Chukwuma Soludo, governor of the Central Bank of Nigeria, CBN, is aware that the global financial crisis has the capacity to reverse the gains of consolidation in Nigeria’s banking industry. So, as the crisis bites harder, grounding businesses across the world, the apex bank last week, gave assurances to Nigerian banking public that none of the 24 banks in the country will be allowed to fail because of the likely effect on the economy. And should any of the banks run into crisis, the CBN will either take over the bank, cause the bank to be merged or acquired by a stronger bank or hand it over to a core investor.

At a meeting in Lagos last week, which was attended by the Bankers’ Committee, the Securities and Exchange Commission, SEC, private sector, and other stakeholders in the financial system, the consensus was that no bank was in distress. The CBN regular and stringent checks on the banks to detect early warning signals. This assurance is coming on the heels of palpable fears among the banking public over the state of the industry. “We will do everything possible to ensure that your money is safe,” Soludo assured. He hinted that the toxic assets of about eight banks which stood at N336 billion had risen to N400 billion after the CBN had included the margin of errors. 

In the last couple of weeks, the banking sector has been in the eye of the storm with claims of distress making the rounds especially in the media. However, Henry Boyo, an economist said that the problems in the banking industry were already in existence before the financial meltdown. “The seed of failure have always been there all along. When you have

a banking system that is liberaly regulated, you are bound to have failure. When you have a banking system that is made up of strange bedfellows, with possibly diametrically opposed cooperative cultures, you are preparing room for failures,” Boyo told the magazine. According to him, the reason for the consolidation was to make the banks stronger, safer and more responsible. But the question is, “are they safer, stronger, more responsible in terms of  commitment to the development of the real sector”? he queried.