By Laja Thomas
LAGOSâ€”The Central Bank of Nigeria, CBN, has declared that the nine banksÂ bailed out by the regulatory agency are currently on life support and that they will soon move them (banks) to safe harbour.
This was stated by Mr. Tunde Lemo, CBN Deputy Governor, Operations, who represented the CBN Governor, Malam Sanusi Lamido Sanusi at the ICAN, Ikeja District Membersâ€™ Forum Thursday in Lagos.
According to him, â€œa number of options have been considered for the recapitalisation of the affected banks including capital injection, combination with a strategic partner, liquidation and nationalism.
â€œA combination with a strategic partner is viewed as the most appropriate option as it actually addresses capital, liquidity and corporate governance concerns.
Continuing, he said, â€œthe banking reform target is to prevent a similar crisis occurring in the future by enhancing the quality of banks through improved corporate governance, supervision enforcement and improved accounting and reporting standard, adding that, â€œensuring financial stability and sustainable growth through monetary and fiscal policy framework.
Enabling healthy financial sector evolution.
“The CBN is presently pursuing a number of activities to address the immediate issue of governance, liquidity and capital and to inject further liquidity into the system to reflect the real economy.”
His words, â€œpart of these activities is the establishment of the Asset Management Corporation of Nigeria, AMCON and we intend to implement specific regulatory reforms. The AMCON is very important because it will be used to acquire risky assets from banks to strengthen balance sheets and stimulate lending and boos confidence in the economy.
Speaking further on the AMCON, he said, â€œthe House of Representatives has passed the AMCON bill and the Senate is already going through the third and final reading of the bill, adding that, â€œthe intended life span of AMCON is 10 years and it is et up for all the commercial banks.
It will require loans from all deposit money banks. AMCON will be managed by a Board to be approved by the President.â€
He appealed to Chartered Accountants to partner with the CBN, saying they are important stakeholders in the Nigerian economy. According to him, â€œthe Nigerian economy continues to be resilient despite the lingering effects of the global economic and financial crisis, adding that the CBN believes that the Nigerian economy is set for exponential growth in the next five years by the time every indice must have been put in place.â€