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Is IBTC’s Atedo Peterside A Clog in Saludo’s Wheel? By Banjo Odutola
It
is not often the luxury to write about the confusion of a quick mind
presents itself. If I attempt to castigate Mr. Atedo Peterside as
confused, I shall achieve nothing. Behind his often-serious demeanour
– he has a very fine and intelligent mind. Were I to state
emphatically that I know him – that would be tantamount to an
acquaintance being termed a friend. I am wiser than that. Perhaps, it is
safe to state that I have met him on several occasions and the quickness
of his mind is no news to me. However, my take on the advertorial
propagation of Bank Capitalisation by this King’s College Old Boy, ex-NAL
Merchant Bank whiz kid and current Chief Executive of IBTC is that his
arguments are persuasive but fundamentally flawed. Take for example –
he inquired as to the methodology in arriving at N25 Billion Capital
Base and was flippant with his inquiry. Whereas, Dr. Yerima
Lawan Ngama in
his article: “Comments
on Soludo's Consolidation of the Nigerian Banking Industry”
presented a more sensible argument by stating that the new Central Bank
Of Nigeria (CBN) Chief has not clarified whether the required N25
billion refers to the Paid-up Capital or Shareholders’ Funds or to the
sum of Tier I, Tier II and Tier III capital as defined by the new Basle
Accord. Cogent,
the IBTC Chief may be – he missed the point that a policy has not been
formulated. Mr. Peterside’s submission is equivalent to criticism of a
Judge reserving judgement – when all the Bencher seeks is time to
consider the arguments in his Court. Or, questioning the motive of a
decision maker, who chooses to consult and not pontificate. Also, his
likening of policy-making to commerce only served to betray a weak
argument. His views are not superior to the objective of repositioning
the Banking Industry. Hence, was he providing an extension of an all
important dialogue or being pretentiously a clog in the new CBN
Governor’s Wheel? The
IBTC Chief ought to reread the address delivered
by the new Governor to
the Special Meeting of the Bankers’ Committee.
He may find the primary and basic requisite in Administrative Law for a
policy maker. It is Consultation. The new CBN Governor seeks nothing but
a collective dialogue for what he intimated as his “thoughts” - a
healthy process for the Banking Industry in particular and the nation in
general. A smart move for which no Court of Law in the nation could ever
grant a judicial review of his policy as they would be precipitous of
the on going consultation. Smart one – Professor Saludo! When
Mr. Peterside speaks – it is the voice of an Oracle that we hear. So,
it is an unlikely voice to ignore. As we take notice of him – we ought
to remember that this is an Oracle whose self interest conflicts with
the on-going debate and there is absolutely nothing wrong that he
preserves his Turf. Nonetheless, his preservation remains subordinate to
our national economic success and this is the main reason why he must
not gain a superior position in this debate. His views must be
considered carefully and if there are better arguments – politely,
what he advocates must be jettisoned. It is curious that his submission
is more of the stance of a Peacock rather than an engagement to
dialogue. Consider
some of his arguments: Firstly, he cautions on time limits for the
proposed policy. That may well be relevant. However, he ignores staff
limitations and budget constraints in due diligence in Mergers and
Acquisitions. His submission of the time taken by his Bank and staff is
hardly a good enough index. Advising a longer period is no reason not to
stick to how long a time the on-going debate recommends. Be it shorter
that 30 months or not. His contention of the methodology is possibly
conventional as previous mergers and acquisitions have taken longer at
his Bank. It is not and must not be allowed as the only time frame that
the CBN Chief considers. In essence – what commercial outfit would not
want to drag out due diligence for the benefit of profit costs?
Policy-making is not tangential to profit costs. And, in this debate,
that again makes inferior the IBTC Chief’s base. It is cheap blackmail
seeking who advised 18 months. The CBN Governor must not yield ground.
When policy is formulated several constraints must be taken into
consideration – what Mr. Peterside argues by stealth on time limit is
hardly tenable. What
is particularly interesting in his position is the issue of phased
withdrawal of public sector funds. He opines that such withdrawal may
cause a Banking Crisis. Yet, admits that there are crises in the
Commercial, Investment and Central Banking - a contradiction of sorts.
Perhaps, what he meant to say was that the crisis would deepen. However,
what the CBN Chief proposes is for Banks that meet the Capitalisation
requirement be the only ones allowed to hold public sector deposits and
participate in the DAS Auction. The recommendation of the on-going
debate may be contrary to that position. But, what is wrong with it
anyway? Is it the withdrawal of public sector funds in Banks that do not
meet the new requirements that may deepen the subsisting crisis? The
conventional wisdom is that too many Banks, their Staff and Civil
Servants have earned brokerage fees and the public sector has been paid
non-competitive rates of interest. This is an area for the Obasanjo
government to probe and it is a probe that must stretch back to the
1980s. Then, we may find that many Banks and some of their staff will
face civil recovery actions and possibly – prosecutions, where
government departments and Parastatals have been cheated of interest
paid on deposits. In
describing the Lebanon Approach – again, the IBTC Chief misses the
point. There is hardly a need for legislation until after the
consultation. At that stage – the Nigerian Factor is zeroed into
recommendations made to the Presidency to form the basis upon which the
National Assembly repeals and enacts new legislations. But, it is not
all doom and gloom in Mr. Peterside’s attempt. What, perhaps is most
telling is his three-pronged indictment of the Banking Industry. What, I
wish to highlight particularly is the failings of the Apex Bank - an
issue that new CBN Chief wants to tackle. The regulatory arm of the Apex
Bank during the on-going debate must be sanitised. It is no secret that
too often CBN officials compromised the stringent directives during
inspections - where the members of Boards of Directors are perceived all
too powerful. Professor Saludo had better become another Mr. Nasir El-Rufai.
But, in the handling of the economy – he cannot afford to be a Bull in
a China Shop like the Minister. As
for CBN inspectors - there is only one reason for their timidity. Most
of them protect their livelihoods rather than blow the whistle on
Financial Institutions that ought to be sanctioned. If junior inspectors
do not know if their superiors are on the side of the investigated Bank
– who wants to bell the cat? I
note a veiled contempt in Mr. Peterside’s stance. It is likely that it
was not intended. Nonetheless, it is there. For his sake – I want to
believe my take is only making a case where none exists. There is
currently the school of thought that believes the current CBN Chief is a
square peg in a round hole. He is too young for the position he occupies
and they are older. One of “them” ought to occupy the seat. He is an
Economist – they are Bankers and long in the tooth, for that matter.
Who does Professor Saludo think he is to consider such seismic changes
when they are monopolists of Banking Industry wisdom? So, they would
want the rest of us to believe. I disagree profoundly with those
thoughts. They are nothing but arrogant and idle. And, I hope this new
CBN Chief and Mr. Obasanjo – the president would not countenance those
that are unwilling to provide arguments that can sustain the Banking
Industry, which needs urgent repositioning – just as the new governor
contends. Without
doubt – there is a crisis looming in the Banking Industry. Too many of
these Banks are nothing but traders of Foreign Exchange; and cheap
public sector money depositories. As for staff of Foreign Banks now
willing to work for IBTC – good luck to them. Why must we not
reorganise our Banking Industry because of the fear that some Foreign
Banks may abandon the nation. Mr. Peterside may in this assertion have
stretched this point to alarm. It does not buttress his submission. In
fact, it is contradictory because many of the Home Headquarters of these
Foreign Banks would rather operate in a well organised Banking Industry
– so that they spend less on regulatory compliance for businesses
emanating from their Nigerian subsidiaries. The
IBTC Chief may not be aware that even lawyers in There is a lot of work ahead of the new CBN Chief and I would like to suggest a few tasks that he must embark on immediately. Firstly, during the on-going debate – he should make no public pronouncements. If he does, he may regret it. Secondly, he needs a good media relations-person to expound his “thoughts” and his objectives must be taken to the common-man on the streets. Presently, this dialogue remains within the confines of those who are the likely victims and victors of the reorganisation. The CBN chief cannot win the argument because of their self-interest. The high seas and low valleys; the hills and Plateaus must not suffer the Saludo debate. This debate should be taken to the villages, towns and conurbations. They must reverberate on the radio and radar of this nation. Once, the participation of the man in the street is allowed – most of these gladiatorial Bankers would shy away from dictating what must happen in the debate. You see, it may be argued that the common man would not understand the argument. That is Cock and Bull! If the language of the debate is broken down in Grubstreet - the common man whose hard earned money needs to be protected would not hesitate to ensure the new policy protects his interests and not the Banks’. Soon, these Bankers would realise that they are a service industry and not fashion boutiques. Thirdly and lastly, the new governor must also listen to the wisdom of those Bankers at the forefront of the Industry. They are adept in what needs to be done. So, in seeking to serve the nation and the Banking Industry – he must not throw the baby out with the bath water. Mr. Atedo Peterside is right to advocate good care is taken in the governor’s repositioning of the Industry. So, is he a clog in the wheel of change? I know not – once the Jury returns, I shall keep you posted.
BANJO ODUTOLA The
writer is a solicitor of the Supreme Court,
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