LAGOS—IN furtherance of its decision to withdraw public sector funds from the banking industry, the Central Bank of Nigeria (CBN) is set to withdraw N20 billion belonging to the Nigerian National Petroleum Corporation (NNPC) from banks.
At the last Bankers Committee meeting, the apex bank indicated its intention to pull out public sector funds from the banking industry beginning from this month. This was followed by a letter to chief executives of government parastatals and agencies intimating them that it would withdraw a certain percentage from their deposits in banks .
Already, the apex bank has transferred N4 billion from the bank accounts of Nigerian Telecommunication (NITEL) Limited. Vanguard reliably gathered that the phased withdrawal of public sector funds would continue this week with the withdrawal of N20 billion belonging to the NNPC .
This move is, however, coming amid panic withdrawal of funds being experienced by some banks. A top banking official who confirmed this development said returns received from the branches indicated occurrence of panic withdrawals by depositors due to the recent pronouncement by the CBN governor of raising minimum capital base to N25b. The withdrawal, it was gathered, was both from individual and corporate customers of banks.
Investigations further revealed that the huge withdrawal was affecting the inter-bank activities of those concerned, thus aggravating the scarcity of funds in the inter-bank money market.
However, the CBN Governor, Prof. Charles Soludo, speaking at a media briefing yesterday, justified the decision of the apex bank to withdraw public sector funds from the banks, saying any bank that could not do without public sector fund was not fit to be a bank. He, however, cleared the air on the N25 billion capital base, saying this referred to the shareholders’ funds of the banks .
He said by December 31, 2005, the CBN would not only publish the names of banks that have met the N25 billion capital requirement but also the names of sound banks.
He said the apex bank was considering the possibility of transforming banks that cannot meet the N25 billion capital base requirement into community banks .
