"The report of 14 Nigerian banks which were appointed by CBN as “Asset Managers” of Nigeria’s reserves was carried on back page of The Guardian Newspaper of 5th October, 2006.  Festus Odoko, the CBN's Head of Corporate Affairs, confirmed in the report that “already deposits worth $7bn representing part of the CBN’s “share of foreign reserves”, presently estimated at about $38bn, had been released to the banking consortium”.
Although Odoko confirmed that the appointment of the 14 banks was ratified by the Investment Committee of the CBN on Tuesday, 3rd October, 2006, the $7bn had apparently been quickly shared out the next day!

Thus, CBN made good its promise to invite Nigerian banks with upto $500m consolidated capital base to a "foreign reserves banquet", if they could also provide evidence of existing collaboration with internationally credible financial houses.  The Guardian report however failed to clarify if the expected collaboration included management oversight or was simply a formalization of a glorified foreign correspondent banking arrangement! 
"Nonetheless, critics have wondered if 14 banks which laboriously raised their capital base to N25bn could also quickly raise an additional N35bn to meet the $500m benchmark required to manage CBN's reserves; on hindsight, it seems the apex Bank may have quietly dropped this steep requirement so as to pursue its earlier declared agenda!

 “Nigerians are generally unaware that with a stroke of the pen, CBN committed our country to possibly its largest single venture ever! The question however is, who will benefit from this huge upfront payment for an anticipatory promise to grow our economy with active support from beneficiary banks?  Yes, you have got it, the same 14 banks will smile broadly to their overseas partners’ vaults, since these banks recognize that the related cost, if any, of the $7bn largesse will certainly not exceed the usually very modest below 3percent prevailing international yield on such placements
"Incidentally, the 14 favored banks are not constrained to restrict application of the $7bn to address our own critical domestic infrastructural deficit, and they are therefore at liberty to invest internationally!  It is disturbing, however, that while we go cap in hand in search of foreign exchange inflow from foreign investors, we are, simultaneously inexplicably, exposing our precious $7billion, for minimal or nil return, to a consortium of Nigerian banks which have a consolidated capital base of less than $3billion, without demanding some measure of collateral/audit/managerial control or equity participation.  Curiously, the tenure and other details of the M.O.U regarding this transfer of our vital asset have not been made public.

It would be foolhardy to expect that the largesse of an uncollateralised $7bn deposit or low interest credit would change the attitude of banks to supporting real sector investments, particularly the significant funding deficit of SMEs.  The bizarre strategy of a minimal return below 3percent on a $7bn “placement/investment” is clearly amplified by CBN's willingness to conversely, simultaneously pay between 12 and 17percent interest on funds it borrows from these same banks!

"Nonetheless, even if the 14 banks are willing to repatriate all or part of the $7bn back to the Nigerian capital market, it is not difficult to predict where their interests would lie: yes; the obvious destination would be further patronage of government’s treasury bills and bonds on which they can earn returns of up to 17percent, even when ultimately, the CBN, simply sterilizes hundreds of billions of Naira it borrows from any socially impactful use. Thus, we may ultimately be paying oppressive interest rates to the same creditors whom we gleefully ‘gifted’ our savings for minimal consideration. This may probably be seen as the ultimate strategy in worst central banking practice!

"Odoko, the CBN’s mouthpiece also claimed, in the same Guardian report, under reference, that “the $7bn represents the apex bank’s share of Nigerian’s foreign reserves!’  I beg your pardon!  Apart from the very lucrative business of substituting naira for federally allocated dollars to build up reserves, what business did the CBN specifically do to earn $7bn? 
Evidently, Section 162 of the Constitution does not distinguish any share of dollar reserves, strictly for CBN; our crude oil revenue belong to the Nigerian people as constituted by the three tiers of government; thus, the National Assembly would have defaulted in their constitutional duties if CBN is not invited to defend why $7bn of our reserves should be liberally advanced to 14 banks without oversight approval, while we still go cap in hand to beg for external loans!"  

The preceding is a summary with excerpts from an article titled “14 Nigerian banks to enjoy $7bn reserve”; the piece was first published in the Vanguard Newspaper on 9th October, 2006.  Not surprisingly, barely two years after Prof. Chukwuma Soludo's ‘celebrated’ banking consolidation and confident assurances to the National Assembly that Nigerian banks were insulated from the global economic meltdown, most Nigerian banks actually tittered on the verge of collapse.  There is yet no confirmation that the 14 banks have repaid the $7bn given away in October 2006 by CBN before the banking crisis erupted in 2008; consequently, it is possible that Nigeria's $7bn reserves may have ultimately 'gone with the wind' during the ensuing financial crisis! 
Nonetheless, between 2009 and 2010, during Lamido Sanusi’s tenure as Governor, such probable default still did not stop the banking sector from receiving additional largesse in excess of N5tn ($30bn) liberally created by CBN and channeled through its surrogate, the Assets Management Corporation of Nigeria as interventions, to rescue the banking sector.
Thus, CBN's misguided generosity notwithstanding, the banking community has remained resistant to providing SMEs access to cheap funds to stimulate industrial rejuvenation, economic growth and increase employment opportunities.  Incidentally, the CBN's self-styled "own reserves" subsequently expanded well beyond $40bn to support the Apex bank’s sporadic multi-pronged uncoordinated cash interventions to various groups. Paradoxically, soon after AMCON’s interventions, the banking sector bounced back with bountiful profit postings, despite a still largely comatose real sector. Consequently, unemployment, oppressive mass poverty and increasing national debt, unexpectedly have become increasingly burdensome! Ironically in 2015, the banks also became prime beneficiaries of N600bn bonanza interest charges paid by CBN for borrowing back excess Naira balances which were earlier placed with zero interest by government and Agencies in these same banks.

In the light of the severe economic implications of the current forex deficit, it is necessary for the Economic and Financial Crimes Commission to take a closer look at the circumstances and ultimate fate of CBN's extraordinary “deposit/loan/placement” of $7bn to 14 banks in 2006; Nigerians surely have a right to know. After all, if the $7bn largesse to banks was a widely reported media affair, one should, also expect that the refund or the successful liquidation should have been heralded by a much more ‘in your face’ media blitz to assure Nigerians of the exemplary sectoral competence, so that the wisdom of CBN’s provision of this facility to the banks in the first place, would be appreciated.

Regrettably, however, despite the $7bn CBN’s largesse and $36bn AMCON interventions, there are indications that with non performing loans, now in excess of the precarious threshold of 5percent, the banks may again be in trouble without having fulfilled the public expectations of powering growth of the real sector or promoting the creation of more jobs. Worse still, CBN may be again compelled to soak up more toxic debts and create fresh cash injections to once more bail out these banks, even when recent history shows that such interventions may fail to recharge the economy.