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...For a better society... Friday, August 20 2004 Vol 17 No.30 News Editorial Politics Opinion Foreign News Fashion Metro Sports Features Columnists View from America Business Money/Market Maritime Aviation Motoring Rail/Road N25bn base deadline: Market forces�ll dictate banks� fate CBN KENNETH MADUEKE CENTRALBank of Nigeria (CBN) has denied allegations that it has pegged the number of banks to emerge at the end of December 2005 deadline given banks to recapitalise to N25 billion. Deputy Director (Corporate Affairs) of CBN, Mr. Tony Ede, made this clarification when he visited Champion House, the corporate headquarters of Champion Newspapers Limited (CNL) in Lagos. Mr. Ede said market forces will determine the number and fate of banks at the end of the banking sector reforms, adding that many banks may be circumstantially compelled to transform to community banks. He said the CBN expects banks to fully consolidate in meeting the new minimum capital base instead of attempting to go it alone. The CBN spokesman restated that a mere group arrangement is not acceptable for this purpose as the only legal modes of consolidation allowed are mergers and outright acquisition. "The idea of family banks claiming to meet the new capital base of N25 billion alone is unacceptable to the CBN," he said. According to him, the banking sector reform is good for the economy, more so as it would enable banks to freely play in the globalised economy. He said the N25 billion capital base represents 0.25 per cent of Nigeria�s Gross Domestic Product (GDP) at $65 billion, adding that this still makes them small banks compared to global rating. On the short time frame of 18 months for the recapitalisation, Mr. Ede said it was rather generous enough. � 2004 @ Champion Newspapers Limited (All Right Reserved). Powered By dnetsystems.net dnet�

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