The Economists has warned the apex bank about making some mistakes made during the last recapitalisation of commercial banks in the country, following plans by the Central Bank of Nigeria (CBN) to introduce a new capital base for deposit money banks in Nigeria.
The Founder of Centre for Promotion of Private Enterprise, Muda Yusuf; and Prof Segun Ajibola of Babcock University, Ogun State, both spoke on Channels Television’s Sunrise Daily programme today.
The economists agreed that recapitalisation of banks has become inevitable but it must be done in such a way that the mergers and acquisitions that would hit banks won’t lead to massive job cuts.
Yusuf said, what happened in 2005 was unfortunate, with banks been stampeded, urging the CBN to give banks enough time for systemic migration
He suggested a year or two for the process and not for the apex bank to insist on a short deadline like what was done during the era of ex-President Olusegun Obasanjo.
On his part, Ajibola called for strategic consultations between stakeholders for the process to be fluid and successful, saying that the CBN should not force banks into unholy alliances.
Last Friday, CBN chief, Yemi Cardoso said Nigerian banks do not have sufficient capital relative to the finance system needs in servicing a $1trn economy.
As a first step, he announced that the CBN will be directing banks to increase their capital..
The last time the CBN increased capital base for banks was in 2005 when current Anambra State Governor, Charles Soludo, was the apex bank chief.
Capital base was raised from N2bn to N25bn, with more than 80 banks collapsing into about 30 in an unprecedented season of mergers and acquisitions that came with attendant job losses.