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 Daily Independent Online.
* Monday, August 09, 2004.
Banks begin workers’ lay-off,
branch closures
• CBN directive
is irrevocable, says Oyofo
• N25b capitalisation ‘ll
stabilise banking industry - Soludo
By Mojeed Jamiu
(Lagos)
Adetutu
Folasade-Koyi (Abuja) and Segun Adeleye (Abeokuta)
Job
losses and branch closures have become the first casualties of the new
N25 billion capital base for banks as the financial houses begin to
realise the inevitable.
As part of the
conditions for merger by some of them to meet the target, set by the
Central Bank of Nigeria (CBN) on July 6, one of the groups considering
that option has worked out modalities to shed 20 per cent of its
workforce.
Sources close to
the banks said in Lagos at the weekend that it is inevitable to take the
tough position if they must survive.
The banks have
started compiling names of those to be fired, especially those who have
scored low marks in their appraisals over time.
Other criteria
to be applied in the rationalisation include the ability of certain
branches to meet targets as well as the ability of the staff to meet
their individual targets.
Though some
subtle moves are still going on to see if there could be a downward
review of the amount, negotiations are in top gear which could result in
mergers, acquisitions or outright buy-outs.
Of the 89 banks
in the country, only First Bank and Union Bank have a capital base of N25
billion and above. First Bank has N42 billion, Union Bank (N37.485
billion).
To add to the
pressure on banks, Senate Chief Whip Victor Kassim Oyofo has reiterated
that the CBN directive is irrevocable.
His support
comes on the heels of President Olusegun Obasanjo’s pronouncement that
the CBN would not back down. But the matter is yet to be deliberated in
the Senate two weeks after its resumption.
Senators hold
divergent views on the directive. Senate President Adolphus Wabara
believes it will encourage money laundering and defeat the purpose for
which it was conceived, but the Senate Committee on Banking Insurance and
Financial Institutions condemns the hike, describing it as
“ill-conceived.”
An unrelenting
CBN itself has said that the initiative will inject confidence and
stability in the banking sector.
CBN Governor
Charles Soludo said besides, 11 new reforms are being introduced into the
financial system.
He spoke through
his Deputy (Financial Sector Surveillance) Tunde Lemo in Abeokuta at the
weekend where he challenged other CBN 21 branches and cash centres to
emulate the Abeokuta branch which has won the best managed branch award
for keeps.
Soludo
emphasised the bank’s resolve to ensure reliable payments system for a
sound financial running of the economy, adding that a phased reduction in
clearing sessions is being considered, starting off in Abuja, after its
success in Lagos.
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