From Mathias Okwe, Abuja

With only about four months to the deadline, Soludo disclosed that only seven banks have met the requirement, while the CBN is targeting 25 banks in the post-consolidation era.

Soludo was reacting to a plea by the President of the Institute of Chartered Accountants of Nigeria (ICAN), Alhaji Lateef Adebayo Owoyemi, that the CBN extends the deadline because of the huge cost of the consolidation exercise to the banks.

The CBN governor, who made the statement through his Special Adviser in Charge of Policy, Dr.Chigozie Emeluga, said: "Tell them that the deadline is not going to be shifted. By midnight of December 2005, any bank that fails to meet the re-capitalisation will cease to be a bank in Nigeria.''

He expressed concern about the way the banks were going about their re-capitalisation plans. He stated that the merger and acquisition plan of the financial sector consolidation was not conceived to have each bank source for funds for capitalisation and expressed fears that even if a year's extension was granted, it would still not be adequate for most of the banks.

Soludo recalled that in 2004 when the consolidation plan was announced, there were 89 banks out of which only seven were sound while the rest were either unsound or marginally distressed.

He blamed the external auditors for what he referred to as false financial reporting of the banks' accounts, which he said have been misleading. He charged them to change because there was no hiding place for any dubious financial adviser.

Owoyemi spoke in Abuja at the second conference of regulators and external auditors of financial institutions.

According to him, a review of the exercise among 15 banks showed that they spent an estimated N11 billion on fees to regulatory institutions for the consolidation. He asked that such funds be refunded the banks since the exercise was involuntary in the first instance.

He also suggested that the CBN rewarded well-managed banks as it did for the distressed ones where their 80 per cent debt stock with the apex bank were written off for them.

He also urged banks in the country to invest more on staff development as against the current practice, which subsists on poaching of staff. Unless the trend is changed, he said the on-going reform may produce "a pyrrhic; transient and unsustainable results.''

He also advocated a database of banks' debtors and that more publicity should be given on such defaulters with their photographs published to warn other unsuspecting bank against.