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Tuesday, 24 September 2013
CBN, DBMs to raise sinking fund’s profile with new contributions
•SEC opposes AMCON’s ‘overriding’ powers
THE Central Bank of Nigeria (CBN) and Deposit Money Banks (DMBs) in the country have agreed to establish a sinking fund to serve as a safety net for the Assets Management Corporation of Nigeria (AMCON), to meet its obligations arising from debt securities issued by it.
While the CBN is to contribute N50 billion to the fund- which is otherwise called the Resolution Cost Fund- DMBs will be required to contribute 50 basis of their total assets yearly.
Chairman of the House Committee on Banking and Currency, Jones Onyereri disclosed this Monday in his welcome address at a one-day public hearing on a Bill to amend the AMCON Act, 2010, organised his committee.
According to him, the amendment was aimed at strengthening AMCON as an institution that could efficiently carry out its function.
He said the Resolution Cost Fund will “insulate
the tax payer from obligations occasioned by financial mismanagement by the banks. The bill provides for a Board of Trustees to oversee its supervision, administration and management of the Fund”.
He added: “The key component of the amendment bill relates to setting up of a Sinking Fund or Resolution Cost Fund.
“It basically obligates banks to contribute annually an amount equivalent to 50 basis points of its total assets to the Fund and CBN to contribute N50 billion to the Fund.”
Onyereri disclosed that about N600 billion recovered from bad debts by AMCON had restructured a lot of non-performing loans.
Meanwhile, the Securities and Exchange Commission (SEC) has kicked against section 60(c) of the proposed amendment to the bill, which seeks to exempt AMCON from complying with the provisions of the Investment and Securities Act (ISA) 2007.
SEC, represented by its Executive Commissioner, Legal and Enforcement, Hajia Saadatu Mohammed Bello, submitted that AMCON should comply with the ISA 2007 with respect to capital market matters, because non-compliance would mean the corporation’s power superseding the nation’s constitution.
Earlier, Speaker of the House of Representatives, Aminu Waziri Tambuwal, whoddeddeclared the event open, said that AMCON was created out of the need to cushion the public against future shocks in our banking system.
Represented by the Deputy Minority whip, Garba Datti (APC, Kaduna), Tambuwal said that as elected representatives of the people, it was the duty of the parliament to protect the welfare of the people who had borne the major brunt of financial institutions.
Other stakeholders in attendance include, Nigeria Deposit Insurance Corporation, Guarantee Trust Bank, Mainstreet bank, Skye bank, Keystone Bank, Stanbic Bank and financial experts.