Interference by bank owners caused crisis ' CBN

The Central Bank of Nigeria on Thursday, said interference by bank owners in the running of some Deposit Money Banks resulted in the recent banking crisis in the country.The apex bank noted that some bank owners exerted unnecessary influence on the management of their banks, adding that this hampered the smooth operation of the affected DMBs.Speaking in Lagos at a stakeholders conference on the significance of good corporate governance, the Deputy Governor, Financial System Stability, CBN, Dr. Kingsley Moghalu, said the regulatory bank stopped the development by removing some directors and owners of the banks.He said, There should be a clear separation between ownership and control of a bank. In fact, it is important to note that the lack of distinct separation between ownership and control in some of our banks led to the recent crisis in the banking sector of our economy. As a result, the CBN made it mandatory that no director can occupy that seat for more than 12 years.Moghalu stressed that the apex bank would ensure that banks adhered to the stipulated principles guiding their operations in Nigeria.He, however, called on other regulatory bodies in the financial system to sanitise their sectors, noting that efficient corporate governance should be enforced by government agencies in companies in their sectors.He said, I will like to use this medium to state that the Securities and Exchange Commission and other key regulatory bodies should play stronger roles in ensuring compliance in their sectors. They should be more robust and forceful in pushing this motion, just as the CBN did with the banking sector. The Code of Corporate Governance must not be compromised, if we must get things right in this country.The Director-General and Chief Executive Officer, SEC, Ms Arumah Oteh, urged board of directors of companies to always aim at improving their firms. She urged board members to desist from unproductive conducts and activities perpetuated in connivance with chief executives of companies.According to her, the commission will not take lightly any acts of misconduct against the standards of the countrys Code of Corporate Governance.Oteh, who was represented by a SEC commissioner, Mrs. Daisey Ekimeh, stressed that boards and managements of companies should also take risk management seriously, adding that this would guarantee some level of success for their companies.It is a known fact that good corporate governance must consider risks in business. Otherwise, that venture may be heading for a bleak future, she said.
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