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B N W: Biafra Nigeria World News |
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Banks want CBN, others to cut charges by 90 per cent
BANK chiefs at a retreat on mergers and acquisition in Abuja at the weekend have demanded for a 90 per cent fee waivers from the Central Bank (CBN).
The apex bank's governor, Prof. Charles Soludo, revealed this to reporters at the end of the retreat.
He named the fees for which waivers were being sought by the operators as all charges by the Securities and Exchange Commission (SEC), the Corporate Affairs Commission (CAC), the Nigerian Stock Exchange (NSE) and the Stamp Duty charges of the Federal Inland Revenue Service (FIRS). He said the CBN was still analysing the request and would push for a legislation in this regard.
The forum was organised by the CBN to acquaint the bank chiefs with the reforms, particularly the new N25 billion capital base.
Soludo said the regulatory bank was willing to assist all banks intending to consolidate and warned those that were yet to decide to do so without delay because time was not on their side, adding that the CBN would not go back on the policy or extension of the deadline.
His words: "For those banks that are yet to commence consolidation process seriously, my candid advice is that they should seriously begin. Even though the legal time limit is December 2005, time is extremely of the essence, and we need to move fast."
Soludo continued: "The more we delay, the more likely the franchise value of a bank is diminished as depositors pass judgement on which banks are likely or unlikely to make it. The goal of the CBN is to ensure an effective consolidation programme at the least possible cost. If we would have our way, we would wish that no bank is left behind... If we all work together and fast too."
Speaking further on the outcome of the retreat, which the West Africa Institute for Financial and Economic Management (WAIFEM) co-sponsored, Soludo hinted that four syndicate groups had been constituted to discuss the areas of implementation of the consolidation process.
He listed the areas as structure of constraints, structure of incentives, structure on legal and institutional issues and the structure on information technology.
The CBN chief also stated that certain issues evolved from the retreat, which would require a legislation to back up. He added that the apex bank would take the suggestions to the authorities which will equally forward same to the National Assembly for the necessary law.
He dismissed the fear that the consolidation policy may not outlive his tenure at the apex bank, pointing out that for the operators in the industry, it is an excellent opportunity which has opened to them a window of the much need air of life.
The issue of going back to the old model is not there. The field for the competition has changed and only those who play by the rules; only those who play transparence; only those who are able to add value to the Nigeria economy can survive and everybody wins.
"The depositors can go to sleep, the investors can rely upon them to finance their investments and everybody is a winner; the regional economy is a winner; the shareholders would see better return on their investments. That's why I said it is no longer going to be the same. So, it is not a thing you say okay let me jump in and tomorrow, I want to go back because the field has changed. The goal post has shifted. The rules have changed and it is not the same again", he asserted.
On the fate of bank workers to be affected in the consolidation process, Soludo said they would be assisted with the Small and Medium Industries Equity Investment Scheme (SMIEIS) fund to set up their own business while the CBN was in the process of setting up an Asset Management Company to tackle the problems of banks that are merging or that are being acquired.
The retreat, which was also attended by bank directors and officials of the Nigeria Deposit Insurance Corporation (NDIC), SEC, NSE, FIRS and technical experts, was aimed at networking and brainstorming on issues and challenges of implementing the Nigerian model of banking sector consolidation.`
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