The Nigerian Deposit Insurance Corporation (NDIC) has warned banks against excessive jumbo remuneration packages which could have negative effect in their revenue drive.
The Managing Director of NDIC, Alhaji Umaru Ibrahim gave the warning when the Bank Directors’ Association of Nigeria (BDAN) paid him a courtesy call in his Abuja Office.
Alhaji Ibrahim said that the the corporation is working towards flushing out fraudulent and unqualified bank directors from the system.Adding that NDIC is interested to know who is on the board of Nigerian banks and to make sure the right persons are in position to avoid the ugly experiences of the past.
“We are also going to pay attention on who is a director, what he/she is bringing to avoid a repeat of the past. We have stepped up training for our banks examiners in that regards and trainings are already on going.”
He however noted that it was important to give appropriate compensation to bank board members (directors) as their role was becoming more enormous and recognised. The caveat is that the compensation should be based on the individual bank’s compensation policy, and must be justified and not self serving.
His words: “What happened to banks in the past would have been avoided if the directors were given freedom to perform their roles. This brings the need for continuous assessment of directors in adding value and character to their institutions.
According to him, if the directors had applied fiscal discipline, such gross insider abuse would not have occurred. It is to this extent, he said, that NDIC has agreed to collaborate with the association in order to flush out those that are unfit to hold vital positions in the banks.
“The banking system is very critical and should not be left in the hands of all-comers,” he said.
Ibrahim also expressed interest in the association’s plan to institute an OMBUDSMAN which, he said, seeks to adjudicate matters without having to go to court.
Earlier, the President, BDAN, Dr. Sonny Kuku, explained the objectives of the association which, he said, would act as organ of communication for and to represent members and their various banks in all or any of their relationship with government ministries, departments, agents, local/public authorities and trade associations with regard to actual or proposed legislation or any other matter directly or indirectly affecting their interest.
Besides, the association would formulate and monitor the ethics of bank directors in the banking industry from time to time and this is aimed toward enhancing efficiency and accountability while also enlightening and educating its members in regard to their legal, moral and general rights and responsibilities in respect to their banks, organisations and society as a whole.