Why we resigned from NESG – Bank CEOs

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The public row between the Nigerian Economic Summit Group (NESG) and the Central Bank of Nigeria (CBN) has continued to generate reactions within the business community as one of the CEO’s of Nigerian banks explained why they quit the board of NESG in protest against the public criticism of the apex bank.

According to THISDAY report, two of the CEOs condemned the NESG leadership for not getting inputs from critical stakeholders before going public with such a sensitive issue.

“Given that we have such full access, how can we turn around and issue a statement criticising policies that we are part of the consultative process? If we have concerns we have full access and platforms to share them with policymakers. How would the NESG issue such a statement without the input of Board members?

“In issuing that statement without consultations with the board, the NESG left my continuing participation untenable resulting in my resignation,” he said.

It would be recalled that the NESG, in a Press Statement on Wednesday frowned at the provision of “immunity clause” in the recently passed Bank and Other Financial Institutions Act (BOFIA) 2020, saying such provision is draconian, totalitarian and inimical to the development of a stable and transparently regulated financial sector.

The Release also criticised the recent macroeconomic policies of the CBN, particularly the allegation of “clear disparity” between the huge sums of money disbursed by the apex bank as intervention fund in the agriculture sector vis a vis the food production in the country.

The CBN, on its part, fired back, and described NESG’s allegations as “frivolous and curious”

In its response to the allegations of seeking immunity for CBN officials, the bank said the provision referenced by NESG already exists as Section 53 in the old Act, which is now Section 51 in the amended Act passed by the National Assembly.

But even at that, the bank claimed that the provision of Section 51 does not confer immunity on the CBN Governor, but rather, the provision protects the Federal Government, the Central Bank of Nigeria and their respective officials against adverse claims for actions or omissions exercised in good faith by virtue of their powers under BOFIA and other specified statutes including the Central Bank of Nigeria Act and regulations thereunder.

Also responding to NESG’s criticisms, Chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Senator Uba Sani (APC Kaduna Central) expressed disappointment at NESG’s position, wondering why its members failed to show up at the public hearing where the contents of the bill were debated.

“For the avoidance of doubt, the specific provision of BOFIA 2020 that NESG may have been told confers immunity on CBN was Section 12 (6) which states that: Notwithstanding the provisions of this Act or any other enactment, no restorative or like order howsoever described, shall be granted against the Bank or the Governor in any action, suit or proceedings in relation to the revocation of a licence by the Bank under this Act, and the remedy of any claimant or applicant against the Bank or the Governor in any such action, suit or proceedings is limited to monetary compensation not exceeding the equivalent of the value of the paid-up capital of the bank at the time of the revocation of its licence.”

“This is a new clause, not contained in the existing BOFIA law. The limits of the redress that can be sought/obtained in the event of a challenge of a revocation of a bank’s license were not provided for in the repealed law. The proviso does not state that the CBN Governor is immune from being sued in the case of revocation of a bank’s license.

“However, the proviso restricts the limits of the claims that can be made against the CBN to monetary claims which are subject to the paid-up share capital of the bank at the time of the license revocation. It is important to note that the new law does not give the CBN Governor leeway alone in the revocation of a bank’s license”, he said.

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