CBN gets power to clean up banks’ N1.5tr toxic assets
Vincent Ikuomola 20/07/2010 00:49:00
The Central Bank of Nigeria (CBN) Monday got the legal muscle to clean up the banks and its N1.5 trillion toxic assets.
Top officials of the apex bank exchanged back slaps after President Goodluck Jonathan signed into law the Asset Management Company of Nigeria (AMCON) Bill that will set in motion the final resolution of the banks’ non-performing loans.
The Bill was long awaited, pushed by CBN Governor Sanusi Lamido Sanusi as part of the amortisation strategy to get something back for shareholders and depositors.
Sanusi said after the ceremony that the stage is now set for the final phase of the resolution of the banking crisis, adding that: this is also the tool for clearing up the banks’ balance sheets to ensure that they put the past behind them and move to the new dispensation.
The President said the Bill would ensure the stability of Nigeria’s financial sector.
"I sign this bill today in full recognition of the critical role that AMCON will play in achieving these two critical objectives for our economy," President Jonathan said at the brief ceremony at the Presidential Villa, Abuja.
The law takes immediate effect.
The President, who spoke after signing the bill into law, said once it becomes fully operational, it will help to stimulate the recovery of the financial system from recent crisis by boosting the liquidity of troubled banks through buying their non-performing loans, helping in the recapitalisation of banks in which the Central Bank of Nigeria (CBN) was forced to intervene and increasing access to restructuring/refinancing opportunities for borrowers.
AMCON, Jonathan said, will also help in boosting confidence in the banks’ balance sheets and Nigeria’s credit and risk ratings, restore confidence in Nigeria’s capital markets and prevent continued job losses in banking.
The company, according to the President, is a manifestation of the Federal Government’s commitment to safeguarding the interests of depositors, creditors and other stakeholders in the financial system.
President Jonathan praised the Federal Ministry of Finance, the Federal Ministry of Justice, the CBN and the National Assembly for the effort they put into the preparation and passage of the bill and expressed hope that its signing into law "will be an important turning point in our return to strong economic growth and financial system stability".
The Minister of Finance, Mr. Olusegun Aganga, who spoke to reporters at the end of the ceremony, said the next step is to establish the management team.
"Now that the new law is in place we have the instrument to operate with. The next step will be to establish the Board, the management team and to start engaging with the banks. We are now going to get in to proper operations. The legal frame work has been signed by the President and we are ready to go," the minister said.
Sanusi said the President basically re-affirmed his commitment to cleaning up banks’ balance sheets and for restoring confidence in the capital market and returning the country to the path of growth.
Vincent Ikuomola 20/07/2010 00:49:00
The Central Bank of Nigeria (CBN) Monday got the legal muscle to clean up the banks and its N1.5 trillion toxic assets.
Top officials of the apex bank exchanged back slaps after President Goodluck Jonathan signed into law the Asset Management Company of Nigeria (AMCON) Bill that will set in motion the final resolution of the banks’ non-performing loans.
The Bill was long awaited, pushed by CBN Governor Sanusi Lamido Sanusi as part of the amortisation strategy to get something back for shareholders and depositors.
Sanusi said after the ceremony that the stage is now set for the final phase of the resolution of the banking crisis, adding that: this is also the tool for clearing up the banks’ balance sheets to ensure that they put the past behind them and move to the new dispensation.
The President said the Bill would ensure the stability of Nigeria’s financial sector.
"I sign this bill today in full recognition of the critical role that AMCON will play in achieving these two critical objectives for our economy," President Jonathan said at the brief ceremony at the Presidential Villa, Abuja.
The law takes immediate effect.
The President, who spoke after signing the bill into law, said once it becomes fully operational, it will help to stimulate the recovery of the financial system from recent crisis by boosting the liquidity of troubled banks through buying their non-performing loans, helping in the recapitalisation of banks in which the Central Bank of Nigeria (CBN) was forced to intervene and increasing access to restructuring/refinancing opportunities for borrowers.
AMCON, Jonathan said, will also help in boosting confidence in the banks’ balance sheets and Nigeria’s credit and risk ratings, restore confidence in Nigeria’s capital markets and prevent continued job losses in banking.
The company, according to the President, is a manifestation of the Federal Government’s commitment to safeguarding the interests of depositors, creditors and other stakeholders in the financial system.
President Jonathan praised the Federal Ministry of Finance, the Federal Ministry of Justice, the CBN and the National Assembly for the effort they put into the preparation and passage of the bill and expressed hope that its signing into law "will be an important turning point in our return to strong economic growth and financial system stability".
The Minister of Finance, Mr. Olusegun Aganga, who spoke to reporters at the end of the ceremony, said the next step is to establish the management team.
"Now that the new law is in place we have the instrument to operate with. The next step will be to establish the Board, the management team and to start engaging with the banks. We are now going to get in to proper operations. The legal frame work has been signed by the President and we are ready to go," the minister said.
Sanusi said the President basically re-affirmed his commitment to cleaning up banks’ balance sheets and for restoring confidence in the capital market and returning the country to the path of growth.
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