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N/Assembly splits over N25bn base
COSMAS EKPUNOBI, Abuja and
INEM AKPAN-NSOH, Uyo
HOUSE of
Representatives yesterday differed with the Senate over the N25 billion fresh
capital base requirement as the matter splits the National Assembly.
The House stressed that the requirement
could restore public confidence in the banking system.
Besides, the House also opened a new vista
into the basis for the requirement, saying it would enable the Central Bank of
Nigeria (CBN) fully settle depositors from the capital base in the event of bank
collapse as against the present system where the Nigerian Deposit Insurance
Corporation (NDIC) pays out a meagre flat rate of N50,000 irrespective of
deposit.
Senate had, after a recent meeting with
CBN Governor, Prof. Charles Soludo, clarified its position on the N25 billion
matter, saying it did not support the hiked capital base and threatened to
punish the CBN by, among others, reviewing the statute establishing the apex
bank.
As the House of Representatives disclosed
its supportive position on the issue, Deputy Governor of Akwa Ibom State, Obong
Chris Ekpenyong, also threw his weight behind the CBN’s banking sector reforms.
Deputy Chairman of the House Committee on
Banking and Currency, Hon. U.S.A. Igwesi, told newsmen yesterday in Abuja that
the capital base increase would shore up the banking sector so that the CBN can
pay depositors their full monies in case of banks totter and fold up.
He said the committee had since discovered
that some sick banks, adding that the measure would flush out such banks from
the system.
Hon. Igwesi said the increase in the
capital base for banks was the best thing that had happened to the economy in
the recent time.
According to him, CBN expected to pay
depositors from such capital base in the event their bank go under.
This he said, would be against the current
policy where the NDIC pays only N50,000 to each depositor, irrespective of his
or her deposit with the affected bank in case of collapse.
"In fact, I see to N25 billion fresh
capital base as a step in the right direction," he said.
The deputy chairman described the
appointment of Prof. Soludo as the best thing to have happened to the banking
industry.
He, however, advised the banks to go ahead
with their merger talks rather than kicking against the new capital base.
Some other lawmaker, including the Deputy
Chairman, House Committee on Environment, Ngida Gella spoke in the same vein.
On his part, Obong Ekpeyong, who spoke
during the formal opening of Mutual Alliance Mortgage Bankers, Ikot Ekpene
branch, the larger benchmark for banks would enable them to fund the emerging
local productive sector as well as other long-term projects.
"There is a crying need to reposition
Nigerian banks to adequately meet the emerging challenges of the Nigerian
economy," he added.
To achieve this, the deputy governor said
the sector must be large and strong enough to finance long-term projects and not
only short-term fundings, which he observed had been the niche of most banks
today.
He called on the CBN to also prevail on
commercial banks to reduce their interest rates.
According to the
businessman-turned-politician, the economy as at today was reeling under the
crushing burden of heavy interest.
Obong Ekpenyong noted that the average
lending rate of 40 per cent in the banking industry was the highest in the
world, wondering how the real sector of the economy could thrive with such
rates.
He observed that with such high rates the
operators in the real sector would have to transfer same to their commodities.
Earlier, the managing director of the bank, Mr. Callistus
Ogwumba said the bank came to Ikot Ekpene to introduce the people of the area to
a superior banking option.
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