Failed banks:Sanusi Seeks Fresh N500bn For AMCON

The governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, yesterday appealed to the Senate to approve the request to increase the contribution of the federal government to the Asset Management Company of Nigeria (AMCON)
to N500 billion.

Sanusi who responded to questions from senators at an interactive session organised by the Senate Committee on Banking, Insurance and Other Financial Institutions, also declared that he had no regrets in the ongoing banking reforms aimed at protecting depositors.

He told the lawmakers that his job was to protect the depositors against the backdrop of the recent recapitalisation in the banking sector, and not the shareholders.

According to him, the CBN is not under any obligation to return anything to shareholders of failed banks, adding that he was glad that they were not happy with him.
Sanusi said that what he did was done to protect the depositors as he was appointed by government to protect them.

However, Lamido lamented that the bill which was forwarded to the parliament? seeking to increase the amount was thrown out by the House of Representatives.
He said, “The CBN will contribute N500 billion according to the bill which is before the Senate.

It is unfortunate that we could not meet with the House of Representatives before the amendment bill was thrown out. I appeal to you to take the amendment because we have an agreement with the banks. And many of them were not involved in the problem that led to the situation we see now. We are pleading that we have agreement and, if we renege, it will not be good.

“It is my job to protect depositors. If you go and buy shares, you are taking a risk. The bank paid dividends, you took the dividends. Share price went up, you sold and tripled your money. Those that sold made money. Those that didn’t sell lost; it is a risk you took.

“The depositor did not go to lose money. We told them don’t put your money in the pillow, go and put in the bank. He expects to get that money on demand. My obligation is to make sure that every depositor gets his money. I have no obligation to the shareholders. It is not my job.
I am serving depositors.

“Shareholders are not happy with me. I understand that and I accept it. I am happy that they are not happy because that means that I am doing my work.’’

Speaking on non-interest banking, the Central Bank governor, who noted that he was surprised that the concept was being misconstrued and generating some criticisms, said that he was ready to approve for the take-off of any non-interest banking in Nigeria that is operated elsewhere, adding that the CBN would study the guidelines, just as he stressed that he was not prepared to join issues with religious leaders on their position relating to non-interest banking.

Lamido, who noted that Islamic banking is now a product globally, however, reiterated that non-interest banking just introduced in the country is in the interest of the country, not a particular religion.

On why he did not wait for the deadline to elapse before he took over the banks, the CBN governor said, ‘’If you go back to the newspapers, when I set the deadline for September 30, everybody said it was not possible. How did we fight back. We had realised that, in many cases, this would have been concluded earlier, some people were playing games, you are a shareholder, you appoint a board and management, your management throws away bank assets, giving bad loans and losing the money. We seized the bank, we find your partner by going to court to take all sorts of injunctions.

“I am not talking about the obligation. You know we said in 2009 that we all know the chain, we can only talk about the things that have been decided in court, we know the chain of a CEO from whom we have recovered about 200 pieces of real estate in the United Arab Emirate plus property in America, plus property in South Africa. Where were the shareholders when over 300 billion naira of depositors funds were being stolen?

These are the shareholders that we are talking about. Where were they? Now we come and save the Institution and shareholders are talking about their rights, not about the rights of the depositors.
“But what is the option, I am looking at banking.”