 8 months in the recession and when Nigeria's capital market had been slumped by recession and withdrawal of global funds, the CBN had made lots of decisions that further slumped the prices of stock prices of banks. Except for a few select stocks now in the banking industry, most of the others have had their prices drop by more than 95%. Share prices for banks like Intercontinental bank and Union bank were well trading around N15 - N20 due to the effects of global recession but the CBN's action had further reduced it to about N3 - N5 since it created fear in the minds of the investing public.
National Coordinator of the Independent Shareholders Association of Nigeria -Mr. Sony Nwosu had this to say in the business interview conducted by the Guardian on Sunday
"One thing, the present leadership of CBN was an operator, even up till recently. It competed for business in the market with all these people he removed from their banks. One of the operators had complained about de-marketing, which was led by the present governor of the CBN. It is on record that there were exchange of letters on it. If eventually, God made you a regulator, you don't punish all those that you have had issues with along the line".
I also got to know about Sanusi's history of working at First Bank from a friend and how they were all out in forceful competition against other banks, so it would not be too far from the truth that he may have been biased on making selective judgements on the troubled banks when in actual case, all the banks in Nigeria may have been troubled.
Such actions did not help the banking industry as a lot of customers went on a wide scale withdrawal of deposited fund most especially with their ATM cards.
Nwosu further commented, "In the past, we had only four banks namely, First Bank, Union Bank, UBA and Afribank. Those were the major banks. The current leadership of the Central Bank worked in two of these banks - UBA and First Bank. An infraction in the banking system is a general thing. He left UBA and First Bank because he already worked with these two banks and clamped down on the other two, where he never worked. Why?".
Well, my own comments are that the Senate should not allow the CBN to make such unilateral decisions in the future at it is capable of collapsing the entire stock market. I think shareholders who hold a reasonable amount of investment ought to sue the CBN governor to court, if they wish to, for civil damages, since they did incur huge losses by those actions.
Comments:
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Re: Was the CBN governor (Sanusi) biased?
Posted by Michael Otu on October 14, 2009 at 12:50:54:
In Reply to Was the CBN governor (Sanusi) biased? Sanusi sack has exposed Soludo as a leader who can sweep a very serious thing under the carpet. He should head now where he is being called for a lecture job and not our no. 1 state admin.
Sanusi was right to sack them.
Re: Was the CBN governor (Sanusi) biased?
Posted by Janet on October 15, 2009 at 03:28:31:
In Reply to Was the CBN governor (Sanusi) biased? Sanusi is unnecessarily overheating Nigeria's economy. This is not the right time to be declaring banks unfit. It is only further ridiculing Nigeria's global image and besides what does he have to say about Unity bank? Is that not being biased?
Re: Was the CBN governor (Sanusi) biased?
Posted by Ime Willie Udoh, USA on October 15, 2009 at 08:44:41:
In Reply to Was the CBN governor (Sanusi) biased? Nigerians must live to be patiotic. What Sanusi is doing is for the interest of the country. The country is highly corrupt, somebody has to stand firm for the interest of the country. Sanusi is not biased.
Re: Was the CBN governor (Sanusi) biased?
Posted by Adegboye Babatunde on October 16, 2009 at 06:14:02:
In Reply to Was the CBN governor (Sanusi) biased? There is nothing wrong in what the CBN governor has done. As far as the CEO of these banks can go a head to borrow allready stupenduosly rich Nigerians the money of we the poor masses without collatterals, in am surprised at what we happen if these debtors die.
Re: Was the CBN governor (Sanusi) biased?
Posted by Rev. F.Foguntirin on October 21, 2009 at 06:51:06:
In Reply to Was the CBN governor (Sanusi) biased? Nigerians politicises every issue. To stamp out corruption, it must start somewhere by somebody.Let us be be courageous enough to condemn the culprits as well as their collaborators. Sanusi was 100% right
Re: Was the CBN governor (Sanusi) biased?
Posted by Martin on October 21, 2009 at 06:51:06:
In Reply to Was the CBN governor (Sanusi) biased? I wouldn't say he was 100% right, although banks in Nigeria are not as safe as they make us believe with their numerous adverts, lots of their MD's are involved in money laundering and doing things that even shareholders don't know about until one day they would hear that the bank is bankrupt.
Sanusi only created scape goats. More than all these 8 or so banks mentioned are not healthy although they ought to, because of the involvement of public funds in them. Sanusi only selected those to punish and personally, i don't like his beef with Intercontinental bank, it all has to do with the long term enmity between First bank where Sanusi once worked and Intercontinental bank. It is all competition. I also believe the Sanusi has a lot of shares in First bank. They were the ones who initially started the de-marketing campaign against Intercontinental bank earlier this year. It is all bad blood and not just as a result of unethical practices which i believe even First bank and a lot of the ones not sanctioned were also involved in.
Re: Was the CBN governor (Sanusi) biased?
Posted by Chioma on October 21, 2009 at 11:30:03:
In Reply to Was the CBN governor (Sanusi) biased? Well the last has not been heard about the banking crisis supposedly caused by CBN and i know that Sanusi has used reverse psychlogy to make some Nigerians to believe that he's doing the right thing. Well whatever someone reaps they will sow. The Reps are set to investigate the crisis and see if there is fraud or corruption on the part of CBN officials.
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