Fallout of Intervention III — Criminal Matters

Abstract

Prior to the banking consolidation reform championed by the former Central Bank of Nigeria governor, Charles Soludo, industry fragmentation, poor corporate governance, unethical business practices and flawed management had characterised the Nigerian banking sector. The preceding decade and a half had witnessed cycles of financial distress and enforced bank closures. With such a fragile foundation, the proliferation and subsequent merger of feeble and irresolute banks was never likely to produce strong institutions. Compounding the scenario was the capital-raising imposition by the CBN, which drove virtually all the indigenous banks into the obliging embrace of the stock market. The sudden influx of publicly-quoted banks led to scores of public offers, initial public offerings (IPOs) and rights issues, all aimed at meeting the minimum capital requirement of N25 billion stipulated by the CBN.