Posted by Ayodele Aminu on
The Central Bank of Nigeria (CBN) yesterday said that more than 60 banks, apart from those that have already made or surpassed the N25 billion minimum capital, have formed various merger groups.
* 2 get approval-in principle
The Central Bank of Nigeria (CBN) yesterday said that more than 60 banks, apart from those that have already made or surpassed the N25 billion minimum capital, have formed various merger groups.
It also confirmed that two of the groups have gotten its approval-in-principle to forge ahead with their merger arrangements. STB/UBA is one of the groups while another undisclosed group is expected to get theirs before end of the week.
Director, Banking Super-vision, CBN, Mr. Ignatius Imala, made these disclosures yesterday at a press briefing shortly after the 279th edition of the Bankers' Committee meeting in Lagos.
The Bankers' Committee is an association of the chief executives of banks and selected financial institutions, which meets bi-monthly to discuss the state of affairs in the industry. The Governor of the Central Bank of Nigeria (CBN) usually chairs the meeting.
Imala who briefed the press alongside the President/Chair-man of the Chartered Institute of Bankers of Nigeria, Mr. Samuel Kolawole, Registrar of the Institute, Mr. Esan Ogunleye, Executive Director, Afribank Plc, Mr. Jubril Aku and CBN's Deputy Director, Corporate Affairs, Mr. Tony Ede, said the apex bank has discouraged banks from achieving the N25 billion capital base alone.
'There are some banks that want to stand on their own. We have been meeting and talking to them to take two or three others along so that at the end of the day, we won't have so many banks left behind.
'There are also some banks that said they want to raise funds from the capital market, while others said they are waiting in-flows from their foreign investors. We (CBN) believe that it is too late to raise funds from the market now. We have advised them to concretize all the M.O.U they had already signed.
'Although, some of the other banks awaiting foreign inflows showed evidence that they are actually expecting the inflow but we have advised them to provide an alternative arrangement by merging with their colleagues and await the inflow so that it does not get to a situation where it is too late for them to find a merging partner," he said.
While reiterating that there was no going back on the December 31, deadline for banks to recapitalize to the tune of N25 billion, he said the CBN is satisfied with the progress so far made in the on-going consolidation exercise.
'As far as CBN is concerned tremendous progress has been made in terms of the number of banks that have signed M.O.U, those that have gotten pre-merger consent and those that have formed merger groups," he said.
Commenting on the measures taken by the CBN to control excess funds in the economy which had drastically crashed interest rates, the CIBN president said the Bankers' Committee is satisfied with the action so far taken. The CBN had last week commenced the direct withdrawal of N60 billion parastatal funds from banks.
If the CBN had not moved to curb the excess liquidity in the system, Kolawole said there is 'tendency for the banking public to move their funds from savings, which would be injurious to the economy."
To effectively control the excess liquidity in the economy when the need arises, he said the Federal Government bonds would soon be restructured by the CBN and listed on the Nigerian Stock Exchange as part of banks assets.
He also said efforts are being made to review the existing law as regards dud checks with a view to serving as deterrent to people who issue such cheques.
Commenting on the progress made on Small and Medium Enterprises Equity Investment Scheme (SMEEIS) the Afribank Executive Director who disclosed that two changes were approved in the guidelines, said as at May 31, N9.39 billion out of the N30.99 billion set aside by banks had been invested in 189 projects. This is a slight increase over the N8.95 billion invested in 180 projects two months ago (March 31).
Banks, he said, can now have preference shareholdings in the projects they invest their SMEEIS in, while period of divestment from the project has been raised from three to five years.