Ben Chii Onyido is the Group Chairman and Chief Executive Officer of Lincon Luther Consult Limited, a top-level player in human capital development for the banking sector. He has over 33 years experience in core central banking with strong background in key areas of research, policy, monetary and financial analysis, currency management and operations. In this interview with BISI ALABI WILLIAMS, he explains why the banking sector went through years of abuse with little or no checks and balances.How would you assess Nigeria's banking sector after recent attempts to clean it up'The financial services industry has recorded significant milestones in its evolution, in terms of scope, number and size of institutions. But I will beam my searchlight on the banking sector. The payments system, which is synonymous with the banking system, has witnessed giant strides. The best thing that has ever happened to this country is the introduction of electronic payments. With automation, activities have become simplified. The transfer of bulk payments real time takes seconds and minutes instead of days and weeks. The number of payment instruments has increased and people now have choices. Today, one finds the ATM in almost every corner in commercial centres, even though some of them refuse to dispense cash at critical times, there are web or internet and Point-of-Sale transactions while mobile payments have been boosted by the increase in teledensity.Upcountry cheques, which took 21 days to clear years ago, now clear in three days nationwide and there are indications that the clearing period will be reduced to two days for Lagos area. The number of bank branches in the country has increased exponentially from a mere 160 in 1960 to several thousands. These strides notwithstanding, there is still substantial room for improvement to achieve the desired financial inclusivenessto cover the rural population and the vulnerable and meet the Vision 2020 target. In all these, capacity in the banking sector necessarily has to be upgraded through manpower training if the sector is to cope with the emerging challenges. The supervisory capacity of the regulatory authorities also needs to be reviewedOver the years, there were monumental infractions of the rules governing banking, so much that there were collateral damages; were the regulators not applying the rules'Every society or human organization is governed by laws, which guide the conduct of people for orderly behaviour and societal growth. The banking industry operates in a regulatory environment, which ensures that the practitioners play by the rules.The Banks and Other Financial Institutions Act (BOFIA) is a compendium of the rules and regulations,which the financial institutions, their management and other staff are expected to observe. These regulations guide the daily activities of the practitioners.The reasons for infractions or non-compliance may be one or all of these factors - ignorance and lack of awareness as well as outright violation of the provisions of the law. Violation with impunity may occur where the gains from a particular transaction substantially outweigh the cost of the sanctions for non-compliance, as had been the case with some banks, especially in foreign exchange transactions. The real issue here is that of lack of awareness and ignorance of the existing rules among individual staff. This position is buttressed by the findings of our survey of the banking industry, which establishes a lacuna. A practitioner who is versed in banking practice but is deficient in banking laws is not thoroughbred. In other cases, one finds bankers who are not versed in banking practice and cannot even explain what theydo. This is worrisome. We are concerned about this negative trend in the industry and are driven by passion to bridge this knowledge gap.Do you believe that the CBN has sincerely done enough to ensure that stronger banks emerge and that banks sincerely play by the rules'Yes, the CBN has done much in repositioning the banks and ensuring they are strong and capable of financing big-ticket projects that impact the economy positively. You will recall that the bank consolidation of 2005 was a giant stride, which effectively reduced the number of banks, especially through mergers, from about 90 to 25 strong banks with strong capital base. The number has even thinned down to 21 as at today.Secondly, the CBN audit revealed weak assets of some banks while the Asset Management Corporation of Nigeria (AMCON)has taken over these toxic assets, cleaned out the balance sheets of the affected banks and repositioned them. Some of these banks have started reporting profits. Through robust risk management and risk-based supervision, the sector is stronger. Of course, there are always sanctions for deviant institutions. The new banking model unveiled by CBN requires banks to shed their subsidiaries and become less exposed to risks while concentrating on real banking.While it is true that banks depend on marketing their products, gaining competitive advantage and meeting targets, some banks are accused of employing unethical marketing tools; when can we say marketing is excessive'There is absolutely nothing wrong with banks marketing their products, gaining competitive advantage and meeting targets, provided they follow conventional practice and play in the most professional manner. Let's be frank, as business concerns, the objective of banks is to maximize profit. The issue is to get them play by the rules and with decorum. I do not believe that banks should de-market their peers in order to gain competitive advantage, neither do I subscribe to the idea of deploying young boys, girls and women to the streets, supermarkets and offices to meet deposit targets. In my days, this trend was not observed.I believe that banks should invest handsomely in product development and human capital through focused training to enable bank personnel understand the nitty-gritty of their job and become more effective and professional in achieving the objective of profitability for their employers. In fact I am amazed at the rate the banks scramble for and rely on public sector funds. They pay little or no interest on such funds and still turn round and use those funds to buy government securities. Perhaps an easy way the CBN can check excessive growth of bank liquidity is to move government deposits from the banks to CBN as an effective monetary policy tool and still achieve the same result as the use of the cash reserve requirement (CRR) with less destabilizing consequences.As a monetary and financial analyst, what are your views on the capital market and money market' Would you say the clean up in the stock exchange is helping to bring about sanity'The capital market, the barometer for measuring economic progress, hopefully is on its path to recovery. Activities in the market are dominated by banking stocks. There is no indication yet to suggest that the trend will change in the near future. Let me add that a purposeful clean-up will be that which is geared towards restoring investor confidence. Secondly, the stock market reacts easily to negative pronouncements, comments and actions. Sustained reforms and calm in the market are imperative because the capital market loss is the money market gain and we need a vibrant capital market to support the transformation agenda of the present Administration.Talk about the money market. Activities in this market continue to swing with the monthly Federation Account Allocation and developments in the foreign exchange market.Would you say there is enough mentoring and giving back to the industry by the older generations like you'Yes, mentoring through banking education and training to make bankers knowledgeable and alive to their responsibilities is key. During my days, bankers were respected and admired. They were patient and painstaking. Today, most bankers are on the fast lane. You find some bankers rising to the pinnacle of their career in a matter of a few years, not by their expertise and professional standing, but because of the deposit targets met. This category of bankers are not thoroughbred, they are lacking in banking rules and poor in banking practice. The experienced bankers are bowing out of the industry and younger ones are taking over but they need to have a good hands-on to make the industry a better place than we met it.What is your core challenge in terms of manpower and human capital development'Our major training thrust is in maintaining a pool of highly skilled personnel for our clients. We stratify our human capital development into intrinsic and extrinsic human capital development needs. This is because we believe that for any business to actualise its objectives and realise its visions, internal and external personnel must be at similar levels of understanding and integration. Consequently, we plan on training the financial services providers from the least level of management to the non-executive board membersThe uniqueness of what we do, however, is the passion to deliver human asset knowledge empowerment for the financial services industry through the development of financial services users, so as to ensure greater buy-in by all stakeholders in financial services rendition and usage. This is the approach that would stem the endemic gap in the understanding between financial services providers and users that has kept financial products perpetually at the bottom ladder of utilisation and left the financial services industry at imperfect market levels within Sub-Saharan Africa.Various quality programs suitable for particular industries and specific corporate organisations shall be developed and deployed through target client delivery and open market institutionalisation.Our training programs are handled by well-tested local and international faculty members and facilitators; our goals areto ensure that our clients' most valued asset- the human capital is continuously and consistently upgradedto meet job requirements and attain international best practices and therefore, enabling them to compete favourably in their specific industries.
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