CBN denies barring 25 banks from clearing house
By Bukky Olajide
THE Central Bank of Nigeria (CBN) has refuted allegations that it has suspended 25 banks from the clearing house.
The clarification was made yesterday by the apex bank's Director of Operations, Dr. Sarah Alade at the Bankers' House, Lagos venue of the 274th Bankers Committee Meeting.
Alade described as untrue reports in some newspapers that about 25 banks had been sent out of the clearing house.
She disclosed that only two banks were temporarily out of clearing and they had since been re-admitted.
The Director of Operations explained that the fact that a bank was out of clearing house did not mean that such bank was distressed.
"They could be out of clearing as a result of liquidity problems with their clearing banks", she said.
Alade then called on the banking public not to exercise fears while the press was also urged to properly verify reports before publication.
On the issue of the withdrawal of public sector funds from the Deposit Money Banks, Alade explained that while the apex bank had suspended the withdrawal of these funds, movement public sector fund was not a one way affair.
According to her, the funds are moved in and out as a monetary policy tool to manage liquidity in the system. "If there is too much money in the public, we have to withdraw it. All our efforts are geared towards making sure that there is adequately balanced liquidity in the system."
The CBN official also explained the rationale behind the suspension of the plan for withdrawal of public sector funds. According to her, the plan was already creating liquidity problem and when the CBN found out, the withdrawal had to be suspended.
The Managing Director of Union Bank of Nigeria Plc, Mr. Gabriel Oboh stated that only N10 billion had been withdrawn from the public funds, as the apex bank had suspended its decision to withdraw public funds from banks.
While allaying fears of distress in the banking industry, Oboh said that banks were co-operating on the Central Bank's directive that they merge for consolidation.
According to him, it was good for the country's banks to be strong, as some of them were too small. "We do not want issues of distress. Therefore, we all have come to terms with consolidation as the best solution to the economy of the nation.
Oboh stated that a body called Association of Nigerian Banks had been planned for close to 10 years, but the incorporation was only effected a few months ago.
He explained that the establishment of the association means that these banks will yield to a code of conduct and inculcation of discipline in the profession.
The Union Bank Chief Executive added that the Small and Medium Equity Investment Schemes (SMEIS) would be considered for funding agriculture, though this was not originally part of the plan.
Managing Director of Access Bank Plc, Mr. Aig Imoukhuede explained that more people were coming to terms with the capitalisation plan of the apex bank.
According to Imoukhuede, both operators and regulators had agreed that consolidation of banks was a great solution.
The spokesman for the apex bank, Mr. Tony Ede, called on the press to verify their reports before publication, saying that the bankers committee had set up an ad-hoc committee to meet with the press regularly.`
