Posted by By SEUN ADESIDA on
In a bid to stem the growing tide of spurious claims by banks, Central Bank of Nigeria, yesterday through the bankers committee has ordered all banks to now operate a December year ending account.
In a bid to stem the growing tide of spurious claims by banks, Central Bank of Nigeria, yesterday through the bankers committee has ordered all banks to now operate a December year ending account.
The apex bank has also announced the purchase of 20 Armoured Personnel Carriers (APCs) by the 24 money deposit banks for protection against incessant robbery attacks. This was disclosed by the managing director of First Bank Nigeria Plc, Mr. Jacobs Ajekigbe at a press briefing after the Bankers Committee meeting in Lagos.
Ajekigbe said; 'Year end accounts of banks have now been harmonized. This is to ensure that all Nigerian banks now have a common year end. We have discoursed with auditors who are the major challenges that we have in this area and they have all agreed that they could deliver on audit reports necessary to produce the accounts."
According to him, 'Effective from December 31, 2008 all the banks would conclude their financial report by December of every year. This is to effectively address the issue of which is the biggest bank in the industry and where all kinds of accounts are being published by some banks," Ajekigbe said.
Speaking on banks recourse to rush to the capital market to raise funds managing director of Spring Bank, Dr. Suleiman Ndanusa, said the Bankers Committee together with the CBN have agreed that henceforth any bank returning to the capital market must compulsorily submit a detailed report of its business plan to support the extra money being raised. 'The CBN must certify that such funds are necessary and the banks actually needed such an amount of money to be raised."
Ndanusa stressed that CBN before now was only interested in banks' business plan strictly to monitor the health of such banks going to the capital market to raise funds, adding that now the focus has shifted to what the banks are using the money for. Some of the banks in the market today cannot justify why they are there to raise fresh funds, banks cannot just be raising funds endlessly.
He said, 'Effective from today any bank going to the market must submit its business plan to the CBN for approval before such offer is approved by the CBN."
In recent times about six banks have returned to the capital market to raise fresh funds. However, Dr. Ignatius Imala, CBN's Director of Banking Supervision said the new measure by the apex bank was to refocus the banks who essentially are being lured to the market not because of any serious strategic business expansion plans but to be able to manage the country's external reserve as promised any Nigerian bank by the CBN governor, Professor Charles Soludo.
The promise was for any Nigerian bank that is able to raise its capital base up to $1billion.
Imala revealed that the CBN has not issued any circular to that effect and wondered why the banks are running head over hills to get recapitalized up to $1billion. He said, the governor has revoked the incentive since it was given verbally.