Bankers have agreed to work together with the Central Bank of Nigeria to achieve consolidation in the country's banking sector.
While agreeing that strong banks with strong huge capital base was good for the economy, the bankers which had put spirited fight against the N25 billion new capital base for banks, resolved to sheathe their swords and work out ways of making the policy succeed.
The bankers, who rose from Bankers Committee Meeting on Tuesday, also allayed fears about the recent withdrawal of public funds by CBN, saying there was no cause for alarm.
Briefing the press after the meeting, the Managing Director, Union Bank Plc, Mr. Godwin T. Oboh said, "Our discussion revolved mostly around how to go about consolidation to avoid any situation of distress," adding that confidence was required in the process and that people should avoid panic.
"We all have come to terms with consolidation as the best solution to the economy of this nation," he said.
Also speaking at the briefing, the Managing Director, Access Bank Plc, Mr. Aig Imoukhuede, said that the banks on the one hand and the Central Bank on the other hand have agreed that consolidation was important for turning the economy around.
Shedding more light on the suspension of public sector funds by CBN, the Director of Operations Department of the apartment, Dr. Sarah Alade said, "The withdrawal was not a one way process, it is the movement of public funds in and out of the system.�
When money becomes excess in the system, it leads to inflation and it is the responsibility of the apex bank to withdraw funds to stabilise the economy. She adding that when there was shortage of liquidity, CBN releases these funds into the system.
The Managing Director of Habib Bank, Mr. Akin Kekere-Ekun also added that if there was too much money in the system, it impacts on the foreign exchange market as exchange rate becomes high.
Dr. Alade, however, debunked the claim that about 25 banks were out of the clearing system, pointing out that although one or two banks were out of clearing, it was only for a brief period, adding that they were back in clearing.
The Committee also agreed that Agricultural projects be given preference in accessing the Small and Medium Industries Equity Investment Scheme. "This fund has limits and how far we can go to finance agriculture sector would tell on our economy," said Oboh.
Asked if the newly inaugurated Association of Nigerian Banks was formed parallel to the Bankers Committee as a result of the bankers' grievance with the new policy, Oboh said that the plan to launch the new association was conceived about ten years ago and had nothing to do with competing with the Bankers Committee.
"The association checks that banks yield to the code of conduct and inculcate discipline in our profession," he stressed.
It would be recalled that mixed reactions followed the CBN's pronouncement, in July, of N25 billion capitalisation for banks in Nigeria, with most of the banks finding it difficult to come to terms with, while the public and other organisations agreed that the policy was for the good of the nation.
