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Sanusi Wants More Money For AMCON

By on October 26, 2011

Governor of the Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi has asked the Senate to expedite action on the amendment of the Asset Management Corporation of Nigeria (AMCON) Act which would raise the intervention fund from N500 billion to N3.1 trillion.

Sanusi said this at an interactive session with the Senate Committee on Banking, Insurance and other Financial Institutions on Wednesday.
The CBN Governor told the Senator Ayoade Adeseun-led committee that the apex bank has since realized that the initial N500 billion was not enough for the intervention. Sanusi who attended the parley with all his deputies told the committee that the initial N500 billion is grossly inadequate and that the increment was approved by late President Umaru Yar’Adua.

“When we started the process and after the initial process, we were under the impression that the capitalization fund was under N500 billion.
“We received the approval of late President Umaru Yar’Adua for government to release N500 billion but with time, the whole amount turned out to be bigger and by the time the process began, we discovered it was not N500 billion but above N3.1 trillion. “The CBN felt it would not be morally right to ask Nigerian tax payers to pay N3.1 trillion to bail out the banks and called the banks to a discussion and told them we could not capitalize with that amount”.
He told the committee that AMCON was not covered to pay the money saying “but the banking sector took up the responsibility of paying and we agreed to set up a sinking fund. N500 billion was approved and paid but CBN put N50 billion for ten years”.

Sanusi pleaded with the committee to prevail on the National Assembly to pass the proposed amendment saying “we have reached an agreement with the banks that led to the intervention. “We want you to please take the amendment as approved because we had a gentleman’s agreement with the banks. CBN is paying about 20 per cent of the bailout and many of the banks contributing are not involved in the collapse.

“If we now renege on our agreement, it will not speak well of us. We want you to take the amendment as proposed and we shall go to the House of Representatives to make the same case”, Sanusi told the committee. Defending CBN’s action to take over some banks, Sanusi told the committee that he is committed to protecting depositors’ funds and not bank shareholders. “It is my job to protect depositors. If you go and buy shares, you are taking a risk. The banks paid dividends, you took the dividends; share prices 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.