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N25bn bank capital: CBN won’t accept
redundancy
•Bishops warn on job loss
DAVID AGBA, Abuja and NKIRU OKEKE,
Enugu
CENTRAL
Bank of Nigeria (CBN) yesterday declared that it would not shoulder the
redundancy to arise within banks on account of meeting the N25 billion capital
base requirement and other banking sector reforms.
The CBN also urged banks yet to
consolidate to meet the requirement to hurry up and do so.
The apex bank’s position came as Bishops
of the Church of Nigeria (Anglican Communion) rose from their standing committee
meeting in Enugu calling on the Federal Government to ensure that bank
recapitalisation does not lead to retrenchment in the sector.
The bishops also dwelt on other national
issues such as insecurity, unemployment, public power supply and others, but
were silent on the matter of homosexuality touted to be a major agenda during
the meeting.
Speaking during the weekend at the end of
a retreat for bank chairmen, chief executive officers and directors, CBN
Governor, Prof. Charles Soludo, said the apex bank is committed to incurring the
least cost in the consolidation process so as "to prevent the boom and burst in
the sector over the years."
The retreat was organised by the CBN in
collaboration with the West African Institute for Financial and Economic
Management (WAIFEM) in Abuja.
Professor Soludo stated that if the CBN
would shoulder any redundancy, it would do so in collaboration with the bankers
committee from part of the Small and Medium Enterprises (SMEIs) fund.
The governor hinted that the first group
of banks that have consolidated, known as First Consolidated Banks of Nigeria (FCBN),
have set a three month agenda within which to complete the exercise,
particularly mergers.
Professor Soludo stressed that there was
no going back to the old model, noting that the field of competition has changed
and stressed that only banks which play transparently can survive.
On the benefits of the retreat, he said it
produced profound outcome and had thrown up consensus to play along in the new
banking sector reform, adding that the reform was a policy which time had come.
Issues discussed during the retreat
included the structure of the constraints, incentives to banks, Information and
Communication Technology (ICT) models, the CBN governor said, adding that some
of the issues will need legislation as such matters will be tabled before the
National Assembly.
Professor Soludo advised those banks that
have not started consolidation talks to do so in earnest, even though the legal
termination time limit is December 2005.
"The more we delay, the more likely the
franchise value of a bank is diminished as depositors pass judgements on which
banks are likely or unlikely to make it," he remarked.
The CBN governor stated that the apex bank
was willing and ready to lend a helping hand to banks in need of such
assistance, urging them to take advantage of the incentives being provided to
smoothen the recapitalisation and consolidation process.
He also hinted that the CBN was discussing
with the fiscal and other regulatory authorities to provide appropriate
incentives in order to minimize cost to the banks and encourage them to
consolidate.
Meanwhile, rising from a standing
committee meeting held at the Cathedral Church of the Good Shepherd, Enugu,
Bishops of the Church of Nigeria (Anglican Communion), in a 12-point communique,
signed by the Archbishop Metropolitan, and Primate of the church, The Most Rev.
Peter Jasper Akinola, noted that mass retrenchment in the banking sector would
exacerbate the high level of unemployment in the country.
The bishops, however, commended
governments initiative on the capitalisation of banks.
On the efficiency of the National Electric
Power Authority (NEPA), the bishops observed that the parastatal has not
improved as anticipated and lamented the negative impact of the situation on
large, medium and small-scale industries in the country.
The bishops also called for sustained
efforts in the fight against the prevailing state of insecurity in the country,
contending that the situation would frustrate efforts by government to attract
foreign investment and tourism.
They noted the increase in unemployment,
adding that the development has given rise to high rate of crime in the country,
"bearing in mind that poverty alleviation programme is not succeeding."
The communique said, "the church observes
that the Nigerian police has continued with impunity to extort money from
motorists as if it were a legitimate toll."
The bishops condemned the trend of
reckless weapon handling by the police which has led to indiscriminate shooting
and loss of innocent lives.
"The police’s behaviour is a terrible
embarrassment and this has caused great damage to our national image," they
said.
"This church repeats its earlier call for
a national conference to restructure the country into a true federalism, so as
to ensure justice and equity," they added.
Daily Champion
observed that though the Bishop of Enugu Diocese, Rt. Rev. (Dr.) Emmanuel
Chukwuma, had told journalists last week that the committee would take a stand
on the issue of homosexuality, which has been a contentious issue within the
church, the communique was, however, silent on the matter.
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