“One of the greatest tests of integrity is the stubborn refusal to compromise” — Chinua Achebe
Banking and law are two distinct professions in which there has been public misunderstanding surrounding the two complimentary but diverse professions.
The misunderstanding is heightened by the incursion of lawyers to banking. That development led to loss of value in banking ethics and value of trust which drives the banker customer relationship thus the need to demystify lawyers and bankers. The heart of the matter is that law and banking are driven by conflicting values about morality and integrity.
Whereas in law, there is no morality, banking is well founded in morality and integrity. For instance, to lawyers, when you make a promise with or without consideration, you have a right to change your mind whereas in banking, your word is your bond. You must deliver on your promise come rain come shine.
The mystery between law and banking played out in the Supreme Court judgement that N20O, N500 and N1000 notes remain legal tender currency until 31 December 2023. Whereas the CBN in line with the law establishing it had a different timeline for the validity of the notes as legal tender, the Supreme Court, even with affront to the Executive arm of government (no morality) ruled otherwise.
From strictly legal point of view, that judgement is not binding on the CBN because they were not joined as a party to the suit in which that judgement was given. Lawyers in their usual cunning and treacherous way sued the Federal Government to the Supreme Court leaving off the CBN so that the court can have jurisdiction as court of first instance. They engaged in what I can call “creative lawyering” in order to achieve their aim of breaking the protocol.
The invasion of the banking industry by lawyers has robbed banking of cherished traditional values and glamour because of the difference between banking values and legal values
The CBN’s compliance with the Supreme Court judgement is more of political decision or settlement to stop the Nigerian Labour Congress from going on strike which can destabilize the polity. The Federal Government whose function on Currency matters was pressured into obeying the Supreme Court judgement, not because it is in synchrony with international banking best practices but because the Nigerian Labour Congress served it 7 days’ notice of embarking on strike if measure was not put in place to ease the cash crunch.
One fact that lawyers have failed to come to terms with is that banking is banking and law is law. Yes we have law relating to banking alright but then, where there is a conflict between banking law and banking practice, or where there is a gap between banking law and banking practice, banking practice over rides banking law.
The point I am making is that banking is a “fiduciary business”. The bank owes a fiduciary duty to its customer which cannot be denied by law. Therein lies the mystery when we say banking is not a matter of law.
In Woods v Martins Bank and Anor (1959) 1 Q B 55. Salmon J at page 70 said inter alia “In my judgement the limits of a banker’s business cannot be laid down as a matter of law. The nature of such a business must in each case be a matter of fact and accordingly cannot be treated as if it were a matter of pure law “.
The invasion of the banking industry by lawyers has robbed banking of cherished traditional values and glamour because of the difference between banking values and legal values. Lawyers in banking behave as if they are in courts of law where it is only what you ask from the court that it grants you. Thus if you have a right accruing to you and you fail to ask for the right, it will not be granted.
Banking practice is not like that. In traditional banking, if you have a right and you don’t know about it, not to talk of asking for it, the banker will still give it to you. That is where trust comes in. Also promises in banking need not be in writing to be enforced. A banker’s promise is as good as cash. A banker’s word or promise is his bond. To lawyers going by rules of evidence, whatever is not written does not exist. As lawyers will say “it is your word against mine”. This with lawyers there is no trust and thus integrity becomes a big issue beginning with the plea of not guilty whereas you were caught red handed in the act. This happens because there is no morality in law.
The Bible book of Isaiah 59 v 4(NIV);” No one calls for justice, no one pleads his case with integrity. They rely on empty arguments and speak lies, they conceive trouble and give birth to evil”.
Isaiah 59 v 14 continues “So justice is driven back and righteousness stands at a distance, truth has stumbled on the streets , honesty cannot enter. Truth is nowhere to be found and whoever shuns evil becomes a prey” (NIV).
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Like we said earlier, lawyers have completely changed the much cherished character and honour in banking. The Chartered Institute of Bankers of Nigeria has “Trust and Honesty” as its moto. Unfortunately, these values are anathema to the legal profession. And it is trust and honesty that makes a banker to give it’s customers all their right in banker _ customer relationship.
As soon as lawyers invaded banking, they began to manipulate and void all the rights of a customer as captured in account opening forms and loan documents. Many ignorant bank customers are not aware that that in case of breach of contract between them and their bankers, they have waived or voided all their rights to sue.
Even in loan agreement, they inserted a clause that the customers must serve the bank 90 days’ notice of their intension to sue but the bank can go ahead and sue the customer without notice. What these cowboy lawyers do not know is that all those waiver clauses are not binding on the customer because there is no consideration for the waiver. What you give is what you get, “quid pro quo.” Promise for promise, promise for an act, act for promise (Curie v Misa).
The time has come for professional bankers to take over their industry. Lawyers, many of who cannot argue a case in law courts find their way to legal department of banks and begin to rewrite established banking rules just to give the impression that they are working for their pay by inserting clauses to protect the bank’s interest whereas the interest of the customer comes first before the interest of the bank by convention. Lawyers in banking cannot reinvent the wheel by changing the “usage of trade”. That is why banking practice over rides banking law where there is conflict between the two.
Enyinnaya is fellow, Chartered Institute of Bankers
