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BANKING & FINANCE

 

Recapitalisation: Non-compliant Banks won’t Threaten Economy - CBN

By FABIAN ANAWO,
Monday, October 3, 2005.

BANKS that may not be able to meet the Central Bank of Nigeria (CBN) December 31st , 2005 deadline for recapitalization are not likely to pose any systemic threat to the economy. This was the views of the apex bank at the 11th Annual General Meeting (AGM) of the Chartered Institute of Bankers (CIBN).

Addressing the gathering, the Deputy Governor, Financial Sector Surveilance of the CBN, Mr. Tunde Lemo, said that the CBN was confident that the market share (assets or deposit liabilities) of banks that will meet the requirement is significant.
He said that it is important to note that the CBN cannot prevent a bank from failing but can only act as a facilitator in risk management.

This, according to him, the bank (CBN) does through creation of enabling environment.
However, he said that the CBN and the Nigeria Deposit Insurance Corporation (NDIC) would involve an examination process that would enhance their ability to detect emerging problems and enable them develop a code of corporate governance that would assist banks overcome their difficulties.

Easlier, the President of the CIBN, Mr. Samuel Kolawale, had called on the CBN and NDIC to develop a contingency plan that would cater for the possible non-compliance by banks that may not meet the December 31st deadline for recapitalization.
He advised banks to embrace and imbibe the doctrine of corporate governance. Mr. Kolawale said that effective corporate governance requires a clear understanding of the different roles of the various strata of authority in business organizations.

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 


©2005 New Nigerian Newspapers Limited.