Nairametrics| An inter agency task force in charge of investigating failed financial institutions has said it will commence moves to rearrest individuals that were indicted in the running of the institutions who jumped bail. The move to resume the investigations was due to some of them sneaking back to the country.
Though better late than nothing, resuming the prosecution is rather belated. Why has it taken so long for the authorities to act ? Declaring those who jumped bail wanted is a simple process. Funds in question would have been long dissipated. The bigger issue is a clear lack of regulatory capacity in the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Commission (NDIC). Banks are required to submit quarterly reports and are also subject to routine and unplanned examinations by the CBN. Financial institutions do not fail overnight. Both institutions tend to wait till the situation is critical before moving in. It is easier to minimize financial institutions failing than resolving their collapse. A spike in impairments by most commercial banks and calls for an extension of the tenure of the Asset Management Company Of Nigeria (AMCON) shows some banks are close to the point of distress.
A late resolution of the failed banks lowers the confidence the public have in the financial sector. Some of these cases originated in the early 90s. No significant convictions have occurred. Depositors in these banks may have passed away or no longer be in the country. Inflation will also render the buying power of the funds recovered infinitesimal. also makes it difficult to increase the level of financial inclusion in the country, which is barely 20%. Those who lost money in the failed banks will be hesitant to do business with other financial institutions.
