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Senate moves to save banks
NDIDI OKAFOR,
Abuja
SENATE moved yesterday to bring some
respite to banks sorely troubled with meeting the N25 billion capital base
requirement, by categorising banks into three and under different minimum
paid-up capital ceilings.
The development is part of a new amendment to the Banks and
Other Financial Institutions Decree (BOFID) No 40 of 1999.
The legislative chamber also moved towards
whittling down the powers of the Central Bank of Nigeria (CBN) by introducing a
new provision giving the Senate the final say in the appointment of governor,
deputy governor and the board of the CBN
Besides, in a proposed amendment to the
CBN Decree of 1999, the Senate raised the apex bank’s capital base from N300
million to N60 billion
Tagged: "A bill for an Act to Amend the
Banks and Other Financial Institutions Decree No 40 of 1999," it deals
directly with the issue of banks’ capitalisation.
The bill, sponsored by Senator Zik Sunday,
chairman, Senate committee on Banking and Currency, proposed a way out of the
N25 billion capital base for banks by categorising banks.
The categorisation contained in Section
9(1) of the new bill reads: "Banks shall be categorised according to paid-up
share capital
There shall be three categories of banks,
namely, mega banks with minimum paid-up share capital of N25 billion; medium
banks with minimum paid-up share capital of N10 billion and small banks with
minimum paid-up share capital of N5 billion."
However, Senator Sunday told journalists
that his committee will conduct public hearing on the amendment bill "to give
all stakeholders the opportunity to contribute and make known their news on it
before its passage."
He denied allegations that the bill is
targeted at emasculating the CBN, saying that "the bill is conceived in the
interest of Nigeria and personally, I don’t have any interest in banks and I
don’t own a bank. Everything we are doing is purely in the interest of the
nation."
Senate also began the process of amending
the Central Bank Decree of 1999 and Banks and Other Financial Institutions
Decree (BOFID) 1999 with a proposed amendment that raised the capital base of
the CBN from N300 million to N60 billion.
The relevant CBN bill which has already
gone through first reading in the Senate is sponsored by Senators Sunday, Farouk
Bello and Isaiah Balat and tagged: "Central Bank of Nigeria Act (Amendment) Bill
2004."
The 38 section amendment bill seeks
specifically to amend Section 4(1) of the CBN law to raise capital base of the
apex bank to N60 billion
A new sub section 6(6) had been brought in
to make it mandatory for the Senate to confirm members of the CBN board.
If the new bill is passed, the governor
and deputy governors of the CBN will be screened and confirmed by the Senate
The new provision, contained in Section
9(1) reads: "The governor and deputy governors shall be persons of recognised
financial experience and shall be appointed by the President, subject to
confirmation by the Senate by instrument under the public seal and on such terms
and conditions as may be set out in their respective letters of appointment."
A five-year tenure of office is also
proposed in Section (2) of the bill for the CBN governor and the deputies.
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