Insider Abuse: CBN Summons Banks' Chairmen
By Ayodele Aminu
The Central Bank of Nigeria (CBN) has directed chairmen of banks to attend the 273rd edition of the Bankers' Committee meeting slated for Abuja Tuesday next week along with their chief executive officers.
THISDAY gathered that the invitation of the chairmen, the first in the history of the banking industry, is to create an opportunity for the new CBN Governor, Professor Charles Soludo, to discuss some of the problems affecting the industry, particularly insider related abuses.
The Bankers' Committee is an association of the chief executives of banks and selected financial institutions, which meets bi-monthly to discuss the state of affairs in the industry. The Governor of the CBN usually chairs the meeting.
A CBN memo inviting the banks' chairmen to the meeting, entitled "Re: Invitation of all Chairmen of Banks" and addressed to all chief executive officers, a copy of which was obtained by THISDAY reads in part: "Further to our letter of June 16th 2004 informing of the postponement of the above meeting.
"We wish to intimate you that all chairmen of banks are also invited to attend the meeting. Kindly forward the attached invitation to the chairman of your bank." The memo was signed by the Secretary of the Bankers' Committee, Mr. D.O Ogunwole.
The invitation letter addressed to the chairmen on the other hand also signed by Ogunwole states:"The next Bankers' Committee meeting will hold 6th July, 2004. This will be the first meeting with the new Governor of the Central Bank of Nigeria, Professor Charles Soludo.
"You are by this letter invited to the meeting along with the chief executive officer of your bank at the Auditorium, Central Bank of Nigeria, Corporate Headquarters, Central Business District, Abuja, at 10.00 a.m.
"Please endeavor to attend and promptly too, because very crucial issues affecting the industry will be discussed during the meeting."
Explaining why the banks' chairmen are being compelled to attend the meeting, a top CBN official disclosed that Soludo might read the riot act to the chairmen, some of which have continued to abuse their positions.
"There is need to sanitise the banking industry. It is believed that bank CEO's do not have the effrontery to tell their chairmen the bitter truth. The meeting would give the CBN an opportunity to trash out some of the problems threatening the industry particularly the issue of insider-related credits," stressed the official.
Bad loans, particularly insider related ones, were responsible for the collapse of many banks in the early '90s.
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