"Waivers, bad loan judgement caused banking crisis"

(The Nation Newspaper; Wednesday January 19, 2011. Page 31)

So much has been said about the crisis that engulfed the banking sector and other key sectors of the economy in the last two years.
Managing Consultant, SPNS Consulting, Debo Adebayo says waivers and bad loan judgment were some of the major causes of the banking crisis.
He said such crises occurred because of compromise on the part of the inspectors.

"The problem with the banking sector was because loans were given to people that did not qualify. There is supposed to be conditions guiding such loan approvals and repayment plans. But we have seen banks introducing waivers, which in most cases, lead to problems in the future. We call it "waivers" because the prudential guidelines that should be followed in such loan request and approvals are circumvented," he said.
He said that SPNS consulting has positioned itself to render services that will help banks and other sectors of the economy adhere to laid down rules in carrying out their businesses. It has introduced two products built around Business Process Management (BPM) to achieve this objective.
The Business Process Adherence Solution which ensures that firms enforce business rules is handy. It is a product which the firm has introduced to banks, stock broking firms, insurance, oil and gas, information technology and other key sectors of the economy to enable them realize why they have to follow due process in carrying out their businesses.
The Business Process Improvement Solutions package makes up in areas where a firm needs improvement after a bitter experience.

Adebayo said Business Process Management is the part of management that deals with how various arms of a company's business operations is being handled to ensure things go the right way. This entails ensuring that the right business rules and frameworks are being implemented. It creates uniform ways of doing things and guides against unnecessary expenditure that comes with role duplication. It has to do with ensuring that a firm's operational systems and procedures are well-structured.
"BPM is a pointer to the basic rules that must be put in place in business operations," he said. He said part of the crisis in these sectors was not because there were no inspectors, but mainly because the inspectors compromised their positions."