Calls on the Central Bank of Nigeria (CBN) to take action against commercial banks flagrantly flouting the rules to the detriment of other customers and the banks have placed infractions in the sector in the public space once again. The coordinator of Progressive Shareholders Association, Boniface Okezie, and Independent Shareholders Association, Igbrude Moses, have frowned at the trend and called for tighter laws to prevent it from becoming a threat to the financial institutions, and possibly negatively impact the national economy.

The Banks and Other Financial Institutions Act (BOFIA), as amended in 2020, forbids any director or significant shareholder from being granted more than five per cent of all loans in a financial year, while total credits that could be granted directors in the period should not exceed 10 per cent.

The shareholders have pointed out that the monitoring officials of the CBN should more effectively check practices at the banks. Sometimes, credits are extended to companies linked to the directors in a bid to evade scrutiny.

For last year, STANBIC IBTC granted its directors N56.7b, and Union Bank extended N53b to those charged with the responsibility to ensure that the institutions adhere to the rules and keep the sector healthy. Sterling Bank lent N2.4b, and Access Bank N469m.

Unless the apex bank checks the trend, other provisions of BOFIA and its guidelines may be flagrantly abused by the bank directors, and we may soon find the banks in the state that led to the failed banks episode of the 1990s, and the concomitant effects.

Other excesses and abuses that customers have complained about include willful deductions from their accounts and failure to adhere to rules regarding credits to agriculture and the real sector of the economy; rather preferring short term loans for trading.

As soon as the Federal Executive Council is inaugurated, the job of the new economic team and fiscal managers is well cut out for them. Together with the President who has overall oversight over the economy and the mandate to heal the land, the CBN has a duty to rein in the commercial banks’ chiefs. The fiscal and monetary authorities should learn to align their programmes in the country’s interest and all sectors must be made to realise that only a disciplined approach could help lead the economy out of the wood.

Given the size of her Gross Domestic Product and quality of human resources, Nigeria has no reason to be so poor and pressed down. Banks are the pipelines through which lubricants are supplied to the national economic machine. As such, they ought to be disciplined in ensuring that all their publics, including the directors, managers, shareholders and customers keep to the rules. Indiscipline and betrayal of trust are parts of the problems of development in the country. These must be stopped by the Tinubu administration.

There are examples from other countries such as the Asian Tigers, China, United Arab Emirates, even Malasia and Indonesia for Nigeria and other African countries to learn from. At the centre of it all is the determination of all to play by the rules, identify either the national interest, ethos, mores and values and realise that all must contribute to baking the bread to be shared.

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