ICAN Backs CBN on N25bn Capitalisation
Banking
By Amarachukwu Ona and Ibrahim Bolarinwa
The President of the Institute of Chartered Accountants of Nigeria (ICAN), Mrs. Ibironke Osiyemi has declared that ICAN is strongly in support of the N25 billion capitalisation of banks.
Osiyemi made this declaration when the institute paid a courtesy visit to the Governor of Central Bank of Nigeria (CBN) at the bank's head office in Abuja.
Governor of the CBN, Professor Charles Soludo had in a meeting with the Bankers' Committee in Abuja a month ago directed banks to raise their capital base from N2 billion to N25 billion by December 2005. This directive has since been received with mixed reactions within the banking industry as operators pleaded for amongst others, stratification of banks, reduction of the capital base to an average of N12.5 billion as well as an extension of the deadline.
But the ICAN boss told the CBN governor that the association believed that if the CBN policy is well implemented, it will turn the economy of the country around.
She further stated that the N25 billion capitalisation of banks and other CBN reform initiatives, would encourage cooperation among banks, institute corporate governance and discourage one-man bank ownership.
Osiyemi also emphasised that the new policy on capitalisation will be an engine of development of the private and productive sector of the economy.
"If the country continues to sell foreign exchange to bring finished goods into the country as the banks tend to encourage, we will definitely continue to support other people's economies", she said.
The ICAN boss stated that in the new century, for the economy to move forward, there is the need to do a lot of revolutionary things.
She suggested areas of managing the merger and acquisition issues and pleaded with the apex bank to ensure that there is no run on the banks.
She also opined that if CBN and the banks manage the reform initiatives very well, the economy will surely benefit from it.
She, therefore advised CBN to create a safety net to minimise any negative impact from the reforms because there is no revolutionary venture that would not bring about some casualties.
She stated some of the institute's initiatives and the need for CBN and the institute to work closely on those activities.
The CBN Governor, represented by the Deputy Governor, Operations, Dr. Shamsuddeen Usman thanked the ICAN delegation for the visit.
He expressed the bank's heartwarming on the strong support of ICAN for the N25 billion capitalisation of banks and the need for banks to consolidate.
Usman also pleaded with other relevant professional bodies to work together with CBN to find ways of successfully implementing the banking reform policy in order to avoid serious casualties.
He stated that the on-going banking reforms is not the responsibility of only the CBN, but that of every Nigerian to ensure that we improve the banking and financial system to effect economic development and growth.
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