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Bank Directors Demand Consultation On Recapitalization Policy, Three-Year Time Frame



naira official market

Chairman Bank Directors Association of Nigeria, Mr Mustafa Chike-Obi says Nigerian banks will advocate for a seamless implementation of the Central Bank of Nigeria, CBN recapitalization process in a way to avert a chaos that will crowd out the market.

Chike-Obi who is also the chairman of Fidelity Bank said that the banks will welcome consultations from the apex bank in fashioning out the seamless process.

Speaking in an interview, Chike-Obi said that Fidelity Bank like some other banks had been conscious of the need to raise capital essentially flowing from the depreciation of the naira and had commenced a recapitalization policy that will be completed in the next year., however, reports that the recapitalization policy of Fidelity also delves into the medium term vision of the new management in raising the bank into a tier-1 bank.

Speaking in an interview on Arise News Television monitored by Mustafa-Obi said that the bank directors will give a robust response to the CBN governor at the forthcoming bank directors’ summit in Abuja.

Speaking on the policy initiatives articulated by Governor Yemi Cardoso at the Chartered Institute of Bankers of Nigeria, CIBN dinner last weekend, Chike-Obi said:

“We will have a robust reaction to not just Mr Cardoso’s policy directives, but also to Mr Wale Edun. It is incumbent on bank directors to respond to them in a more robust and formal manner.”

While welcoming the policy initiatives of the apex bank and the federal administration, he however, expressed concern over the implementation of what he otherwise hailed as good policies.

“You have to have good policies and you have to execute them well. All the policy initiatives I heard I think are worth well and I fully support them. However, the devil is in the detail.

“So far the execution of worthwhile policies like subsidy removal, the unification of the exchange rate haven’t been flawlessly implemented leading to results that are less than optimal. So while the police are very good we welcome consultatiosn with the banks.”

Speaking on Governor Cardoso’s assertion on imminent recapitalization, the banks’ directors CEO said:

“In June, Fidelity Bank which I am chairman realized that we needed more capital and we are well on the road. (But) banks should not go into the market and crowd out the market but there should be enough time.”

“We know that banks need more capital but what we will ask is that there is consultation on the amount of capital that is required by CBN and that there is an orderly process so that the banks don’t go into the market in a short period, crowd out the market because these investments that people will bring into the banks can be used for other important things. “So, there should be a period, I will say, over three years through which the CBN should give for banks to manage an orderly process because this requires AGM or EGMs, it requires a lot of processes.”

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