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...Merger Incentives to Be Unveiled Soon Tax break on the card From Cletus Akwaya in Abuja Guidelines for the new capital structure of banks which may include incentives such as lavish tax breaks for banks that have agreed to merge may be unveiled by the Central Bank of Nigeria (CBN) within the next 30 days. THISDAY learnt yesterday that the guidelines are sequel to yesterday's directives to banks to raise their share capital from N2 billion to N25 billion by the end of next year. The incentives, both fiscal and monetary, may include lavish tax breaks for banks that have successfully merged by March next year. THISDAY checks revealed that already, CBN has commenced consultations with the Federal Ministry of Finance on how best to grant the tax breaks to the merging banks. Under the impending guidelines, banks may not be allowed to keep more than 20 per cent of public sector funds as deposits. "The CBN is considering measures to prevent public funds from being given to marginal and under-financed banks to the extent that no bank would be allowed to give loans to a single customer more than 5 per cent of its capital, " sources said. This measure, the sources added was to encourage banks to look elsewhere for their deposits. Soludo had while announcing the new capital base in Abuja yesterday said a technical committee will be raised to work out the new regime of incentives for banks going the way of mergers . He said the technical committee would draw representatives from the Nigeria Deposit Insurance Corporation (NDIC), Security and Exchange Commission(SEC), the Nigeria Stock Exchange as well as the National Assembly. Who Are We ? | About THISDAYOnLine.com | THISDAY People | Contact Us © Copyright 2000 Leaders & Company Limited

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