Â By Babajide Komolafe
Â The Central Bank of Nigeria (CBN), yesterday, said there is no limit on shareholdings in Nigeria banks and that it has not set credit approval limits for banks and discount houses.
In a press release signed by the Deputy Director Corporate Affairs CBN, Mr M.M Abdullahi, the apex bank denied media reports which claimed it has pegged equity holding in banks to five per cent and set credit approval limit for banks and discount houses.
The press release titled, â€œ Re- alleged limit to loan approval and five per cent Equity holding in banks equity holdings in banks to five per cent,â€ stated, â€œFor the avoidance of doubt, the Deputy Governor only said that any shareholder who wishes to own more than five per cent equity shares in any Nigerian bank has to obtain the prior written approval of the Central Bank.
The CBN does not intend to limit the percentage of shareholding of investors in Nigerian banks as this will not only negate the provisions of the Banks and Other Financial Institutions Act, 1991 as amended but also the Nigerian Enterprises Promotion Act which encourages unfettered participation of both local and foreign investors in all Nigerian enterprises, including the banking sector. In the same vein, the February 1, 2010 Vanguard
publication, quoting from page 64 of a Circular issued by the CBN dated January 18, 2010, titled â€œMinimum Information to be disclosed in Financial Statements for the Year Ended December 31, 2009â€, claimed that the CBN had set credit approval limits for banks.
The CBN also wishes to inform the general public that this position is untrue as the Circular only provides guidance on the minimum disclosures by banks and discount houses in their annual accounts to enhance transparency and ensure standardization in financial reporting in annual financial statements. The figures in the circular are therefore merely hypothetical figures that do not in anyway represent credit approval limits set by the CBN.
The general public should note that the primary responsibility for managing banks and discount houses rests with the Boards and Managements of those institutions, a position that the CBN recognizes and respects. The CBN has not and will not impose approval limits for banks and discount houses as those are matters of discretion for the Boards and Management of those institutions. The general public is hereby advised to be guided accordingly.