CBN, NDIC plan AMCON’s replacement

Warn on Bitcoin transactions
The Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC) have commissioned a study on the establishment of an institution that would take after the Asset Management Company of Nigeria at its expiration.

The institution, which is being scripted as a private sector-led initiative to avoid the use of public fund to bail out failed institutions again.

The Managing Director and Chief Executive Officer of NDIC, Umar Ibrahim, who disclosed this in Lagos, at the weekend, said the issue of what happens after AMCON’s era is very important because everyone knows what had happened.

“There are concerns about using taxpayers’ money to bailout institutions. So, it is in line with the global best practice that we go back to the drawing board because our initial concept of AMCON in the early 90s was that of a joint venture between the private and public sector investors.

“This is to minimise the risk of using taxpayers’ money to resolve the problem of buying and selling of bad loans. So, we have established a joint committee that would look into this and we hope that in the long run, we should be able to establish a second AMCON that would be private sector driven.

“Others can invest in it and if the CBN, NDIC or the finance ministry can invest in it going forward, we then know that buying and selling of bad loans would be under the control of that entity. That would pave way for the gradual transition or folding up of the present AMCON,” he said.

The Chairman, House Committee on Insurance and Actuarial Matters, Femi Fakeye, however, applauded NDIC, describing it as the power behind the banking system.

While assuring the lawmakers’ support for the institution, expressed gratitude to God that there was no obvious report of failed bank in the country.

“The Non-Performing Loans (NPLs) are rising as a result of some of the unavoidable sectoral problems. It is not unique to Nigeria, but we would mind our business because this is Nigeria.

“We have to worry about how we ensure that this level of NPL does not aggravate our economic problems. I also want to NDIC to maintain the level of industrial peace in the system. I have not heard of any internal issues, because we have MDAs where we have such,” he said.

Meanwhile, Ibrahim has said that the emergence of Bitcoin transactions is an advanced “Wonder Bank” and for that reason, it has established a joint committee with the CBN to have a holistic study of this phenomenon.

Although he acknowledged that it is going to radically transform the banking and the entire financial system space, he said that very soon there would be regulations, if not legal framework to manage this emerging instrument.

“Some big banks in the United States have developed their own Bitcoins. Now, this has compelled regulators over there to wake up.”