BNW

B N W: Biafra Nigeria World News

...Why FG Increased Capital Base From Cletus Akwaya in Abuja The desire by the Federal Government to maintain low interest rates in the financial sector may have been one of the major reasons for the increase of capital base of the nation's banks to N25 billion. Governor of Central Bank of Nigeria(CBN), Prof Charles Soludo had in a meeting with the Bankers Comittee in Abuja yesterday announced government's directive that banks raise their capital base from N2billion at the moment to N25 billion by December 2005. But sources close to the apex bank told THISDAY yesterday that the decision to increase the share capital of banks was taken in order to reduce the number of banks operating in the country from the current 89 to a minimum of 12 and a maximum of 18. This, it was learnt, would also make supervision less cumbersome and therefore more efficient and bring about greater professionalism in the sector. "It is expected that when banks merge it will drive down the cost of running institutions including the cost of maintaining bank directors and that will invariably drive down cost of funds to some extent," a presidency source told THISDAY. In introducing the new measure, the sources explained, "government expects that with banks big in size, speculation in foreign exchange and the get-money-at-all-cost syndrome which currently obtains in the system will reduce." CBN, it was learnt, had introduced the new measure in response to President Olusegun Obasanjo's repeated appeal to banks to work towards reducing the interest rates in order to bring down the cost of funds thereby alleviating the financing problems faced by operators in the real sector of the economy. The CBN was, however, said to have assured the president that it would consider more fundamental strategies capable of gradually forcing down interest rates with greater efficency to ensure stability in the system. Who Are We ? | About THISDAYOnLine.com | THISDAY People | Contact Us © Copyright 2000 Leaders & Company Limited

	BNW News
Voice of Biafra | Biafra World | Biafra Online | Biafra Web | MASSOB | Biafra Forum | BLM | Biafra Consortium
	© 2001 BNW BiafraNigeriaWorld  Privacy Policy ---------------------------------------------------------------------------------- Powered by ACENetwork ----------------------------------------------------------------------------------
	Axiom PSI Yam Festival Series, Iri Ji Nd'Igbo the Kola-Nut Series,Nigeria Masterweb