AMCON: CBN, NDIC, Banks Set Aside N1TR For Take-Off

PHOTO: L-R: OUT GOING GMD, UBA GROUP PLC, MR TONY ELUMELU WITH KWARA STATE GOVERNOR, DR BUKOLA SARAKI DURING THE COMMISSIONING OF A BUSINESS OFFICE OF UBA IN EGOSI, KWARA STATE TODAY, JULY 21, 2010.

ABUJA, JULY 21, (THEWILL) - The Bankers’ Committee at the end of their meeting in Abuja today announced that N1.05 trillion is being set side for the Asset Management Company of Nigeria (AMCON) by the central bank, the Nigeria Deposit Insurance Corporation (NDIC) and all banks operating in the country.

The funds will be released in tranches over a 10-year period at a ratio of 0.3 per cent of their balance sheet annually beginning from December, 2010.

Every bank operating in Nigeria will be mandated to comply.

The Committee hinted that AMCON may likely take-off in the next two weeks going by the arrangements already put in place, adding that total assets by the banks as at December 31. 2009 was N14 trillion naira.

Speaking to Finance Correspondents in Abuja at the end of their meeting, bank chief executives gave assurances that AMCON would act as shock absorbers to potential risks troubling the banking industry.

One of them, Aigboje Aig-Imuokhuede, Managing Director of Access bank, explicitly said that the banking industry would add the sum of N1 trillion into the sinking fund.

He further stated that the apex bank has agreed to bring in N50 billion, while NDIC, is yet to state its commitment to the fund which will run for the next decade.

"We have no doubt that when once AMCON is operationalized, the Nigerian banking industry will be starting almost on a fresh slate, a very de-risked banking industry", he said.

"But we know that AMCON has a cost, and what is that cost? The cost is the total amount injected into it vis-à-vis the underlying assets it receives in consideration for injecting fund into the banking industry and how much will they realize after disposing those underlying assets."

Speaking earlier, Director of Banking Supervision of the CBN, Sam Oni had said new banking regulations would be defined around different banking service models explaining that within the next 18 months, confidence would have been restored in the nations banking and finance sector.