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'How N25bn Capital Base Saved Banking Sector' From Toba Suleiman in Abeokuta Deputy Governor of the Central Bank of Nigeria (CBN), Mr. Tunde Lemo yesteday disclosed that the N25 billion capital base policy for banks in Nigeria has prevented what he described as a severe dislocation in the nation's economy. He said the present CBN team led by Prof. Charles Soludo, inherited a fragile banking system waiting to explode. He made the disclosure while delivering a lecture entitled "Paid-up Share Capital Increase for Nigeria Banks-Effects on customers and patrons," organized by the Abeokuta Chambers of Commerce, Industries, Mines and Agriculture (ABEOCCIMA) to enlighten members of the business community and bank customers in Ogun State. Lemo who was represented by Otunba A.A. Ogunsanya, the CBN branch controller in Abeokuta, said the banking reform policy was designed to strengthen the system and the individual banks so as to empower the banks to re-design and re-conceptualize their mission in a rapidly growing economy. He said the reform would produce banks designed to provide more efficient services to the people as well as channel credible fund to the real sector of the economy. According to him the new banking industry reform was designed as a proactive step to prevent an imminent systemic crisis and collapse of the industry. He said this will create a sound banking system that depositors can trust and can also secure depositors' fund. The CBN boss noted that in the United States, there have been over 7,000 cases of bank mergers since 1980 while the same trend occurred in the United Kingdom. He added that in 1998, a merger in France resulted in a new bank with capital base of US $688 billion while another merger of two banks in Germany in the same year created the second largest bank in that country with a capital base of US $541 billion. On his analysis on Africa, Lemo hinted that it is instructive to note that consolidation of banks is also taking place in the continent. Who Are We ? | About THISDAYOnLine.com | THISDAY People | Contact Us © Copyright 2000 Leaders & Company Limited

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