The Nigerian Banking executives accused of perpetuating banking frauds worth billions of dollars have been put on the stands to defend their roles in denting the Nigerian Economic system. The bank executives had run up bad loans totalling a collective 1.14 trillion Naira and as part of the effort to stabilize the country’s economic system, the Nigerian Central Bank will today Tuesday, September 1, 2009 host the 210th meeting of the Monetary Policy Committee.
According to economic experts, the meeting will review developments in the domestic and international economy since the last meeting held on 7th July, 2009. The economic meeting is scheduled 24 hours after the cases including fraud, giving loans to fake companies, lending to businesses and business personnel with whom they had vested interests and conspiring with stockbrokers to drive up share prices, was brought against four banking executives in court. Reports claim that one of the indicted banking chief executive is still missing; he is on the run and wanted by Interpol- anti-corruption police.
The involved banks were found to have low cash reserves because of bad loans, yet the indicted bank executives have all plead not-guilty to the charges brought against them. The country’s Economic and Financial Crimes Commission (EFCC) says nearly $300m of bad debt has been recovered, but that billions are still outstanding. Nonetheless, the Nigerian Central Bank moved to rescue the banks with a $2.6bn government bail-out and shares in the five banks, which accounted for 40% of the country’s bank credit, have been suspended. Despite the financial scandal, the governor of Nigeria’s Central Bank, reassured Nigerians that the banking system was sound.
While the bank executives are facing the law, the central bank had warned that the customers who colluded in the banking scandal would face the law as well. “Following the recent regulatory action of the Central Bank of Nigeria on the five banks, it has become necessary, to use this medium to request the following defaulting customers of the affected banks to pay without further delay their indebtedness, failing which the banks will take all appropriate legal actions to ensure repayment. These are the largest debtors and the CBN will continue to publish the list of defaulters on an on-going basis,” a statement from the Nigerian Central bank read.