This write up is essentially a lamentation on how banking values and principles have changed for the worse since the entry of new generation banks to the industry in the late 1980s and early 1990s, when the regime of General Ibrahim Babangida liberalised banking business. He indiscriminately issued banking licenses, which is a privilege not a right to people that later turned out to be cowboy bankers, conducting banking business without adhering to traditional principles and values for which bankers are known worldwide.

There was a time banks and bankers were synanimous with conservatism and integrity. Like lawyers of old, you hardly see bank managers in public or social gatherings. You can only catch them in churches or mosques where they go to worship the Almighty God, the creator of heaven and earth. Bankers were ranked pari pasu with priests, pastors, imams, in trend of godliness and integrity. You see bankers listed as persons eligible to attest to the character and suitability of an applicant for employment or prospective student seeking admission to secondary or tertiary Institution.

It was all these societal revered recognition of bankers that lured me into becoming a blanker, even though I read Accountancy at the University of Nigeria Enugu Campus, driving me away from my ambition to become a renowned Chartered Accountant.

The reader can imagine how excited I was, when as an NYSC member serving in old Borno State, I was posted to the Central Bank of Nigeria, Maiduguri branch in August 1978 for my primary assignment. I was excited because I was on course, professionally speaking because from what we learned in the University, bank lending starts where Accounting ends. Sadly, banking practices and values today is radically different from what it was in time past. Not anymore.

Technology has turned banking to something else, moving banking away from what it used to be. Lack of adequate enabling banking law in an era of technology and electronic banking compounded the matter by attracting all kinds of people to the otherwise noble profession. Unlike before, you don’t need to train for one year, as I did in United Bank for Africa Ltd, from August 1979 to July 1980 before being confirmed an officer. All you need now to become a banker is a degree in any discipline and you just know how to punch computer and you become a bank officer with little or no training.

Things have become so bad that one of my clients out of frustrating experience with a bank put it this way, “bankers are now thieves and thieves are bankers” I tried to defend my profession but he shouted “how can I lose N10 Million from my account through Internet banking channel transfer when no Internet banking application (app) is linked to my account. I have only my ATM card for withdrawals and never used USSD to make any transfer?” That meant fraud has been committed in his account since he didn’t authorise the transaction.

This write up is a clarion call to banks and bank employees to return to the good old days when honesty and integrity were the basis of conducting banking business. Integrity was ranked far above first class honours or second class upper division from the University.

That brings us back to lack of honesty and integrity in service delivery by banks as institutions. We shall discuss first, lack of integrity by banks in obeying regulatory directives in rendering banking services and then lack of integrity by banks in personnel management matters.

It is indeed a shame that the Central Bank of Nigeria (CBN) had to wield the big stick and fine some banks the sum of N150 million each for failure to load their ATMs with cash during the 2024 festive season. It is shameful because it exposed banks to lack of integrity not to honour it’s promise of rendering uninterrupted cash payment and withdrawal services to their customers.

As a regulator, the fine is in order. What is not in order is for the CBN to be the beneficiary of the fine because they were neither inconvenienced nor did they suffer monetary loss during the period.

The proper thing to do is for the CBN to order banks to pay monetary compensation to their customers for each day they were in default. That would have been an equitable intervention the bank customers reserve the right to sue the banks for breach of contract which would have resulted to damages running into billions of Naira in damages. That action could destabilise the banking system.

Secondly, unlike times of old, when banking was regulated, there seems to be total lack of integrity and discipline by banks in personnel management and administration in the new era, which is moving backwards. At that time, there was discipline in personnel management and banks were better organised.

Every employee of the bank, from top to bottom was captured in the payroll of the bank. All staff across board were entitled to medical allowance, paid leave, and bonus allowance. Employees were free to join banking sector labour unions, and engage in collective bargaining with bank management on salary and welfare review from time to time.

With the advent of de-regulated banking in late 1980s to the present, this personnel policy model has been completely abandoned. Banks now prohibit employees from joining labour unions. All staff are no longer on the payroll of banks. Banks now have contract staff, outsourcing some departments like security, secretary, drivers etc to personnel management consulting firms.

According to them, they want to focus on the core business of the bank. This is where they got it completely wrong. Banking business is information business. That is why bank employees swear to an oath of secrecy on engagement. Information available to anybody in the banking value chain has money value. Divulging such information to unauthorised persons can lead to losses to banks.

With the practice of contract staff with no annual leave, no medical facilities, no training opportunities, banks have become slave drivers not employers of labour. Banks want to save cost, right?” Calculate the amount of fraud going on in the banking system since the era of contract staffing and setting of unrealistic deposit and profit target for employees. Once they can’t meet the target, they commit fraud, which they call “I quit money” in one of the banks.

It pains me that whenever I go over the counter to transact business in any bank, I become a teacher. Many bank staff are empty headed, lacking in knowledge of basic banking principles. Many of them cannot appraise a lending application properly and you see them reject applications which are bankable and would have been approved. This is because banks expose their staff to limited training for effective service delivery.

From media reports, bank fraud is on the increase because the contract staff are not loyal to the bank. Why should they be loyal to the bank when they are not on the bank’s payroll and have no contract of employment with the bank. They receive far less remuneration than banks pay personnel contractors and have no hope for promotion to a higher rank.

The CBN should please intervene and call banks to order. The regulator should issue a circular scrapping contract staffing in banks. It is very dangerous to entrust money or money instruments to someone who is not loyal to the bank. Contract staffing is not suitable to banks unlike manufacturing and oil and gas companies. What the CBN de-regulated is foreign exchange market not personnel management matters.

The CBN has the statutory power to maintain a sound financial system. Sound banking system is not driven by making monetary policy only. There will be no sound banking system when the personnel policy of banks lead to disgruntled and dis-satisfied that commit fraud every now and then.

A return to old model of personnel policy where all bank staff are on the bank payroll is urgent because personnel management was not de-regulated. Lack of integrity in personnel management has led to worsening underemployment and bank fraud which is not the objective of banking regulation and governance.

Once again this write up is a clarion call on legislative arm of government to support the banking industry by enacting a law prohibiting outsourcing of staff in the banking industry which is one of the largest employers of labour.

The banks are declaring outrageous profit every year and can sustain personnel cost of putting all employees on their pay roll with compensation packages that is commensurate with the performance of the industry.

Enyinnaya, Author and Fellow, Chartered Institute of Bankers can be reached via:
[email protected]