CBN Plans Recapitalisation For Nigeria’s Banking Sector
The Nigerian Deposit Insurance Corporation has said that planned recapitalisation of the banking industry by the Central Bank of Nigeria (CBN) was a step in the right direction, which would help in reaching the $1 trillion economy target.
The Managing Director and Chief Executive Officer of the Corporation, Mr Bello Hassan, disclosed in his opening remarks at the 2023 NDIC Workshop for Finance Correspondents in Owerri, Imo State.
Speaking on the development, the NDIC Boss said the need to recapitalize the banks was based on the agenda of government.
He said, “The Central Bank has already put forward that they are going to embark on recapitalization. So, it is important for us to just wait and see the clear direction, what that requirement is going to be how much level of recapitalisation will be required.
The CBN Governor, Yemi Cardoso had said that it will call for bank recapitalisation to service Nigeria’s $1trn economy.
As we speak, if you look at the performance of the industry, it is very sound. If you look at the look at the key financial soundness indicators of capital adequacy, liquidity, earnings and quality of assets but certainly, the government is definitely trying to grow our GDP to $1 trillion. You also need bigger banks to be able to play within that space.
As the government is implementing the agenda of growing the GDP to beyond $1 trillion. You also need bigger banks to be able to play in that space and I believe it is within that context that CBN is looking at recapitalising banks. So, we await the CBN for further details on this recapitalisation process.”
He also said that the Corporation is recovering over N400 billion from debtors of liquidated banks, who are unwilling to repay their debts.
Hassan said, “One of the greatest challenges the NDIC is facing is debt recovery. A lot of customers of banks in liquidation that borrowed are not willing to repay those debts.
The NDIC MD also said substantial payments have been paid to over 40,000 depositors of the banks in liquidation, adding that over N1.6 billion has been paid out so far.