Isn’t it shocking that many people, who pride themselves on being bankers, know next to nothing about a payment instrument called cheque?
That was a bombshell from the Chartered Institute of Bankers of Nigeria (CIBN), Lagos branch, a 70,000-membership institute devoted to the education and training of bankers in the state.
According to its Chairman, Mr. Kola Abdul, this group of people usually carry big titles, and yet they are ignorant about the core of banking!”
However, to reverse this trend, Abdul says the branch plans to organize a professional banking crusade.
In this interview, he explains more.
We have been able to move from loss position to profitability as a result of team efforts. Incidentally, I happen to be one of the longest serving committee member. I have been on this exco since 2002. I have worked with so many chairmen, including the current CIBN president. And I have been able to learn the ropes; I was able to identify our strength and know our weaknesses; identify the opportunities and the threats. I did all the analyses. And with the support of my people, we decided to latch on to our strength. That naturally helped us out of the doldrums.
It is a project for the future. At least if we are able to complete it in part, we would have been able to take the bull by the horns. It has been intimidating us because of the state of the economy and the challenges in the banking sector. But we feel that we need to take the bull by the horns and start it.
Non-performing loan (NPL) is a function of policy summersaults. I throw it back to the doorsteps of regulators. Policy summersaults! When you encourage banks to lend to a particular sector, and the banks are lending to that sector. All of a sudden, you come up with policies that stifle growth in that sector, there is no way the loans won’t turn bad; there is no way the non-performing loans would not increase. It is just because the banking industry does not have access to the press and you can not report your regulators. It is not possible. And the regulators also know because it is beyond them; because the government is looking at the macro-economy. And, sometimes, it feels that the economy is still at the nascent stage. So they are trying to come up with policies that would engender growth. It is not that government deliberately did some of these things, but when they do them, they have untold effects on the loans you have given to a particular sector to the effect that those who have borrowed would not be able to respond as earlier agreed and the loans would then turn bad. is a natural thing. Look at the crisis in the energy sector. Banks were allowed to lend to the DISCOs, to assist them. Now everybody is saying they have no competence to do some of the things they do; they do not acquire enough equipments. So if government decides to take over some DISCOs now, the loans created for the Discos, running into billions, would turn bad; and the NPLs would go up again. It is not that the banks like it, we have learnt our lessons; corporate governance has improved in the industry.
But you see, these are the products of policy summersault. The government itself has no full control over it. They too feel that our economic problem is amoebic in nature: if it emerges from this side, and you attack it; you see it emerge from another side. That is just it! It is because we haven’t got a strong productive base. We are consumptive in nature; everything, we want to bring it from abroad; we are not consuming those things that we can produce here, depending on foreign goods and services to the extent that it can not match what we can export; our export earnings. So there are distortions every day. So government would keep coming up with policies to address those issues.
Professional banking crusade
It is all about encouraging youths, who are at the crossroads, who do not know. There are so many young boys and girls out there who do not know which profession to follow, telling them what are the prospects in banking, In the nearest future you would not be hearing banking, you be hearing banking and finance because the scope is being broadened. Many of them were intimidated by the challenges we faced in the recent past; the layoffs in the industry and so on,
With the CIBN Act no 5 of 2007, I believe the horizon is clearer; it is better for those who are professional banker as against bank workers. The industry would be taken over by professional bankers. And even when they leave, they can eke out a living by doing what is specially designed for professional banking outside the four walls of a bank because we now have what is called practice licence. We are to check the books of all financial institutions in the areas preserved for professional bankers which accountants cannot handle because they are not competent to handle them. That you are an accountant, you have worked in the bank for a number of years, you have a consulting firm do not give you the knowledge because there are some qualifications that you need to have along with the experience that would make you to speak with confidence. Majority of them do not know what is called Practice of Banking. When it was PoB 1& 2, I passed PoB 2, I failed PoB 1 for many Diets until I had to sit down and asked myself why? And that was the only paper. Other papers, I passed in a single sitting but that PoB, because that is the core of banking. So many of them found themselves in banking and rose to an enviable height because they were able to mobilise deposits. But the core of banking, you need to be certificated in it and speak with authority. Many of them can not define a cheque, they cannot define negotiable instrument , even endorsement of cheque; how you endorse a cheque properly, how a cheque become inchoate, they don’t know.And yet they have big titles. And when the chips are down, and it becomes litigation, the court would make a nonsense of them. Sometimes, they learn at a huge cost. And sometimes, the organization bears the brunt.
Yes! There are insider abuses. Nigerians don’t bank where they don’t know people. Do you know that? The percentage of walk-in customers in financial institutions is very low. People go to a place where they know people. You cannot live by the river bank and wash your hands with spittle. You can not have a relation who has a bank and you say you want to go to a place where you have to start explaining yourself. Naturally, you would say my uncle is so and so. Let me open an account here. So it is part of our culture to lend to people we know so well or people who have a stake in a particular business. Something has to be done.
If people bring business to me, it is because we have met somewhere or we have cultivated friendship somewhere. When we wanted to know these people, I talked to somebody and the person introduced the people to me. And I thanked the person today. That is connection! If, to a large extent, the person bears my name or he is my relation, it becomes insider abuse. But often times, outsiders also abuse the system. If the economy is hot for them, it is also hot for everybody, both the insider and outsider. We need to address the macro-economic issues: those things that are making Nigerians to default. The propensity of default in Nigeria is high. It is not that all of them across board want to default. Some things are fundamentally wrong!
Buy Nigerian goods and services as slogan should go on. Many of us dont need to wear expensive shoes. But we still wear expensive shoes. Those things we say are inconsequential add up to depleting our foreign reserves. Let’s buy local goods and services or we can say perhaps let’s reduce the emphasis on wearing suits to offices. Let’s be wearing Ankara, you will see that all these textile industries would come back to life.
The credit registry has helped to strengthen the performance of credit bureaux. You can access information about a borrower with ease. And that naturally has helped because you can not lend without getting information from two, out of the three credit bureau, about a customer. And you are expected that when someone borrows from you, whether it is one Naira or N100million, to pass that information to two credit bureaux, while you are expected to get information before you lend to the person from two credit bureaux. Incidentally, you will surely get information about the person. If we have three (credit bureaux) and you are supposed to upload information about a borrower to two, at least one of them, when you want to lend to another person, would tell you that this man has a debt here o! This has helped a great deal. It is part of the things being put in place to ensure that insider abuse is reduced. Corporate and professional borrowers-majority of them are bankers who are angry with the system- know banking more than you and I. They sit down there, look at the loophole and hack into it. They could borrow from many banks because they knew that we didn’t have central information system. This (credit registry) has reduced that. It is a welcome development.
What would you like to be remembered for?
I want to be remembered as somebody who has served meritoriously; somebody who, being given the opportunity to mount the podium of leadership, has added value; meaningful value to the branch. So I believe in value addition. And that informed the strategic agenda we came up with, spelt SPEMERA.
When I came up with it I called my people and everybody applauded it. We have been following it to the letter. Even when things were rough, we decided to make everything work because the halo effect is very important. On the part of staff, we decided to trim them. We decided to do many things. We had all these; we’ve been doing them before., even during the last administration. But based on my experience in leadership and passion, I decided to be the central force and make it quite participatory. Whenever we are having our exco meetings, I sit down as chairman and nominate somebody to coordinate the meeting while I look on. But when there is argument, I would come in. Everybody is taught how to handle things because 22 people of the same academic backgrounds, the same intellect would not see things the same way. So there would surely be arguments. So I have succeeded in grooming people and I have also succeeded in measuring our performance.
By the grace of God, we are hoping to start the foundation of the dream house before the year runs out. We are working hard to ensure that we make 10 or 20 times what we made during the 2017 Lagos Bankers’ Nite this year. Fortunately, an old classmate, Tunde Popoola, who is the MD of CRC Credit Bureau, is the Chairman of the organizing Committee. He has shown a great deal of passion, an unequalled passion, to ensure that we achieve the desired success. So if we are able to do that, it is just a matter of seeking the government’s approval to bring down this structure and then lay the foundation for the building. We have the prototype there. We are working assiduously to achieve that.