You can’t amend CBN Act, Sanusi, ex-CBN govs, others tell Reps•As CBN recovers N620bn bailout fund to troubled banks

Posted by admin CBN (Central Bank of Nigeria), Headlines Tuesday, October 23rd, 2012

MOVES by the House of Representatives to amend certain provisions of the Central Bank of Nigeria (CBN) Act met stiff resistance from the present CBN governor, Mallam Lamido Sanusi; former governors of the apex bank, Mallam Adamu Ciroma and Mr Joseph Sanusi and other stakeholders, as they kicked against the exercise.
This is coming just as the CBN hinted that it had recovered N620 billion bailout fund given to eight troubled banks in 2009.

This came to fore during the public hearing organised by the House Joint Committee on Banking and Currency and Justice, on a bill seeking to amend the CBN Act of 2007.

Specifically, the bill sought to amend the CBN Act to “allow for the appointment of a person, other than the governor as chairman of the bank’s board, as well as exclude the deputy governors of the bank from being members of the board.”

The second leg of the amendment also sought to divest the board of power to consider and approve the annual budget of the CBN.

Sanusi, represented at the public hearing by the deputy governor, operations, Mr Tunde Lemo, maintained that removing the CBN financial autonomy would prevent the bank from discharging its mandate effectively, claiming that the apex bank had been transparent in its budgeting system.

“The CBN has taken steps to improve transparency of its monetary policy by publishing the personal statements of the MPC members and voting patterns in arriving at MPC decisions. To our knowledge, no other country in the African continent does this presently,” he said.

On the N620 billion payback by the troubled bank, the CBN governor said “the fund is not a bail-out,” noting that “it was given as loan to the banks.”

In his presentation to the panel, Mallam Ciroma said “there is nothing to gain from excluding them. In deep conscience and honesty, I cannot find the rationale behind this plan. I urge you to leave this matter, so that you don’t do anything outrageous and non conforming.”

Also, Mr Joseph Sanusi said “if you make the governor an ordinary executive in the board, you have automatically given him complex, especially in the committee of governors, where every other members are chairmen of their countries’ central banks. To be different has serious implications.”

He added that the move by the House would also chase investors away, adding that the proposed amendment would not help the investors’ confidence.

The national president of Chartered Institute of Bankers of Nigeria (CIBN), Mr Segun Aina, in his submission, opposed the proposed amendment, saying that it would not be in line with global management standards for central banks.

Earlier in his opening remark, chairman, House Committee on Banking and Currency, Honourable Jones Onyereri, had said “I wish to reiterate our neutrality and emphasise our commitment to discharging our constitutional responsibilities of law making, oversight and representation without fear or favour.”

-Tribunewp_posts