Bank officials responsible for forex violations should be punished; not the banks
The recent Central Bank of Nigeria (CBN) hammer on some banks over forex infractions once again raises a troubling spectre in what has become an endemic culture of corporate malfeasance among operators in the financial services sector. We refer to the disclosure by the apex bank last week that 12 banks refused to sell forex to genuine small and medium scale enterprises (SMEs) that met disbursement requirements after accessing over $300 million offered to them via the SMEs wholesale forex window created last month.
For penalty, the apex bank barred them from that forex window.
Coming at a time when fiscal and monetary authorities are striving valiantly to steer the economy out of recession, this latest infraction, to all intents and purposes, is not only inexcusable, it comes as a dampener of sorts on those efforts. It is worth recalling that the apex bank actually designed that forex window to assist the SMEs import approved finished and semi-finished items.
With a cap of $20,000 for an enterprise per quarter, the package was meant to put the sector, long recognised as marginalised, in good stead at a most difficult time. For, while Nigerians are ordinarily familiar with the penchant by our financial services operators to routinely cut corners, this latest act, while emblematising their predilection for quick, unmerited profits, is revealing of the extent to which they would go to keep the larger economy down. That any bank would seek to hamstring what is designed as lifeline to that important segment of the economy is nothing short of sabotage deserving of exemplary sanction.
The problem unfortunately goes beyond a group of banks refusing to play by the rules. Of course, the infraction must be situated where it truly belongs: at the heart of the anomie that has dogged the financial services sector. It explains why the naira is on a free fall despite the considerable boost in the forex supply; the current stagflation threatening to bowl the economy over and why the series of measures designed by the CBN to get the economy on an even keel have remained largely ineffectual.
To the extent that such glaring delinquencies – and that is what they are – have done so much to erode confidence not just in the financial system but in the economy as a whole, the penalty of barring the offending banks from accessing forex from the newly instituted SMEs Forex Window would seem to us like a slap on the wrist. The least we expect is for those responsible for the infractions to be identified for individual sanctions. For, while erring officials have been known to hide behind the anonymous walls of their institutions to escape appropriate punishment, the result has been the plague of impunity and the chaos it has engendered in the system.
It is high time the country made a clean break from such ignoble traditions. Yes, the economy needs all the help it can to get back on its feet; it is time to terminate the activities of the club of abusers who do nothing else than prey on the system for profit.
We urge the CBN to constantly keep its eyes on the ball. At a time forex supply is still relatively volatile, that is the least it can do. While ensuring that those who genuinely need forex for business are availed it, it must be seen to demonstrate zero tolerance for abuses of any form.
