4th November, 2013
As Nigeria starts screening for a new CBN governor to replace Sanusi Lamido Sanusi (SLS) at the expiration of his tenure come June 2014, the names of people in consideration for his post, which includes coterie-elite bank managers like him and other old goons, causes one to shudder in fear for the fate of Nigerian masses, completely at the mercy of the prehensile oligarchs.
Agreed, Sanusi is a smooth and talented CBN governor. He protected Nigeria’s banking sector and fostered an environment for big corp. investment. But this is where SLS’s legacy ends—with big business and the banks. When the banks messed up in America, the government bailed them out. When the banks messed up in Nigeria, Sanusi supported policies that got the people to bail them out.
Looking back at SLS’s legacy; one phrase defines Sanusi: “Banks man.” That is what Sanusi was, or is. The CBN is not a government body that regulates the banks in the interest of the people and country; rather it is a body that enforces policies in favor of the banks on the people. In this regard, Sanusi Lamido has been a “great” CBN governor.
Nigeria’s banks charge more fees from their customers than any bank in the world. Customers receive 3-5 separate charges and lose up to 5% of their deposit, withdrawal and transfer funds to the banks. For us as individuals, this palpable robbery and hardship is hardly recognized for the herculean gift it is to the banks. Thanks to governor Sanusi, Nigeria’s banks are supported to make billions of naira on customer deposits and transactions. Easy money being made in sheer robbery!
To shore up these gains for the banks, the CBN governor instituted the “cash-less” regulation, enforcing Nigerians to use and keep their money in the cabal-owned banks. ” (Note- cash-less and not cashless)
Before we return to the profits Nigerian banks make off of the masses, we should look at one of the hallmarks of SLS’s tenure he will always be remembered by; the controversy provoking “Islamic banking.” Islamic banking was in actuality a religion-coated method of siphoning more money from the people for the benefit of the top banks and never really religious.
Muslims supported Islamic banking because it had “Islam” appended to it. Christians opposed it because of the same “Islam” in its name, and no one opened the box to see what the contents were. This is typical of so many Nigerian ethnic and religious disagreements. The blind-mouse masses fight, while the cabal-cats set themselves up to plunder. Islamic banking was simply a method to get the top cabal banks to market “Islamic” products too, to regulate “Islamic” finance and to suck Muslim money into the system.
Sanusi is a globalist’s man. Little surprise, year-in year-out, despite increasing hardship for Nigerian masses; he keeps winning the global and African Central bank governor of the year and other awards. Central banks are globalist controlled and Sanusi served to execute their functions to the letter. It is all about control and SLS gave them all the control they want. Being part of the team IMF directed to suddenly and without consideration, remove Nigeria’s oil subsidies as a New Year “gift,” one recognizes Sanusi as being an obedient servant of the “Royal Niger Company.”
Shariah banking has always been offered in Nigeria. Sanusi did not introduce Shariah banking as many were pissed thinking he did. All Sanusi introduced was “regulation of Islamic banking.” That entire rigmarole and squabble which had a prominent northern Muslim declaring to wage war, and had Christian leaders promising brimstone, had little to do with Islam or Islamic finance and everything to do with CBN control, big bank opportunity and global regulation of all people including all Muslims money.
Some of us have read news that the UK plans to be the top Islamic banking products merchant outside the Middle East. Prime Minister David Cameron just re-emphasized this last Tuesday. This should make us understand and appreciate that the so-called Islamic banking has little to do with Islam and all to do with elite gratification. Let’s review this. Islamic banking offers a product- Murabaha; “cost-plus financing,” which is a so-called non-interest loan to buy a home (or other asset). In a simple explanation; let’s assume a home costs $200,000. With interest banking, you finance the home for 30 years at an interest rate of 5%. Your total to pay in 30 years is about $400,000. And you pay about $1,300/month for the home you “bought.” With the so-called Islamic bank product, the bank buys the house on your behalf, then figures out what the value of the house would be by the time you pay off in 30 years, and says it is selling the house to you now for $400,000, or even $450,000. You pay installments of $1,300/month for 30 years, just like the interest option, the only difference is that this product is not called interest, it is given a fancy name, and you are fooled into thinking you are acting Islamic. It’s all about the branding.
Ijara, another product of Islamic banking is similar. This operates as a lease with option to buy, with the bank buying the property and leasing it to the client. The client pays two bills. One is a piece of the purchase cost till that is fully paid, and the second is payment for renting the property till it is fully paid for. These two bills combined equal mortgage and get the client to pay the same $400,000 or more, in 30 years. All these fancy colored products are Islamic “Riba,” or biblical “Usury,” which is the unjustified inflation of prices. Islam, is rather simple—buy what you can afford or borrow with no “fancy money.”
The profitability is why so many nations are tripping to offer Islamic finance products—the products offer a new look to the old crisis-hit financial products, and some so-called Islamic products are more profitable, appealing and more secure. The advantages of these products, though derived from religious thinking, are not necessarily religious methods. Such can be likened to new milk with drops of urine in it. Islamic banking is promoted from above. IMF backs and pushes Islamic banking.
Back to the exorbitant charges: From October 2nd this 2013, the CBN implemented penalties for corporate transactions—already crippling businesses in Lagos—around the federation. Mr Tunde Lemo, Deputy Governor, Operations explained that on corporate deposits of N2, 000,000 (~$12,000), corporate customers will forfeit 3% of their money to the banks. That equals a loss of N60, 000 to the banks for depositing your money with them. About $350! For individuals, deposits of over N500, 000 attract a 2% bank penalty. That is a loss of N10, 000, about $60.00.
Barry Terblanche’s BigNews considered whether South African banks charged the highest in the world. BigNews emailed banks in different countries to find out what they charged on a deposit of R100, 000 (about $10,000) and their charges for writing out cheques on the deposit.
Quoting from vaaltriangleinfo.co.za:
“South African prices were shocking. The Malaysian, Thai and Brazilian banks charge nothing for depositing R100, 000 in one month. South African banks charged more than or close to R1,000 at the time of doing the research.”
South African banks charged R1000 on the deposit; that roughly equals $100 for depositing $10,000. BigNews clearly did not checkout Nigeria. They would have had reason to rejoice. Or perhaps they didn’t bother. Nigeria is just not worth being put on the table to eat the bread with sheep. As we have it presented earlier, for a commensurate deposit of N2, 000,000 (N2M), about $12, 000, Nigerians pay $360. That is exactly three times what the South Africans are complaining about. A withdrawal of the N2M will attract an even steeper penalty of 5%! That’s N100, 000 / $600!
While other developing nations charged no, or a fixed minimal rate, Nigeria charges a percentage of deposit. This is real robbery and ensures that struggling small businesses crumble, while the banks “laugh their way to the bank.” These things happen in Nigeria because the people have been subdued by chronic deprivation and oppression and/or are engulfed in ethno-religious fracas, the leaders are too corrupt and there is absolutely no structure that protects the interests of the masses.
If these policies were instituted for truly making the society cash-less and not as a pleasant opportunity for the banks to make stupendous profits off of struggling businesses and the middle class, there will not be a fine on deposits. The deposit fine can only discourage depositors. Incentives and not penalties should be used to encourage bank use. The fine on deposits clearly is not a method of encouragement. Penalties for patronage are nothing more than colonial governance.
One good thing that the CBN is doing is phasing out Commission on Turnover (COT) by 2016, for those of us who survive till then. COT which has been N5 per N1, 000 is currently set to N3 per N1, 000 and will by next year, 2014, be N2, to be finally scrapped by 2016, thank God!
At “N5 per mille,” banks have been making 0.5% off of customers’ transactions continuously to infinity. *Note- this is apart from the transaction fees, tax, N10 sms alert fees and all other bank levies.
COT has been a cash cow for Nigerian banks. While draining the money of the masses, both corporate and individual, COT yields up to 10% of bank profits per annum.
In 2012, UBA generated N35billion from COT. GTB earned N37billion. Zenith Bank Plc made a whopping N55 billion in 2012 from our COT’s!
HSBC said in vanguard that “Nigerian banks main profitability pillars are fees and funding. It said that Nigerian and South African banks have highest fee loan ratios among markets covered at HSBC.”
Nigeria with an official loan interest rate at 16.8% is one of the highest in the world. In the US, you can obtain money at just 3%. The loan interest rate as well as the difficulty to obtain loans under this CBN government, makes it simply impossible for small business growth. Bankers explain that the CBN borrows banks at 15% making them in turn offer loans at 25-28% interest rates.
With all the things American citizens grumble, riot and protest about, they live in heaven compared to Nigeria. A wire transfer of $100,000 from Nigeria that lodges in a US account only gets charged a fixed fee of $15. You can write 1000 cheques on this sum and walk in to withdraw the entire sum without a single fee or charge. Banks are happy to have your money and are not assisted by the US central bank to force and fine customers. With no exorbitant fees, US transactions are faster and more secure as well as being insured by the FDIC. In Nigeria, people pay more for rubbish service. Refunds on purchases with cards in Nigeria take over 30 days to drop off if at all—with much phone calls, complaints, emailing of evidence and other stresses—this compares to less than 7 days in the US. The list goes on. Free market competition got banks in the UK to scrap COT in the 80s.
Mr. Tunde Johnson, said in the Punch, that after withdrawing some money from his account to settle some domestic bills, his balance should have stood at about N153, 000, but what he saw was a different figure. He said, “After that, I had a family emergency two weeks ago, and I needed to withdraw about N150, 000. I felt that since I have a current account I could safely withdraw the N150, 000 I needed. But to my surprise, after presenting my cheque to the bank, I was informed that I only had N145, 000 in my account, you can imagine my surprise.” The bank told him charges gulped the N8000. “Up till now, I still do not understand why that N8, 000 was taken away from me,” an exasperated Johnson continued.
An important question to ask is: Is the money recovered from the penalties on deposits and withdrawals—to allegedly enhance a safer cash-less society—transferred to the government for development of the society or to be used by the banks to subsidize and improve services; or does this fine simply lubricate the palms of the banks? As it appears, Sanusi “saved” us from the robbers on the streets by transferring us to his robber friends at the banks.
With the ridiculous amounts the CBN assists banks to rip-off clients; the banks offer no service for free:
Customers pay N10-50 per sms alert, even for bank error repeat texts; though bulk sms texts are offered to businesses by mobile networks at N1/sms.
Hardware token for security is issued at N2000 ($12);
Bank statements are charged at about N40/page;
Renewal ATM card is issued at a charge of N1000 ($6);
N500 monthly maintenance fee for current accounts ($3);
First Bank and Keystone Bank even have a N100 monthly ATM card maintenance fee!
You have the Value added tax—lol at “value.”
Even reference letters are fulfilled at a charge of up to N2000 ($12).
Compare this to America for instance, where banks do not make money on COT, deposits or withdrawals and most of these additional bank services are offered for free to customers.
Sanusi Lamido, one of the 100 most influential people in the world, according to TIME Magazine and recipient of the Commander of the Order of the Niger (CON), Nigeria, comes “vested” from UBA and First Bank. He represents the elite and Nigerian cabal. He holds the answers for Mr. Johnson and many more of us struggling Nigerians.
His legacy has been one that has protected the interests of the banks, forced Nigeria’s money into their hands and ensured they drain as much as possible from the hands of Nigeria’s poor, individuals and businesses.
We “blind mice,” await the selection of our next governor, though under our magnanimous 6th republic regime, we can bank on him/her being another banker’s man.
Lending interest rate (%) http://data.worldbank.org/indicator/FR.INR.LEND
Islamic banking “Double Haram” http://www.siasat.pk/forum/showthread.php?111479-quot-Islamic-Banking-qu…