By Henry Umoru
ABUJAâ€”THE Governor of Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi said yesterday that it would have no option than to print naira to save more ailing banks in the country, just as he said the apex bank had concluded the auditing of 11 other banks.
Addressing newsmen at the end of the 210thÂ Â Monetary Policy Committee,MPC, meeting of the bank, Sanusi who stressed that CBN does not require any appropriation by the National Assembly for it to lend money to the banks as part of its statutory responsibilities, said as the lender of last resort, what it did was to create money in line with CBN Act which gave it the power to create and lend money â€œwhenever the situation arises.â€
According to him, the management team of the bank would today meet the Senate committee on Banking aimed at answering questions ranging from whether the bank has the right to lend money or answer to charges of improper appropriation of money to the five troubled banks, adding, â€œwe will go and meet them today to tell us whether we need any appropriation to perform our statutory dutiesâ€.
Defending the injection of N420billion to save the banks, Sanusi noted that what the apex bank did was not a bailout, but liquidity support and financial intervention to bring them back to a position where they would then be ableÂ to provide their contractual obligations to their customers, adding that much of the money borrowed out by the banks will not come back.
The CBN governor who reiterated that on-going debt recovery efforts in these banks were to ensure that depositors and the banking industry were strengthened and not endangered, said that at the end of the day if any of the remaining eleven audited banks were found to be defective, the CBN will print naira to bail them out.
â€œWe are going to create money, we will increase money supply to provide financial intervention to bail out any of the banks in the recently concluded auditing for the next batch of eleven banks,â€ he said.
Sanusi who noted that CBN will be consistent in all its actions, stressed that the financial intervention which attracts 11 per cent interest was given out to ensure that depositors are not at risk, adding that actions so far taken on the five banks, were done in good faith, just as he said that if at the end of the day it is found out that he took a wrong decision, he would not hesitate to throw in the towel.
According to him, the hammer fell on the five banks after going through a series of processes, adding that bank examiners that were engaged to audit the 10 banks were five each from the CBN and the NDIC, even as he explained that after the initial auditing by the joint examiners, the papers came to the deputy governors who did thorough analysis of the report before forwarding it to him and the Managing Director of the NDIC, Alhaji Ganiyu Ogunleye before the final decision was taken on the banks.
Sanusi, who said he was a human being and that the decision he took on the five chief executives was not personal, but for the entire banking industry, stated that each time he â€œsees the former bank chiefs who were his friends being paraded on television like criminals, he gets worried.
â€˜â€™When I see them on television, it grieved me but it is a difficult thing , they have been my friends for many years, butÂ they have broken the law and they must pay for it.
â€œThe only thing I will say in general is that regulators all over the world have had to re-examine themselves and we are no exceptions. We have gone through an internal period of self re-examination, asking ourselves what we could have done better, putting in place measures to ensure we do not repeat the mistakes of the past.
â€œThe board of the stock exchange is not regulated by the Central Bank. That insider- related transactions if there are any, are not done by bank or by the stock brokers may be on behalf of bank or on behalf of people, or are done by stockbrokers who are licensed and regulated by the stock exchange.
â€œI will not want to comment specifically about what we have seen because the matter as at yesterday is actually subjudiced so I will not make specific comments about any of the issues that are before the court of law today.
â€œCBN does not need any appropriation to create and lend money to banks.”