CBN fraud: Stakeholders seek forensic reform of banking sector

 … As apex bank clarifies on suspended personnel 

From Isaac Anumihe, Abuja

REACTIONS have continued to trail last week’s attempted fraud at the Central Bank of Nigeria (CBN) involving some of its directors and a deputy Governor. Some stakeholders who spoke to Daily Sun in Abuja, regretted that fraud cases in the number one bank in the country smacks of lack of watertight regulatory environment.

A development Economist, Mr. Odilim Enwebara, and the Co-ordinator of Human Rights Writers Association (HURIWA), Mr. Emma Onwubiko, in their separate reactions called for the reintroduction of financial intelligence agency as an independent body outside of the Economic and Financial Crimes Commission (EFCC) to provide oversight supervision of CBN.

For instance, Enwebara said, “while I strongly welcome the proposal to quickly probe the banks (CBN and commercial banks), I still believe that the entire banking and financial sector, starting with CBN, should be completely  reformed if we don’t want to continue to allow some mean fraudsters to run down our economy with impunity.”

He advocated the suspension of key CBN officials implicated in the scam and their replacement with a caretaker team to take charge its business pending the completion of both the probe and the reform, stressing that without this step, those running the CBN will obstruct any reform effort.

“For this to happen, the President should urgently set up a powerful ‘Presidential Advisory Committee on Banking and Financial Sector Reform.’ This has become urgent for us to have a credible, quasi-patriotic and professionally pro-real sector banking and financial sector.

“The truth is, there is no way this administration should expect great success in its agenda to turn around and industrialise this economy without having the banking and financial sector pursuing these same goals.

“Franklin Roosevelt’s success in overhauling and reengineering the US economy  couldn’t have been possible without his government first embarking on a series of banking and financial sector reforms.

“Like President Roosevelt, President Buhari should conduct a forensic reform of the country’s banking and financial sector (CBN, SEC, NSE, NDIC, commercial and investment banking),” he said.

Also, Onwubiko said: “The fraud that has a far-reaching implication in such a way that foreign investors may be weary of bringing their capital to a country whose central bank is so easily vulnerable to external crimes such as advanced fee fraud. What it shows is the absence of a watertight regulatory environment within the CBN. This calls for a renewed action by the Presidency and the National Assembly to reintroduce the financial intelligence agency as an independent body outside of EFCC to provide oversight supervision of CBN and other financial houses to check the excesses of other directors and governor of CBN and guard against such easy manipulation by international syndicates.”

Meanwhile, the Central Bank of Nigeria (CBN) has made some clarifications on the recent suspension of some of its personnel following the fraud it uncovered and aborted last week.

Answering questions from journalists in Abuja, yesterday the bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, explained that the suspended personnel had to undergo bank’s administrative procedure because they handled the routine processing of the said payment.

Mr. Okorafor, who reiterated that preliminary investigations so far had not revealed any accomplice within the bank, noted that management had to suspend the officers in order to allow unfettered investigation into the matter.

GTBank declares N120.7bn PBT for FY 2015 

GUARANTY Trust Bank (GTBank) has said that its financial results for the year ended December 2015 remained impressive as Profit Before Tax (PBT) rose to N120.7 billion representing an increase of N4.3 billion or 3.7 per cent over the N116.4 billion reported in the corresponding period of previous year.

The results released on the floor of Nigerian and London Stock Exchange showed a gross earnings of N301.9 billion and an increase of 8.4 per cent from the N278.5 billion recorded in the same period of 2014.

A review of the 2015 results, however, showed positive performances across all financial indices, reaffirming the bank’s position as one of the most profitable and well managed financial institutions in Nigeria. In terms of value creation for its shareholders, the bank recorded pre-tax ROAE of 31 per cent and ROAA of 5 per cent respectively.

The bank’s balance sheet remained strong with 7.2 per cent growth in total assets from N2.36 trillion in 2014 to N2.52 trillion in the year under review. Loans to customers grew by 7.5 per cent to close at N1.37 trillion from N1.28 trillion in 2014.

Global Islamic finance assets now $2trn –SEC boss 

By Omodele Adigun 

THE Director General of Securities and Exchange Commission (SEC), Mr Mounir Gwarzo, has put the total assets so far managed by the global Islamic finance industry above $2 trillion (N394 trillion).

Gwarzo disclosed this Monday at the second Regional Roundtable on Non-Interest Capital Market in Sokoto.

According to him, the global sukuk market has continued to witness remarkable growth since the 2008 global financial crisis as its annual issuances have grown from $15 billion in 2008 to almost $120 billion in 2014. Gwarzo said that the focus of the roundtable was on Sukuk, one of the components of the Islamic financial system, saying that while most people identify capital markets as an important source of medium-to-long term capital, few realise the amazing potential of capital markets to serve as a catalyst for financial inclusion.

“SEC is determined to unlock this potential of the Nigerian Capital Market. In particular, we are aware of the need to deepen the non-interest capital market space. This is to enable millions of Nigerians and people of faith to invest their savings ethically. Investors worldwide are increasingly allocating their resources into Islamic finance products,’’ Gwarzo said.

The SEC boss said last year was widely considered a landmark year for Islamic finance, especially with landmark debut sukuk issuances by countries such as the UK, Hong Kong, Senegal, South Africa, and Luxemburg. And the year also witnessed continued strong interest from key markets of Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets like  Turkey and Indonesia. There is no doubt that the Sukuk market is emerging on a global scale as a viable alternative source of funding.

In Nigeria, Gwarzo said SEC has implemented a number of reforms aimed at deepening the non-interest capital market.” In particular, we issued rules on Islamic Fund Management as well as rules on Sukuk issuance. These two legal frameworks have encouraged Islamic product innovation with the registration of five ethical/Shariah compliant funds and the issuance of Nigeria’s first ever sub-national Ijara Sukuk by the Osun State government in 2013 which was oversubscribed. We are also considering modalities for setting up a Sharia Advisory Council as a body of experts to advise SEC and the market on non-interest product and their applications,” he said.

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