Uncertainty Hangs Over 10,000 Bank Workers
- By Nik Ogbulie
- Published August 8th, 2011
- News
- Unrated
About 10,000 bank workers and their families may have their fancies and fantasies depleted as the Central Bank of Nigeria (CBN), last Friday, announced what looks like an indirect liquidation process which commenced immediately.
The very terse statement, which was not signed by any official of the apex bank, was silent on the fate of the over 10,000 workers of the three banks who may not be part of the entire rehabilitation team. There are strong indications that the banks may not spread their full operating network at the onset.
Afribank Nigeria Plc was known to have about 4,500 workers by their 2010 unofficial financial record while BankPHB follows with about 3,000 and Springbank has a little below 2,500. These figures were known to have been largely reduced by the various down-sizing exercises that followed their bail-out by the CBN.
Workers of the three banks who were in touch with BusinessWorld expressed shock at the development and regretted that the development was coming up at the time many of them have sacrificed much to ensure that the banks survived the distress scourge that tormented their souls since the last two years.
Most of the workers expressed fears that their jobs may not be secure any longer since the licences have been revoked and new banks set up in place. There was a wide outcry by the banking communities on the development as the banks were believed to have been making frantic moves to beat the CBN recapitalization deadline which is still some seven weeks away.
The liquidation news, which came like a bolt from the blues, may be a subject for some weird litigation as those banks, through their former directors and shareholder groups have some cases restraining the apex bank against any action on them.
Legal experts are still studying the development and would not rush into any analysis, but the workers are in great pains as they were hit while they were dreaming of a glorious exit from their situation.
It is on record that apart from depositors, workers of distressed and liquidated banks have been the greatest losers as they have been thrown out of their career in droves without due reference to labour laws.
Most of the time, some of them were never paid even one month salary while those who put in several years in service were not considered for any terminal benefits or gratuities.
This is the fourth time the apex bank took such bold steps that ruins the future of bank workers. The first was in 1996, followed by 1998, 2006, 2009 and 2011. Repayments by the NDIC have not been completed as the company battles for repayments of the insured deposits in fits and starts.
It was believed that the workers of Afribank may have escaped this trauma if not the crisis of confidence that engulfed their recapitalization efforts and the power-play that ensued in the process. But for SpringBank, there had not been any indication that they would make the journey to recapitalization.
According to CBN, “The Central Bank of Nigeria (CBN) is aware of, and supports, the decision of the Nigeria Deposit Insurance Corporation (NDIC), to exercise its statutory powers under the Nigerian Insurance Deposit Corporation Act, to establish Enterprise Bank Limited, Keystone Bank Limited, and Mainstreet Bank Limited as Bridge Banks, and by Purchase and Assumption Agreements, cause all the deposit liabilities and certain other liabilities and the assets of Spring Bank Plc, Bank PHB Plc, and Afribank Nigeria, respectively to be assumed by the 3 Bridge Banks, effective August 5, 2011.
The NDIC, in its role as insurer of deposits and in pursuance of express statutory powers, acted to ensure that public confidence in the nation’s banking system is not eroded and that depositors’ funds are safe.
The CBN, as the principal promoter of a sound financial system in Nigeria, and as required under the NDIC Act, has issued banking licenses to the Bridge Banks.
“The depositors of the Bridge Banks are assured of the safety of all their deposits,” the statement from CBN said. “The CBN assures seamless business continuity and ability of the Bridge Banks to meet obligations to depositors and lender-creditors as they arise, by granting all waivers, forbearances and exemptions necessary for their operations and the CBN guarantees the inter-bank obligations of the Bridge Banks until December 31, 2011 to ensure continued operations and customer confidence.”
The very terse statement, which was not signed by any official of the apex bank, was silent on the fate of the over 10,000 workers of the three banks who may not be part of the entire rehabilitation team. There are strong indications that the banks may not spread their full operating network at the onset.
Afribank Nigeria Plc was known to have about 4,500 workers by their 2010 unofficial financial record while BankPHB follows with about 3,000 and Springbank has a little below 2,500. These figures were known to have been largely reduced by the various down-sizing exercises that followed their bail-out by the CBN.
Workers of the three banks who were in touch with BusinessWorld expressed shock at the development and regretted that the development was coming up at the time many of them have sacrificed much to ensure that the banks survived the distress scourge that tormented their souls since the last two years.
Most of the workers expressed fears that their jobs may not be secure any longer since the licences have been revoked and new banks set up in place. There was a wide outcry by the banking communities on the development as the banks were believed to have been making frantic moves to beat the CBN recapitalization deadline which is still some seven weeks away.
The liquidation news, which came like a bolt from the blues, may be a subject for some weird litigation as those banks, through their former directors and shareholder groups have some cases restraining the apex bank against any action on them.
Legal experts are still studying the development and would not rush into any analysis, but the workers are in great pains as they were hit while they were dreaming of a glorious exit from their situation.
It is on record that apart from depositors, workers of distressed and liquidated banks have been the greatest losers as they have been thrown out of their career in droves without due reference to labour laws.
Most of the time, some of them were never paid even one month salary while those who put in several years in service were not considered for any terminal benefits or gratuities.
This is the fourth time the apex bank took such bold steps that ruins the future of bank workers. The first was in 1996, followed by 1998, 2006, 2009 and 2011. Repayments by the NDIC have not been completed as the company battles for repayments of the insured deposits in fits and starts.
It was believed that the workers of Afribank may have escaped this trauma if not the crisis of confidence that engulfed their recapitalization efforts and the power-play that ensued in the process. But for SpringBank, there had not been any indication that they would make the journey to recapitalization.
According to CBN, “The Central Bank of Nigeria (CBN) is aware of, and supports, the decision of the Nigeria Deposit Insurance Corporation (NDIC), to exercise its statutory powers under the Nigerian Insurance Deposit Corporation Act, to establish Enterprise Bank Limited, Keystone Bank Limited, and Mainstreet Bank Limited as Bridge Banks, and by Purchase and Assumption Agreements, cause all the deposit liabilities and certain other liabilities and the assets of Spring Bank Plc, Bank PHB Plc, and Afribank Nigeria, respectively to be assumed by the 3 Bridge Banks, effective August 5, 2011.
The NDIC, in its role as insurer of deposits and in pursuance of express statutory powers, acted to ensure that public confidence in the nation’s banking system is not eroded and that depositors’ funds are safe.
The CBN, as the principal promoter of a sound financial system in Nigeria, and as required under the NDIC Act, has issued banking licenses to the Bridge Banks.
“The depositors of the Bridge Banks are assured of the safety of all their deposits,” the statement from CBN said. “The CBN assures seamless business continuity and ability of the Bridge Banks to meet obligations to depositors and lender-creditors as they arise, by granting all waivers, forbearances and exemptions necessary for their operations and the CBN guarantees the inter-bank obligations of the Bridge Banks until December 31, 2011 to ensure continued operations and customer confidence.”
