As expected, the Nigerian media again devoted their pages this week to the continuing cleansing in the banks and the resultant dismissal of five bank chief executives a few weeks ago.
However, the problem seemed to have taken a new turn as the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, and members of the House of Representatives (the lower chamber of the National Assembly) engaged in a war of words over the reforms.
“Bank reform: CBN Act unconstitutional, null, void – Reps” was the headline of the TRIBUNE newspaper on Friday.
It reported that the House of Representatives on Wednesday declared the CBN Act on which governor Sanusi based his sweeping reform, as well as bail-out loans of 420 billion naira to the five affected banks as unconstitutional, null and void.
The CBN governor had sacked the managing directors of five banks â” Oceanic, In tercontinental, Afribank, Union and FinBank – and issued the said loan, accusing the affected bank managements of engaging in unethical banking practices, which included giving out loans to customers without collaterals and money laundering.
The House of Representatives Committee Chairman, Banking and Currency, Ogbuefi Ozongbachi, citing several sections of the 1999 Constitution, regarding the issue of revenues as they relate to Consolidated Revenue Fund and the Federation Account, said that the constitution was superior to the CBN Act.
The lawmaker said it was a common knowledge that the CBN governor could not rely on the CBN Act to issue the said bailout to the affected banks, declaring that the constitution was specific that any Act of the parliament that was contrary to the spirit of the constitution was unconstitutional, null and void and of no effect.
Writing under the headline “House: Sanusiâ?s Summon is No Blackmail”, THIS DAY newspaper reported that the battle between the House of Representatives and the CBN over the constitutionality of the bailout to five commercial banks seemed not yet over.
It said that earlier in the week, the lower chamber of the National Assembly said the summon of Sanusi by the Committee on Banking and Currency was in furtherance of its constitutional responsibilities and not an act of intimidation or black mail against anyone.
The clarification came just as the House dismissed insinuations in some quarters that its summon of the CBN governor was sponsored by some interest groups, including Rockson Engineering, one of the debtors of Intercontinental Bank.
Chairman, House Committee on Media and Public Affairs, Esemeh Eyiboh, who briefed newsmen, said the issue at stake was the legality of the actions of CBN in injecting 420 billion naira funds into the five banks without recourse to the National Assembly and nothing else.
“You gave us law to sack bank executives, CBN tells Reps”, was the SUN newspaper headline on Friday in which it reported that a drama ensued on Wednesday as the House of Representatives Committee on Banking and Currency engaged Sanusi in a hot debate over the supremacy of the provisions of the 1999 Constitution and Banks and Other Financial Institutions Act (BOFIA).
It said that besides the shouting match, the session almost ended in scandal as the Chairman of the Committee, Ogbuefi Ozomgbachiâ?s speech was discovered to have been scribbled on the letter-head of Rockson Engineering, one of the organizations named in the CBN list of high profile debtors to one of the five banks.
The VANGUARD newspaper reported the story under the headline “Sanusi floors Repson N420bn bailout to banks”, saying that Sanusi rose Wednesday in stout defence of the money he injected into the five troubled banks.
It quoted Sanusi as saying that he acted in consonance with the provisions of the Banks and Other Financial Institutions Act, BOFIA, which is also an Act of the National Assembly.
Appearing before the House of Representatives Committee on Banking and Currency in Abuja, Sanusi insisted that ‘the BOFIA Act is an act of the National Assembly, so you (Reps) therefore authorised our action’.
The CBN also said that the money injected in the sick banks did not need National Assembly approval as it was not an expenditure, but a loan that would be returned to the CBN in a matter of time.
In a related development, the INDEPENDENT reported that the CBN had cleared 11 more banks and indicted three.
“CBN Banks’ Audit: 11 More Cleared, Three Indicted” was the paper’s headline on the story. It said 11 banks (names withheld) had reportedly scaled the latest round of the audit by the CBN, adding that “Three others may have been indicted, however.”
Fourteen banks were audited this time around, after the 10 audited last month, which led to the sack of five Managing Directors.
The DAILY TRUST headlined its story “Troubled banks: EFCC recoups 66 billion naira from debtor”.
The Economic and Financial Crimes Commission (EFCC) said it had recouped 66.7 billion naira so far from debtors who had continued to flood in to make payments.
As at last Friday, monies recovered stood at 45.5 billion naira but between Monday and Wednesday this week, debtors paid in 21.2 billion naira.
The story on banks effectively overshadowed other stories during the week in review. They include the lingering strike by Nigerian university teachers.