The Senate has criticised directors of commercial banks in Nigeria over unfair practices.
Senator Nkechi Nwaogu, chairman Senate Committee on Banking and other Financial Institutions, said this in Abuja at the continuation of the on-going public hearing by the committee on the handling of depositors’ funds trapped in failed banks.
According to Senator Nkechi, some of the directors of banks in Nigeria were known to have obtained loans of between N10 million and N12 million without visible collateral and therefore could not liquidate the loans as and when due.
While confirming that this was one of causes of bank failures in Nigeria, the Senator noted that the practice has continued unabated in the industry.
She noted that many of the top managers of banks in Nigeria are neck-deep in insider dealings, stressing that there was need for regulatory authorities to stem the tide of unethical practices in the nation’s financial sector to avoid a repeat of the bank failures that occurred in the 1990s.
There have been renewed concerns over the liquidity strength of Nigerian banks in the face of the global economic recession.
Inquest into the performance of the banking industry caused some stir as the Central Bank of Nigeria (CBN) recently announced plan to pay off all private deposits whose funds are trapped in Fortune International Bank Plc and Triumph Merchant Bank Plc, a move the management of these banks considered prejudicial.
The decision of the CBN to pay  private depositors Fortune Bank and Triumph Merchant Bank the sum of N8.8 billion and N3.3 billion respectively is being contested as the banks are said to have been in court challenging the revocation of their licences by the CBN since 2005.
Promoters of the banks accused the CNB of double-standard for approving the payment of depositors of the banks.
The further contended that there was no need for the CBN order since according to them , the banks have enough fund and assets to pay depositors and settle other obligations and urged the Senate to prevail on the CBN to restore their licences.
They also said the CBN ought to have involved them in the process of approving the payment to depositors of the banks. Senators at the public hearing urged the CBN to be more transparent in handling matters relating to failed banks, adding that officials of the banks involved should be involved.
According to Senator Nkechi, it is important for banks in the country to ensure compliance with ethical practices to safeguard the sector from the endemic corruption which she noted has set the country back in so many ways. Members of the Senate committee agreed that the liquidity of banks in the country and the manner in which they are managed remains crucial to the economic development of the country.
The committee therefore advised promoters of banks in the country to observe strict compliance with regulatory requirements in the conduct of all their activities.
On his part, Mr. Tunde Lemo, deputy governor, CBN, defended the position of the CBN on the matter.
He said the decision to pay the private depositors was part of measures adopted by the apex bank to alleviate the suffering of the private depositors in those banks.
 According to him, the apex bank is prepared to go to any length in ensuring that banks operate in accordance with laid down rules and regulations in the banking industry, adding that ordinary Nigerians would not be allowed to suffer as a result of corrupt tendencies of a few.

FG advises accountants on forensic accounting

By Isah Ismail
The Federal Government has advised accountants in Nigeria to embrace forensic accounting as a way of stemming the tide of corrupt practices in the country.
President Umaru Yar’Adua gave the charge at the graduation ceremony of members of participants at the Association of National Accountants of Nigeria (Anan) training institute in Jos, Plateau State at the weekend.President Yar’Adua who was represented by Mr. Mansur Mukhtar, minister of finance noted that accountants have crucial role to play in the fight against corrupt practices in Nigeria. According to the president, there is very little the nation can achieve in the fight against corruption without the support of those who keep records and information about financial transaction. President Yar’Adua called on accountants to brace up to the challenge of leading the onslaught against corrupt practices in public and private sectors of the economy.
The president, who noted that corruption has been a mitigating factor against development efforts in the country, said forensic accounting has the capability to unravel cases of corruption even long after they have been perpetrated. He called on members of Anan to join forces with other stakeholders in sanitising financial reporting standard in Nigeria, stressing that it is important for accountants to use their privileged position to save the country of embarrassing consequences of corrupt practices.