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Providing further illumination on the new CBN policy, Mr. Ede, inadvertently perhaps, released a bombshell about the Nigerian banking industry during that encounter with Punch editors. He declared: "Let me tell you what happens in the banks. The Chairman takes a loan, he does not pay and the bank writes it off" (Punch, August 19). The CBN deputy director of corporate affairs, Mr. Ede, alleged that Nigerian bank shareholders never lose money when the CBN and the National Deposit Insurance Corporation liquidate their banks. Hear him: "before you liquidate the bank they would have made their money and gone. They take loans, their children take loans, their relations take loans and their companies take loans that the banks write-off." Ventilating the hopelessly corrupt and the criminal world of the Nigerian bankers further, the CBN corporate affairs deputy chief said that there "is no bank owned by one person or one family that has not abused the credit system. There is no bank owned by one family where corporate governance is instituted" (Punch, August 19).

First of all, it is a shame that Mr. Tony Ede who has been with the CBN "forever" is only now remembering to report this terrible crime to the business world. Where has he been all these years that the Nigerian banking industry has been rotting in torpid criminality? For the greater part of my career so far as a writer on Nigerian public affairs, which spans well over two decades, I have always seen Mr. Tony Ede's name associated with the Central Bank of Nigeria, one way or the other. Why is it that it is only now that he is willing to expose this horrible crime in the Nigerian banking system? Does he want the world to applaud him for coming forth this late to report a prosecutable crime? This is embarrassing for this otherwise credible financial technocrat, to say the least.

The dangerous crime of this kind of banking business seems obvious to anybody who has any iota of commonsense and moral outrage left in him. I mean; if a bank is liquated as a result of unbearable debt-burdens of bad loans imposed on it by its owner(s), is this not a clearly financial crime, the likes of which are prosecuted through out the world? In fact, if this has been happening for years without the CBN chiefs raising a voice of outrage, can they not be charged as complicit in the crimes? It seems very clear to me that if a private bank gives a huge loan to the owner or to any member of the owner's family or friends, such a bank has already crossed the line of probity and dwelling well within the domain of a criminal act. And this is what central banks as well as securities and exchange commissions throughout the world try to accomplish for their peoples. It is the duty of these regulatory institutions to discover when banks are embarked on criminality, or simply playing games, and administer appropriate punishment as remedy. Unfortunately, this seems not to be the case in Nigeria. The revelation of Mr. Ede tends to suggest that the role of the CBN is to belatedly and helplessly cry to the press over some already spilled milk in Nigeria's banking industry.

It is the duty of these regulatory bodies to serve as a watchdog over crimes of this nature that tend to rear up their criminal heads in the banking industries across the world. When these bodies and their officials fail to fulfill their statutory duties as the police of the financial sector, their leaders tend to expose themselves to charges of professional misconduct and perhaps, subsequent prosecution as financial crime accomplices. This is why the position of Mr. Tony Ede, despite his overly belated efforts to expose this potential crime, may be murkier than apparently so. It could be that Mr. Ede is in fact a member of the old brigade at CBN who condoned heinous financial crimes of the sleazy banks and bankers of Nigeria. Perhaps his moral voice of protest was crowded out by those of the many others who were active participants in the potential and real crimes of those shady banks and criminal bankers. But there is hardly anyway he could this late come clean of the mess of the periods.

But let us return to the revelation of Mr. Tony Ede, the CBN guest of the Punch Newspapers this past week. If one could expand Ede's claim a little, he is revealing that many a Nigerian bank has failed simply because some high officials of the bank took big loans from it and refuse to pay them bank. The bank's management on its part, reciprocated by writing the huge loans off thereby precipitating credit and capital evaporation in the bank, which ultimately results in the bank's failure and subsequent liquidation by the Central Bank of Nigeria and the National Deposit Insurance Corporation. In other words, bank failures in Nigeria are not necessarily as a result of economic forces, rather some bank owners and officials embark upon some criminal activities that result both in the betrayal of the trusts of their customers and that of the entire nation, and ultimately in the wrecking of their banks.

Does this kind of a scenario cause some kind of a stomach churning to anyone as it does to me? Clearly Mr. Ede does not say in the Punch report what happens to a typical bank that finds itself in such a predicament. But the much he revealed seems to provide us enough information to paint the portrait of a typical financial bank crime in the nation of Nigeria. It involves a web of participants ranging from the CBN officials who look the other way when a crime is being committed by the banks it is supposed to oversee, to some bank owners who work in criminal collusion with its management staff to constructively and concertedly loot and destroy a financial enterprise that has entrapped the savings of unsuspecting citizens of Nigeria. The ultimate goal seems to be to entrap as much capital as possible in the ruse bank and carefully siphon it away through bad loans to pre-selected bank officials.

Arguably, a typical crime of this nature dates way back to the period preceding the licensing of any particular bank that is contrived to fail and be liquidated at a particular point in time in the future. Perhaps also the whole criminal scheme begins by its linchpins trying to get a particular bank licensed by CBN and SEC that would later be used at a certain time in the future for fraud. Whatever could be pinpointed as the point of origin of any failed bank in Nigeria, it seems that it would have to involve a web of potential criminals working together to execute a complex financial crime. And this is typical of most corporate crimes especially in Nigeria. They usually need a web of participants at different levels to pull them off.

So, despite the fact that some members of the CBN and other regulatory bodies might start to come forward now to cry foul on the rotten system; although some CBN officials who had in the past participated in enabling such criminal banks and bankers obtain their licenses might turn around very soon to try to exonerate themselves from the sleazy situation, perhaps at the behest of a new governor of CBN, the fact is they cannot successful do that. No Nigerian should be deceived by their new efforts to wear a cleaner hat in order to fit into the new mold and philosophy being bandied by CBN Governor Soludo. As far as morality and decency is concerned, the words of any long-time official of the CBN and other financial regulatory bodies in Nigeria must always be taken with a grain of salt. Any long-serving official of the Nigerian apex-bank will have a hard time convincing anybody or exonerating him/herself from the sleaze that has been dominating our nation's banking sector in the last three decades.

For brevity sake, let us consider a typical private bank that has perhaps been programmed by criminals to be liquidated at a particular point in the future. Such a bank usually begins by claiming to be doing normal businesses with unsuspecting customers. They receive deposits from individuals, companies and government agencies. But at a certain point in time when these criminals who usually have an inside-track knowledge discover that the capital base of the scheming bank has grown quite considerably, these masterminds of the scheme who may be predominantly high officials of the bank or their relatives and surrogates apply for big loans from the bank.

Being well connected with the powers that be, the processing of their applications cruises through. Many of the deliberate and cautionary steps, which would otherwise apply to big bank loans, are tactically set aside or sidetracked. The loans are quickly granted. But after a few payments, the bank debtors begin to falter in their repayments. Subsequently, they refuse to pay completely claiming that their businesses for which they had taken the loans had bit the rocks and gone under. And since they are usually well connected to the officials of the bank, their stories are taken at their face values. And the bank ultimately declares the loans bad debts, which would categorize them as irrecoverable. Meanwhile, the former debtors of the bank establish other businesses with other names or stash their bank loots overseas in foreign banks. But the bank whose money they had stolen enters into a season of a serious distress as a result of its capital evaporation. And the people whose savings had been tangled in the bank are simply waved aside as unfortunate business people.

However, as the scheming bank begins its distress period, the CBN, NDIC and SEC step in. Since many officials of these regulatory bodies may be in full knowledge of the scheme, they do not care to investigate the matter through and through. They are not usually interested in finding out the truth behind the failure of any particular bank. They are not in the business of apportioning blames, they would claim. All they care about is the empirical data that a particular bank has become distressed since it can no longer meet its credit obligations. The regulatory bodies' solution is equally simple and taken right from the pages of their rulebook. Part of it would claim that if any bank becomes distressed, it should be liquidated. And this is what the Nigerian regulatory bodies would proceed to do with this particular bank in question. They would immediately auction the assets of the bank perhaps to their criminal allies who might be fronting for the failed bank's officials who had hobbled the bank through bad loans. If the CBN and its allied regulatory institutions are generous, they might return to a few of the depositors a miniature fraction of their savings locked down in the failed bank.

This fairly represents the portrait of a typical high-level bank crime in the nation of Nigeria. The hands that are involved and the webs that are created are immense and almost inscrutable. The coalition of such a crime usually includes high-level bank officials and the high officials of the regulatory bodies that are supposed to police them. Until perhaps the recent arrival in the CBN of Charles Soludo, a typical bank crime scheme began as early as the period of the licensing of banks. All the officials who become co-conspirators in financials crimes work together to register so-so banks. They work together also to bring it down at a particular time entrapping the savings of many unsuspecting individuals and government offices through bad loans given to officials of the banks and their relatives. Then they declare the banks distress and refuse to investigate the cause of the distress. And when it is liquidated, the whole assets of the banks go back to the members executing the schemes. What a sordid world of our nation's banking industry!

But in civilized and even less civilized countries, such is rarely the case. And when it happens those involved are tracked down and prosecuted to the full extent of the law provided. In a situation where there is no law in place for such a crime, the perpetrators are held in custody through lesser charges until new laws are made to prosecute them. In many countries that truly practice the rule of law, banks come into existence through objectively established principles. And big loans are rarely given to any high officials of the bank or anybody remotely related or connected to them. Even when such big loans are given and their non-repayments lead to the failure of any particular bank, the debtors never go scot-free. Rather they are prosecuted to the full extent of the law, which could result in the seizure and auctioning of their assets anywhere in the world for the distressed bank to recoup some part of its lost assets. When eventually the technical aspects of the crime are dealt with, the government usually comes down heavy on the criminals with its own hammer that adequately punishes the terrible crimes of financial fraud and contrived wrecking of a people's trusted institution.

It is almost unheard of, at least in the civilized world, that a private bank could be easily wrecked as a result of a few criminal loans made to its owners or its officials and their relatives even as the CBN and the other regulatory bodies look on waiting only to later treat the matter as a mere news report. If this is actually what is happening in our nation, then our economic prognosis is absolutely bleak. This kind of a situation smacks of a criminal inefficiency in the CBN. Such a brazen crime of setting up shady banks only to criminally wreck them at a certain time in the future demands the application of the full weight of the Nigerian law. From this fact alone, it means that the Nigerian business environment is still stinking notwithstanding the hypocritical preachments of the current administration in Nigeria.

How is this type of a bank fraud different from 419 and other heartbreaking financial crimes ravaging our nation today? It is white-collar crime at its worst. The business world must be laughing at Nigeria and the way business is conducted in this wretched country of ours. The mere fact that banks could give out loans in ways that appear not to be strictly regulated in Nigeria shows that Nigeria's business world is still intertwined with our nation's criminal underworld. How come there seems not to be any regulation concerning banks giving loans to their officials and their relatives? I wonder how many decent business people around the world who are reading such stories about our nation would ever risk doing any business with Nigerian citizens. In all honesty, if I were a foreign businessman, I would never risk my business in an environment such as what we have in Nigeria today. The Nigerian banking industry stinks and it is disgraceful.

For Nigeria to become a business-friendly nation, the banking sector, and in fact the financial sector in general, would have to be strictly regulated. The processing of bank licenses would have to undergo a serious revolution. Thank goodness the new CBN governor seems to be a committed and knowledgeable treasurer. He has begun on a solid and principled footing. There is no doubt that Charles Soludo has a noble intention for the Nigerian financial industry. One can only hope and pray that he has the humility and docility to listen to the professional advice of his colleagues from across the world including those coming from non-professionals like us. If he continues with the initial sincerity he has shown at CBN, he might become one of the greatest stories of the second-term Obasanjo administration.

However, Soludo's sincerity, commitment and knowledge would fall apart if he were not able to put in place very strong and almost inflexible regulations concerning the business of banking in the Nigerian nation. First, the CBN governor must convince the Obasanjo administration and the Nigerian legislature to establish independent panels of inquiry to unearth the circumstances that precipitated the failure of every bank that had kicked the bucket since the Gowon-Awolowo edict of economic indigenization in Nigeria in the early 70s. All the circumstances leading to the failures of such banks, all those who took loans from them and never repaid them, all those who bought the auctioned assets of such banks, all the chairmen, board members and prominent shareholders of such banks must be published for the entire world to see that Nigeria has begun the cleansing process in her messy financial sector.

Second, the CBN and other financial regulatory bodies in Nigeria must provide clear and standing principles and guidelines for accepting, processing and administration of bank loans in Nigeria. Whether it accords with free market or not, it should be a crime in Nigeria for any private bank to process an application for a big loan to any of its high officials without the knowledge of the CBN and other regulatory agencies. It should be a law of the financial sector of Nigeria that no high-ranking bank official has the power to process loans to any of their close relatives or to co-sign a loan from his/her own bank to any of their immediate relatives. Also, every application for a big loan must be thoroughly investigated by the CBN to see if the applicant (s) is a front person for any of high-ranking officials of the bank calling the shots from the background.

Third, the CBN and the other regulatory bodies of Nigeria must institute a policy by which anybody or organization that takes a loan from any bank in Nigeria, in fact, anybody or organization, dead or alive, that has ever taken loans from any financial institution in Nigeria and refused to pay back is held liable forever. The legal validity for such a crime should be indefinite. Whenever a criminal of this class is caught, whether dead or alive, he/she must be prosecuted to the full extent of the law. The debt must never be written off but rather bought over by either the CBN or other regulatory bodies. The law must require a bad debtor of this class to file for chapter eleven in order to get a momentary reprieve pending the time it is declared solvent enough to come out of bankruptcy and start paying back what it owes. But never should a person or an organization whose loans from a bank lead to its failure be let out of the hook by the CBN.

The CBN and her counterparts that speed ahead to liquidate a bank after its distress call should assume the responsibility of collecting all the debts owned to it before it went under. It is absolutely untidy and apparently immoral to liquidate a bank or any financial institution for that matter without first assuming responsibility for its assets and liabilities. When the CBN or NDIC assumes the liability of any particular bank, it must not relent until it has collected every penny owed to the institution by its bad debtors. For a CBN to complain as Mr. Ede has done that private banks give irresponsible and dishonest loans that lead to their failures is ludicrous. It only shows that Nigeria's apex-bank is clearly not doing its job.

Fourth, the CBN under the seemingly efficient Governor Charles Soludo must carry out a comprehensive review, perhaps through professional auditing, of every incident in the last thirty years or so, where a bank had written off a big loan as a bad debt. Such a case must be treated as a potential criminal event. The goal must be to extract every shred of information leading to the writing off of such loans, the names of the debtors and the present financial situation of the individuals or group whose loans were written off by the banks. If the CBN and its allied institutions were to do a thorough job of this investigation, they might get a handle over the billions of dollars of Nigerian money that are currently stashed away in private banks overseas. It seems reasonable to suspect that some nefarious Nigerian leaders and bank officials just set up ruse banks, which they later looted through bad loans, which they later lodged as liquids in banks overseas.

However, the greater responsibility for sanitizing the Nigerian financial industry seems to rest squarely on the shoulders of the Nigerian legislature and the Obasanjo administration, especially the law enforcement agencies. The revelation of Mr. Tony Ede has made one thing abundantly clear in my view. There are many financial crimes lying there among the Nigerian elite and waiting to be prosecuted by the Nigerian anti-corruption agencies. All these Nigerian politicians and business people, whose wealth is built on the foundation of their fabulous loans that were written off by failed banks are crying for prosecution by the Nigerian government. All the former bank chiefs of failed banks and their high officials, all the members of the families that once owned banks that later failed, all the former leaders of the CBN and the other regulatory bodies who looked the other way while banks failed in droves, are in my view, waiting for deep-peering investigations into their activities and perhaps subsequent arraignments in Nigerian courts. There is an absolute need for a massive cleansing of the banking industry in Nigeria today. It is evidently clear that financial criminals are walking free on the streets of Nigeria today. Ironically, many of them are in the present government. The question remains: who will bell the cat? Obviously, the young governor of CBN can only do so much! The web of financial crimes in our nation is far more complex and bigger than what he can ever handle. But we must thank him for his efforts so far.

The reality of the present-day Nigeria is that there are not enough laws to cater for the massive cleansing, which the Nigerian financial sector desperately needs today. In a living democracy such should be the number one priority of the Nigerian legislature. Its duty should be to review the socio-political situation of the nation and see that laws that would be needed to ensure that business life was not undermined were all timely in place. If the Nigerian legislators had been patriotic democrats, it would be a no-brainer for them to enact retroactive laws that specifically go after those who looted the Nigerian economy through every aspect of financial crimes that had maxed-out in our nation during the reigns of Shagari, Babangida and Abacha. By now the Nigerian legislature would have enacted several laws that deal specifically with the banking industry in Nigeria. The goal would have been to recoup the several billions of dollars lost during the era of rogue administrations that descended on our nation in the 80s and 90s.

But most regrettably, Nigerian legislators are neither patriots nor democrats. They are a club of former financial criminals and their accomplices who invested their loots from the crime-infested financial institutions of Nigeria in the capture of our nation's political power. This is why rather than make laws that would go after the bad guys of the Nigerian financial sector they are working tirelessly to undermine the little efforts and the great intention of the new administration of the CBN. As our "prophetic" essay had predicted several weeks ago while applauding the re-capitalization policy of CBN Governor Charles Soludo, the Nigerian senate that should have been leading the way in sanitizing Nigerian financial cesspool has decided to lead the charge to undermine the new governor and his policies. The shameless Nigerian senators, who can care less about the nagging conflicts of interest of theirs, are today leading the charge to undermine the re-capitalization policy of the CBN in order to protect their criminal investments in the corrupt system. However, it would perhaps be asking for too much to expect that those senators who are shamelessly entrenched in the criminal system would lead efforts to enact laws that hunt down those who made their fortunes through shadowy criminal banking. In reality, those criminals every one wants them to go after through strict legislations are largely themselves. How can any one expect them to fall on their own swords? That does not happen often in politics especially the Nigerian style. The Nigerian kingdom of the criminal underworld cannot afford to be divided against itself.

The truth is; if Nigeria wants to clean up her economic environment, if she wants to create a credible financial system, if she would convince the business world that she is doing all she could to create an honest economic environment, which of itself could attract foreign business alliances to our nation, she must first clean up her politics and politicians. Nigerian politics and politicians are too dirty, too dishonest and too sleazy to lead the charge in restoring credibility to our nation's economy and financial industry. The blurring of the line between criminal economics and unpatriotic and shameless politics is the number one impediment to economic recovery and progress in our nation. The terrible challenge for CBN Governor Charles Solude in the new light he is trying to shine on our nation's financial sector is to employ subtle maneuvers and commonsense to skirt around the entrenched financial criminals and their accomplices in the Nigerian legislature. This is a Herculean task indeed! As we prayed in our last essay on this topic, we wish the young CBN governor, God's speed!