Consolidation: CBN Help Desk Ready
By Ayodele Aminu
The Central Bank of Nigeria (CBN) help desk geared towards facilitating consolidation in the banking industry is ready.
A memo signed by the apex bank's director of Banking Supervision, Mr. Ignatius Imala, to this effect and addressed to all chief executive officers of banks said further to the release of the guidelines and incentives on consolidation in the Nigerian banking industry on August 5, 2004, the Central Bank of Nigeria had established a Help desk in its Lagos office.
"The Help Desk will attend to all enquires and requests on the project. Enquiries should be made in writing and addressed to: The Help Desk Officer, Consolidation in the Banking Industry, Banking Supervision Department, 10th Floor, Room 1006, Central Bank of Nigeria, Lagos, or by fax to Tel/fax 01- 266262, or 2540709 or by e-mail to: - [email protected].
"All enquiries will be promptly responded to in writing," stated the memo dated August 17, 2004 and titled "Bank Consolidation "Help Desk" at the CBN Lagos Office."
It would be recalled that the banking watchdog had while rolling out the guidelines and incentives on consolidation in the industry promised to establish a "help desk" in Lagos to help facilitate the on going consolidation process.
The apex had among others said it would actively collaborate with all agencies to fast track the process of mergers and acquisition in the industry.
It had also assured workers in the Nigerian banking industry that those laid-off during the expected consolidation exercise would be compensated and allowed access to the SMIEIS Fund to set up their own Small Scale Enterprises.
While assuring the safety of depositors' funds, Soludo had also stated that" the number of non-executive directors in the enlarged bank should be more than the number of executive directors subject to a maximum board size of 20 directors."
To provide a soft-landing for banks especially the distressed ones, he said the CBN would negotiate the write-down of its exposures.
As exclusively reported by THISDAY a day before the guideline was released, Soludo had also confirmed that CBN would provide and pay for a team of experts to provide technical assistance to the banks from August 15, 2004.
In order to ensure that banking institutions do not bear additional burden due to consolidation, which they otherwise would have not borne, and also to encourage consolidation, Soludo listed the following additional incentives that are being worked out to include tax incentives and reduction in transaction costs.
For banks that consolidate and/or are able to achieve the set minimum capital base within the stipulated period, the CBN governor said such banks would be given
Authorisation to deal in foreign exchange, permission to take public sector deposits and recommendation to the fiscal authorities for the collection of public sector revenue as well as prospects of managing part of Nigeria's external reserves, subject to prevailing guidelines.
He however stressed that the only legal modes of consolidation allowed are mergers and outright acquisition/takeover.
Precisely on July 6 2004, Soludo had at an emergency meeting of the bankers' committee in Abuja raised the paid-up capital of banks by 1150 per cent, from N2 billion to N25 billion.
He had advised banks that cannot meet the new capital before December 2005 to merge.
But with bank chiefs who opposed the new capital at various times suggesting other measures like a downward review of the capital base, stratification of banks and deadline extension.
|
