An Economist, Mr Abba Adaudu, has decried the Central Bank of Nigeria (CBN) revocation of Heritage Bank’s licence due to a breach of banking regulations.
Adaudu, a financial consultant, spoke with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
He said that the bank’s licence revocation would have adverse effects, as all its customers would flood the bank’s offices nationwide to collect their deposits.
According to him, the bank’s licence revocation has multiplier effects on the economy, as many bank staff will lose their jobs and be again thrown into the labour market.
Adaudu said that the revocation would negatively affect the banking system as many people might be afraid to put their money in the bank.
On Monday, NAN reported that the CBN revoked the banking licence of unlisted lender Heritage Bank Plc due to a breach of banking regulations.
According to CBN, the bank has continued to suffer and has no reasonable recovery prospects, thereby making revoking the licence the next necessary step.
The central bank said its action followed a period of engagement with the bank where it prescribed various supervisory steps intended to stem a decline in Heritage’s performance.
Adaudu, however, argued that, as the nation was facing an economic crisis presently, the revocation would trigger more hardship on the people, as the economy, dependents, and bank staff would suffer.
He advised that CBN would not have revoked the bank but dissolved its board, as it did with the Keystone, Union, and Polaris banks, and taken over the financial institution for proper management.
He listed letters of credit, promissory notes, provision of admirable customer service, providing adequate information and providing account statements as some of the services the customers would lose.
“Other services customers will lose are protecting customer deposits, honouring cheques, providing access to financial services and protecting customer confidentiality,’’ he said.
On the Minimum wage crisis between the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), Adaudu said that Nigerian workers’ salaries were very meagre coupled with the hyperinflation facing the country currently.
He urged the Federal Government to establish cooperative farming for successful businessmen in the six Geopolitical Zones to curtail the country’s current high food prices.
According to Adaudu, the federal and state governments will not be able to pay civil servants enough if the high rate of inflation is not lessened.
He said forming cooperative farming would help cushion the effects of food shortages and high food prices in the country.
The economist added that empowering successful businessmen in the six geopolitical zones would help address the country’s current food crisis.
Adaudu explained that if this policy were implemented with adequate supervision and security to protect the farmers in these zones, more food and employment opportunities would be created.
