By Agency reporter

Friday, 31 Dec 2010

 

Stakeholders in the financial sector have called on the Central Bank of Nigeria to take measures that will stimulate full recovery of the sector in 2011.

They said the CBN needed to be proactive in implementing policies that would give the sector more stability in 2011.

The apex bank in 2010 introduced some measures aimed at consolidating the reform in the sector.

Some of the measures are limiting bank external auditors‘ tenure to 10 years as well as enforcement of the code of good corporate governances and risk management in banks.

It further enforced its directive on “Know Your Customers” in an effort to curb the activities of fraudsters in banks.

The CBN also introduced on November 15 a new licensing regime for banks which entailed a change in the universal banking system.

Under the new regime, banks are now licensed as regional, commercial, mortgage or holding companies.

Seven banks have already announced their decision to form holding companies in compliance with the CBN directive.

Some of the banks are First Bank of Nigeria Plc and UBA Plc.

The News Agency of Nigeria reports that the implication of their adoption of a holding company structure is that they will still operate their respective subsidiaries.

Two banks, GTB and Diamond, said that they were collapsing their mortgage subsidiaries to form commercial banks while Wema Bank said it would be a regional bank.

The Director for Banking Supervision, CBN, Mr Samuel Oni, said the new banking licensing regime offered new opportunities for investors.

Assessing the reform, a lecturer in the Department of Economics at the University of Ibadan, Dr. Kazeem Bello, lauded the efforts of the CBN in 2010, saying the N75bn bail-out it provided to small and medium-scale enterprises would help to boost the economy.

He said the N500bn bail-out also provided by the apex bank to manufacturers would save the sector from collapse.

Bello, however, urged the Federal Government to address the problems of decayed infrastructure and inconsistent policies in 2011 to ensure meaningful economic growth.

He also said that the inflation rate, which had been fluctuating between 13.5 per cent and 12.8 per cent, was not good for the economy.

 

Source: Punch