bank reforms

This banking reform by the current Central Bank of Nigeria's Governor, Mallam Sanusi Lamido Sanusi is bringing up lot of issues that are detrimental to the growth of the economy. I think if these issues are not loooked into and resolved by the Acting President Goodluck Jonathan, the economy would takes year to get it back on track. Has the economy derailed? YES.
The Governor of Central Bank of Nigeria when appointed sent auditors/examiners to look into the books of some banks in Nigeria for long non performing loans. He started with ten banks and after some weeks, the verdict came that five banks were distressed. The banks are Union Bank, Iintercontinental Bank, Oceanic Bank, AfriBank and Finbank. Immediately, without allowing the management of those banks to defend themselves, out they went.
The Governor without approval of the Senate of the Federal Republic of Nigeria, printed new Naira notes and imported them to bail out the 'perceived' distreesed banks. Also the management and in some banks the board members were labelled criminals and handed over to Economic and Financial Crime Commission for prosecution. Advisers/Managing Directors and directors were appointed for the rescued (that is the new slang instead of distressed) banks. The banks were to adhere to banking guidelines and give full disclosure of their activities.
The guidelines were 'good' but the noise accompanying the removal of the Managing Directors and Directors of those banks had a negative effect. Depositors fearing the repeat of trapped money in distressed and failed banks quickly started withdrawing their money. The Governor and his lieutenats have to start campaigning that depositors should not withdraw their money that the banks have been bailed out of distress and their money is safe. Did that work? Somehow it did. The enlightened banking public returned their deposits. Later sentiment and loyalty made others to return to those banks. But are things the same way that it was before? NO.
The price paid for these banking reforms by the economy and the people is really high.
First, confidence reposed on the banking industry by the public was shattered as the CEOs were sacked. Even Nigerians living abroad that used to remit money back home for developmental projects stopped. The capital inflow into Nigeria stopped because of the fear of money being trapped and not used.
Secondly, about ten thousand (10,000) bank workers have lost their jobs since this reforms started. The staff left untouched do not know when the matching order to leave will come but the reduction in salary has come. I went to one of the affected banks recently to conduct a transaction and was shocked at the empty tables around. One of the lucky staff said the tables would be removed soon since employing new staff would not be immediate. Even the banks that were given clean bill of health have embarked on cost-cutting measures including reduction of salaries. An in-law working in one of the affected banks told me their other emoluments were stooped so he had to ask his driver to go. The Indian man i worked with before told me that the survey he conducted showed that for every one Nigerian employed, Four others are dependent on that one employee. So 10000 x 4 means 40000 Nigerians are out of jobs and reular income. This is sad. Banks which used to employ fresh graduates have stopped hiring and new branches are not opened. We are all waiting and hoping and praying.
Thirdly, credit to the manufacturing industries and fuel marketers have stopped. No more loans to import fuels. Now we have long queues at the the Fuel filling stations. Time and energy expended in buying fuel and diesel could have been used in something else but in Nigeria we have to suffer because Sanusi is sanitising or witch hunting those who opposed his appointment as Governor in the banking industry. Banks are recalling loans that are performing and are scared to give out new loans to businesses.
Fourthly, With the PHCN being perpetually out of gas and no fuel to power generators, our health is affected by Sanusi's banking reforms.
Did the new CBN Governor, MALLAM LAMIDO SANUSI acted wisely in these reforms?
My answer is NO.