Dr. Friday Imoluamen is a financial expert with over three decades experience cutting across different verticals of the financial and banking subsector, business administration and management, to mention a few. The banker, who literally rose through the ranks, started off as a dispatch rider at Stanbic IBTC Bank. But with a dint of hard work and persistency of spirit, he rose to a management position and subsequently served as the Head of Cash Management in the bank until his exit in March, 2024. The Edo-born technocrat shared with IBRAHIM APEKHADE YUSUF interesting insights about his career trajectory vis-à-vis the prospects and challenges in the nation’s banking landscape, among other germane issues. Excerpts:

As someone who served in one of the top-tier banks in the country, how would you describe your career trajectory in terms of progression, job fulfilment, and satisfaction?

My career trajectory at Stanbic IBTC Bank was a remarkable journey of growth and fulfilment. Starting as a dispatch rider with just a school certificate, the bank provided an enabling environment that supported my academic and career aspirations. Through hard work and dedication, I earned a B.Sc., two master’s degrees, and a Ph.D., eventually rising to a senior management position.

The bank’s commitment to staff welfare and development significantly contributed to my job satisfaction and fulfilment. Additionally, I had the honour of representing the industry at international conferences on cash management, further enriching my professional experience.

You held a very sensitive and delicate position while working with Stanbic IBTC Bank, yet no money was reported missing. How were you able to maintain your integrity in spite of the economic challenges in the nation?

Maintaining integrity in any position is paramount. I adhered to the highest levels of integrity and accountability, recognising that our actions define our legacy. Transparency, ethical conduct and strong sense of responsibility guided my decisions. This unwavering commitment to integrity ensured that I managed resources diligently despite economic challenges. It is a privilege to serve in any capacity, and it is crucial to honour that privilege by upholding ethical standards.

Based on your track record of integrity and honesty, if you are called upon to render service to the nation today, will you make yourself available?

Absolutely. I am deeply committed to contributing to the growth and development of Nigeria. It is disheartening to see individuals misuse their positions for personal gain, ignoring the future of the nation. If called upon to serve, I would do so with dedication and integrity, focusing on national development rather than personal enrichment. Serving the country is an honour, and I am always ready to contribute positively.

There seems to be a high turnover of staff in banks these days. What could be responsible for this, and how can it be addressed?

High staff turnover can result from various factors, including recruitment practices and workplace conditions. At Stanbic IBTC Bank, recruitment was based on actual human resource needs, ensuring efficient service delivery. If high turnover is an issue elsewhere, it may be due to decentralised recruitment processes. Centralising recruitment under the Human Resources Manager could help assess actual needs and streamline staffing. Additionally, embracing digitalization and advanced technologies can optimise staffing requirements and improve efficiency, reducing turnover.

What is the interplay between the CBN, banks, and other financial institutions in terms of policy matrix, compliance, and regulations as far as financial mediation is concerned?

The Central Bank of Nigeria (CBN) oversees the operational activities of deposit money banks and other financial institutions to ensure compliance with regulations. The CBN engages with bank executives through regular Bankers’ Committee Meetings to discuss industry issues and gather input. The CBN Compliance Department collaborates with bank compliance units to ensure adherence to policies. This supervisory role is crucial for maintaining stability in the banking sector, with banks required to submit regular financial reports to the CBN.

You once served as a member of the CBN Committee for the clean note policy. What do you think is the magnitude of the problem of local currency battering and mishandling?

The Issue of poor handling of local currency is significant and long-standing. The Naira should be respected as a national symbol, similar to how the American dollar is treated. Cultural practices and a lack of awareness contribute to the problem. The Clean Note Policy Committee, which I was part of, aims to address this by advising the public against practices like writing, stapling, and soiling banknotes. Despite these efforts, public attitudes need to change to ensure the currency remains clean and durable.

Who are the other players in the industry in relation to cash fitness and distribution, and what role do they play?

Key players in the cash fitness and distribution industry include Cash Processing Companies (CPC) and Cash In Transit (CIT) companies. The CBN has licensed companies like Banker’s Warehouse (BW) and Integrated Cash Management Services (ICMS) to process cash for Deposit Money Banks (DMBs). Recently, Stirling Trust Company also received a processing licence. The existing CPCs require more support from the CBN to function efficiently and meet the increasing demand from DMBs.

Additionally, new entrants into the cash processing business should be encouraged to enhance capacity. CIT companies are responsible for the secure transportation of cash between locations, ensuring adequate security measures are in place. The CBN has licensed around nine CIT companies for this purpose, and DMBs must use these approved CIT companies to avoid sanctions.

How would you rate the deposit money banks in the country in terms of asset base and shareholding when compared to their counterparts in the rest of the continent and other advanced economies?

Nigeria is still a developing economy, and its Deposit Money Banks’ asset base and shareholding cannot yet match those in advanced economies. However, with the cooperation of relevant players and a conducive environment, Nigeria can achieve significant growth. Patience and trust in the economic policies of the current administration are essential for reaching this goal. While we may not be on par with advanced economies currently, the potential for growth is substantial, given the right conditions and sustained effort.

In your assessment of the nation’s banking landscape, do you think the new N500b capital base for banks as suggested by the CBN is achievable or just a tall order?

The current CBN management aims to strengthen the banking industry, ensuring customer confidence in the safety of their funds. Achieving a N500b capital base may seem challenging in the short term, but with a 10-15 year timeframe, it is feasible. Adequate time for banks to meet this target will prevent the challenges faced during the previous recapitalisation under the Soludo administration. With proper planning and phased implementation, this goal can be attained, contributing to a more robust banking sector.

Most banks still have a huge portfolio of non-performing loans in their books. What can be done to bring this to the barest minimum going forward?

Non-performing loans (NPLs) arise from various issues such as loan diversion, poor business decisions, and economic factors. To minimise NPLs, banks should implement robust monitoring systems, conduct thorough credit checks, and ensure collateral is sufficient. Discipline in loan utilisation and addressing macroeconomic challenges are also crucial. Effective risk management practices, continuous monitoring, and proactive measures can significantly reduce the incidence of non-performing loans.

Insider dealings leading to huge heists remain a major issue in the banking and financial services sector. How do you think fraud of this magnitude is possible despite all these controls?

Fraudsters continuously innovate, exploiting weaknesses in security systems. Banks must invest heavily in IT security and human resources for fraud detection and prevention. The NFIU relies on banks’ monthly reports, so it’s up to the banks to maintain strong internal controls. Implementing a maker-checker system and avoiding excessive trust in any single individual are essential. Additionally, stricter penalties for fraud could deter potential offenders. Continuous vigilance and investment in advanced security measures are crucial in preventing such incidents.

Why is it that Nigeria Deposit Money Banks do not have enough cash to service their customers satisfactorily?

The CBN is responsible for cash distribution and is working to ensure availability. However, the cash isn’t returning to the banking system due to the public’s loss of confidence following the Naira Redesign Policy. Many people now prefer to keep money at home to avoid potential access issues. The current Director of Currency, Mr. Sholaja, is actively addressing these challenges by collaborating with DMBs and providing regular updates. Restoring public confidence and encouraging the return of cash to the banking system are critical steps in resolving this issue.

What do you think can be done to permanently solve the cash challenges in Nigeria?

Nigeria needs to transit from a cash-based to a digital economy, reducing reliance on physical cash. The CBN and other stakeholders should promote digital transactions, especially in urban areas, while maintaining some cash transactions in rural areas. This shift will alleviate the burden of cash management and enhance economic efficiency. Emphasising digital payments and creating a robust digital infrastructure will help reduce the demand for cash and streamline financial transactions.

Some time ago, there was a rumour that the CBN is planning to introduce 5,000 Naira note into the system. What is your take on this?

Introducing a 5,000 Naira note would come with significant risks and negative perceptions. While it might seem beneficial for banks to process larger denominations for efficiency and reduce minting costs for the central bank, the potential drawbacks far outweigh these benefits.

High-denomination notes can make financial crimes more difficult to tackle, as they facilitate large illicit transactions such as money laundering, bribery, and ransom payments. The ease with which large sums can be transported discreetly using high-denomination notes can hinder efforts to combat these activities effectively. One of the most difficult challenges in Nigeria today is insecurity, and addressing this issue should be at the heart of policy decisions.

Public perception is also a critical factor. Many citizens might view the introduction of such a high-value note as an indication of a weakening currency, potentially eroding trust in the financial system. This loss of confidence could lead to increased hoarding of foreign currencies and reduced participation in the banking system, further destabilising the economy.

Therefore, while the cost-benefit analysis for banks might show some operational advantages, the broader economic and social implications suggest that maintaining the highest denomination at a lower value is more prudent at this time. (The Nation: Text, Excluding Headline)

•Financial expert and senior banker, Dr. Friday Imoluamen

Update news