By Emele Onu, 07.28.2010

 

Central Bank of Nigeria (CBN) said yesterday in Lagos that while it ensures that all parties are carried along in the recapitalisation of the banks, it has a duty to ensure that wrong persons do not buy or take over the institutions.CBN Deputy Governor, Financial System Stability, Kingsley Moghalu, made the apex bank’s position known at the annual public lecture of the Association of Corporate Affairs Managers of Banks (ACAMB).

 

He pointed out that although shareholders oversee the recapitalisation, the CBN  as a regulator must approve any changes in the ownership of the affected banks.He also called on the government and relevant agencies to enact new laws and create an environment that will improve the economy as well as offer protection to banks against distress.“The Central Bank will not and should not, allow persons or interests with questionable track records to take over Nigerian banks,” he said in a paper: “The Global Redesign of Banking: The States for Nigeria.”Moghalu said it is also true that the shareholders of the banks cannot recapitalise them and urged shareholders to entertain new investors that will not just bring the money but inject sound governance and risk management.

 

“While shareholders can certainly participate in the recapitalisation of their banks, it remains to be seen whether, given the present state of the economy and the capital market most of these shareholders have the vast sums of money that will be required to close the holes in the books of the banks and restore shareholder value. Therefore, they ought to take a serious look at the institutions and strategic investors that are indicating interest in their banks to their boards of directors and have the required resources. “And they need to consider not just who has the money to invest, but who is most likely to bring higher standards of corporate governance and risk management, the absence of which ran their banks aground in the recent past,” he said.

 

Source:ThisDay