«Home

President Signs Cbns Amcon Bill,what Next?

CENTRAL BANK OF NIGERIA PRESS RELEASE

PRESIDENT SIGNS AMCON BILL

President Goodluck Jonathan today, Monday, July 19, 2010 at exactly 3.28 pm

signed the Asset Management Corporation of Nigeria, (AMCON) Bill into law.

The Act provides the legal backing for the establishment of the long-awaited

corporation.

While signing the bill, President Jonathan stated that “the establishment of

AMCON is a reflection of the Government’s commitment to safeguard the

interests of depositors, creditors, and other stakeholders in the Nigerian financial

system and in doing so rejuvenate the domestic economy.”

According to the President, AMCON will help to stimulate the recovery of the

financial system and ultimately the wider economy through among others,

providing liquidity to the banks by buying their non-performing loans,

recapitalizing the intervened banks, increasing access to refinancing opportunities

for borrowers, increasing confidence in banks’ balance sheets and therefore

Nigeria’s credit and risk ratings, encourage a return of confidence to the capital

market and preventing continued job losses in the banking industry.

He commended the Ministry of Finance, Ministry of Justice and the Central Bank

of Nigeria for the collaboration that was put into the preparation and finalization of

the landmark Bill and he expressed the hope that the signing into law of the Bill

will be an important turning point for the return to strong economic growth and

financial system stability. He also commended the National Assembly for ensuring

the smooth passage of the Bill.

Meanwhile, the CBN and the Federal Ministry of Finance are putting finishing

touches to the setting up of appropriate structures for the AMCON as required

under the Act. It would be recalled that the CBN Governor at the last Monetary

Policy Committee, (MPC) media briefing on July 5, 2010 indicated that he was

hopeful that AMCON would come on stream by the end of September 2010. With

the signing of the Bill, all is now set for the immediate take off of the corporation

in the weeks ahead.

Signed:

M.M.Abdullahi

Head, Corporate Communications

July 19, 2010

http://www.cenbank.org/

Avatar
Newbie
11 answers

Getting the bank to lend to the real economy requires CBN to establish trust in the system.

The Credit bureau directive is a first step in the right direction.

0
Avatar
Newbie

The money that was put into the banks are being paid back with interest , Its not free money

However my point is,the CBN should explore more means of expanding credit growth

U and i know that telling a bank to lend money will not work

It hasnt worked here in the USA also

Like i said before kickstarting a loan securitization industry can help

just like the feds are doing here. . .

0
Avatar
Newbie

@babaogun

Nice work there supporting your works with articles very good

0
Avatar
Newbie

http://www.businessownerdebt.co.uk/hbos-charge-3650-percent-overdraft-on-10/

The estimated costs are based on average figures and the amount of time overdrafts are used.” ‘Very unfair’ Bank customers also complained to Panorama about the Halifax, which is owned by Lloyds Group Plc, a recipient of more than £20bn from the taxpayer in the bailout in late 2008.

They said it was charging an effective annual rate of interest of 3,650% on an overdraft of just £10. Instead of charging advertised interest on overdrafts, the bank is instead charging a flat fee of £1 a day.

But over the course of a year, customers with small overdrafts end up paying a disproportionately high rate of interest.

The Halifax said in a statement that customers have said they “want a clear overdraft charging structure” and the £1 a day represents “a simple set of daily fees”. The bank said it offers a “buffer zone” for overdrafts of less than £10 that is free and that the vast majority of its customers do not go into overdraft. Merryn Somerset Webb, editor-in-chief of MoneyWeek, said of the Halifax policy: “It is very unfair because the interest rates effectively are much, much higher for people with tiny overdrafts than for very big overdrafts. So you can be penalised extraordinarily badly.”

Source: BBC

0
Avatar
Newbie

How does the idea of letting this banks fail sound to you?

The monies used to save them came from peoples taxes

its not out of place to ask them to justify their lending rates

0
Avatar
Newbie

”By the time we have done the mergers and acquisitions, taken off the toxic assets and gone through a recapitalisation process, the supply side of credit will improve,”

Sanusi said.

0
Avatar
Newbie

Sanusi Lamido definitely has been. . . .

Although it is important to note that AMCON itself was first outlined by soludo

So in the event that it is being followed up by Sanusi. .its good

However i do wish Sanusi will look for more innovative ways of encouraging credit growth

This idea of asking or compelling banks to lend just wont work

What we need is a good way to securitize loans,and banks also need to be able to raise long term funds

perhaps issue dollar denominated bonds in international markets with CBN backing

0
Avatar
Newbie

In my own understanding, what they intend to do is make Asset Mgt Companies buy up non performing loans collaterised with shares (which have lost most of its value in the stock marlket).

The cash received by banks from AMCs will then be used to extend lending to the real sector of the economy. The real sector being manufacturing, commercial etc companies.

Right now, banks are not lending to most people becos they are not in a position to. It also affects your naira in GTB becos if the banks don't lend they can't make enough income to pay you interest on your deposit or better still, they can't guarantee if you knock on their door tomorrow that they will even give you your deposit.

It is very important that CBN and all stakeholders get the post banking reform right.

0
Avatar
Newbie

I don't agree they have been touting AMCON as the panacea for the Nigerian Banking Sector.

The AMCON aims to purchase select toxic assets (capital markets related) of Nigerian deposit money banks.

Very interesting indeed. i just hope it is properly monitored and controlled.

http://www.nigerianinquirer.com/2010/06/09/lamido-sanusi-on-the-asset-management-corporation-of-nigeria-bill/

interesting interview on the link above. I don't trust the Charles guy though.

0
Avatar
Newbie

It seems to me that the CBN has been touting this bill as the panacea for the Nigerian banking sector

However the establishment of this "bad bank" is just the beginning

How will the CBN value the toxic assets to be bought

and how do they guarantee fairness to all banks that would want to dump these toxic assets

Several countries that have had bank crises like we have now include mexico,sweden,indonesia and south korea

of course not forgetting the usa,uk,ireland, and japan(who have been accused of letting their bank problems drag for too long)

It is going to be interesting to see how this all plays out

0
Avatar
Newbie

Abeg - All this grammer sef - Please lay man terms

How does this affect my naira in GTB

Cheers

0
Avatar
Newbie
Your answer
Add image

By posting your answer, you agree to the privacy policy and terms of service.