Dennis Onwuegbu l Tuesday, 05 January 2021
LAGOS, Nigeria – Recent commentary by financial expert and chief executive officer of Financial Derivatives, Bismarck Rewane about the future of banks in Nigeria is an attestation that, all that glitters is not gold. Rewane without much reservation pointed out that merger and acquisitions await banks in Nigeria in 2021 and beyond.
This assertion by the forthright financial analyst, is in direct tandem with past positions by other institutions. In another instance, state owned media company, Al Jazeera late in 2019 traced the unpleasant history of what led to failed banks in Nigeria in the last decade.
The issues bedevilling the banks in Nigeria today have remained the same over the years – inefficient service delivery, masse’s distrust for banks, consistent rise in number of bad loans and perhaps most critical, abysmal treatment of customers with zero consideration to customer satisfaction. Banks in the country have dealt with slack hands the single most critical element to their sustenance– the customer.
A couple of days ago, angry customers who have obviously endured poor treatment from GTBank Plc, called out the bank for treating them with shoddiness. Before then, in the aftermath of the #EndSARS nationwide protest, it was the turn of Access Bank Plc. And the number continues to rise as the customers continue to mistrust the banks.
It has not been any different for two corporate customers of UBA Plc who must have experienced a most harrowing and bleak yuletide season alongside their workers and families. The story of Messrs Sanyuna Oil and Gas and, Supert Oil and Gas, is a classic display of arrogant power and shows how overbearing the average bank in Nigeria has become in their relations with customers.
Since October 2019 these businesses, both of which have accounts with UBA Plc; survival in the midst of the ravaging Covid-19 pandemic, has been harrowing, to say the least. And this is because the bank has arrogated to itself an arbiter and judge in its own case.
Ordeal for both companies began in November 2019 when in search of Forex they Sunyana bought some Dollars from a certain MXG Energy, another account holder with UBA. Supert who also needed to meet obligation to customers bought the sum of $300,000 from Sunyana.
The brevity of the story is that it was later discovered that MXG Energy which owner strangely happens to be a former staff of UBA had received a certain $400,000 from a private account with Citibank of New York and which money was later found to be proceeds of fraud.
This fund was sold by a Branch Manager of UBA, a certain Ayoola Olaide to Sanyuna Oil & Gas Limited on 18 October 2019. The same UBA carried out the transfer of the funds between its customers and their partners in Abu Dhabi and so forth.
It turns out that $300,000 of this money had been recalled by Citibank, New York because of its fraudulent nature. An order from Citibank New York and the FBI through the EFCC that the fund should not be moved was not heeded by UBA.
Since November 2019, UBA first placed a No Debit Order(PND) on the account of Supert Oil and Gas, it later vacated that and for more than one year, it has held unto $300,000 funds belonging to this company for what it refers to as ‘safekeeping’, without the customer’s consent and no legal backing to this effect.
And recently, the bank has also clamped on a further $120,000 this time in the accounts of Sunyana Oil and Gas Limited, all on account of the same $300,000.
Every effort to cause a release of the funds has been frustrated by the Compliance team at UBA Plc. Both the police at the office of the AIG Zone 2 and the Lagos Zone Coordinator of the Economic and Financial Crime Commission (EFCC), have expressed dismay at the bank’s position on the matter but, it has not translated into the release of these customers’ funds.
This singular incident has further thrown light on how the average bank in Nigeria treats its customers. The banks in most cases consider the customer as the inferior albeit weak partner in the relationship.
Questions are craving for answers if banks must serve their purpose of providing efficient and reliable services for profitable ends, over a long time. In the case of these companies and UBA Plc., for instance:
Where was the Compliance Officers of UBA Plc when the $400,000 fraud fund came into its system? Why did officials of UBA Plc ignore the advice from Citibank/FBI through EFCC not to let this suspected funds pass enter its system? And after it has made mistakes, which is human; why is it taking the bank months to determine where the flaws came from and save its customers from this harrowing experience?
The Chief Compliance Officer at UBA Plc is Franklyn Bennie who before joining UBA had a whopping 27 years experience at Citibank Nigeria. Expectation often does not match reality. Could it be that the bank cluster of Compliance Officers are not adequate to cover its extensive network of branches?
The obvious gap in the UBA system further raises question of capability in the apex bank, Central Bank of Nigeria (CBN) to carry out effective oversight function over the banks in matters of this nature to protect the saving public.
One of the required qualifications of a compliant officer in any bank in Nigeria, according to the CBN is certification by International Compliance Association Certificate (ICA) or Certified Anti-Money Laundering Specialist (CAMS) or that official must be a Certified Fraud Examiner (CFE).
In spite of this somewhat stringent criteria and qualification for a Compliance Officer, the banks in the country seem to be centre of some of the most debilitating corruptions in the land. The EFCC and related state agencies, will tell you that fraud involving bank officials in collusion with criminal elements is on the ascendancy.
The series of misinformation that the above case involving UBA Plc, only confirms how banks have been left to themselves by the apex bank, consequently the customer does not have protection in the way that will engender confidence in the sector.
The apex bank has been lied to that the case of Sunyana, Supert and UBA is about fraud. This is not true. Yet, the CBN either does not have the wherewithal to verify and investigate the true position of the complaint made by one of the customers; or it is overwhelmed by the too many complaints against commercial banks in the land.
While the aggrieved customers have written series of petitions and complaints to the top hierarchy of UBA Plc starting from Chairman, Tony Elumelu; Managing Director, Executive Directors and Chief Compliance Officer, among others; the only response from the bank since November 2019, has been that it is investigating the matter.
The amount of $420,000 clamped down by the bank may not amount to much compared to the billions of naira UBA may soon announce as profit in its 2020 annual financial report. But, earning profit out of the salty sweat of young Nigerian businesses can only portend a gloomy future for the bank and the sector. How long this endures is left to anyone’s guess.
NB: Dennis Onwuegbu is a journalist based in Lagos
