Written by Odidison Omankhanlen and Friday Ekeoba, Lagos Wednesday, 14 July 2010

 

Barring any unforeseen circumstance, the Asset Management Company (AMC), an establishment that will soak up bad debts in the banking sector, is set to take off in the next two weeks.

 

This follows the receipt of the harmonised Asset Management Company (AMCON) bill by President Goodluck Jonathan last weekend. AMCON, when signed into law, will give birth to AMC that is expected to buy an estimated $10 billion bad debt from the financial system.

 

Nigerian Tribune gathered that the Central Bank of Nigeria (CBN) and Ministry of Finance are working round the clock to ensure the smooth take-off of the company on July 26.

 

Confirming this development, CBN’s Head of Corporate Communications, Mohammed Abdullahi, said all necessary arrangements were already in place for the company’s take-off in the next two weeks, stating that they were only waiting for the President’s expeditious assent to the bill.

 

According to Abdullahi, all relevant agencies “have set in motion all necessary arrangements for the commencement of operations of AMCON, in anticipation of the presidential assent,” adding that the AMC was quite strategic to the current reforms in the industry.The apex bank and relevant agencies have been in the fore front of the passage of the AMCON Bill.

 

The specific objects of AMCON, according to the bill shall, among others, be to “assist eligible financial institutions to efficiently dispose of eligible bank assets in accordance with the provisions of this act.

 

“Efficiently manage and dispose of eligible bank assets acquired by the corporation in accordance with the provisions of this act; and “Obtain the best available financial returns on eligible bank assets or other assets acquired by it in pursuance of the provisions of this act (having regard to the need to protect or otherwise enhance the long-term economic value of those assets, among others).”

 

AMCON is expected to offer a window through which the banks can discount voluntarily any non-performing loan that is above 10 per cent of their total share capital.According to the bill, “The corporation may, subject to the provisions of this act, within three months of the designation of any asset as eligible bank asset in pursuance of Section 24, specifying a class of bank assets, purchase, on a voluntary basis, eligible bank.

 

Source:Tribune