Segun Adeleye & Tola Akinmutimi, Benin
There are strong indications that company registrars, such as First Registrar, Wema Registrar and UBA Registrar, among others, may cease to exist if the Central Bank of Nigeria (CBN) should succeed with its ongoing banking reforms.
In a presentation yesterday on the Overview of The Four Pillars of the Banking Reforms, the CBN said there was an ongoing discussion between the CBN and the Securities and Exchange Commission (SEC) on how to prune down the number of corporate Registrars in the country to one as part of current sweeping reforms targetted as improving the quality of corporate governance, restoring public confidence and consolidating on the successes of the one-year old transformational initiatives in the banking sector.
Making the presentation at the three-day Seminar for Finance Correspondents and Business Editors organised by the CBN in Benin, Edo State, the Director of Banking Supervision, Chief Samuel Oni, said the initiative would lead to the creation of a central registry for bank stocks where effective monitoring and checks required for good corporate management of the listed stocks would be enforced.
e said the outcome of the parley would determine when the pruning of the administrative custodians of corporate securities’ records would be effected.
Represented by Alhaji Usman Abdulqaudri, an official of the bank, the Director, who spoke on the topic: ‘Overview of The Four Pillars of the Banking Reforms,’ explained that the new move was predicated on the need to further strengthen corporate governance at all levels of the banking sector in such a way that all areas of potential risk to the financial stability in the economy are plugged.
If achieved, he noted, the banks will be able to play their financial intermediation roles, including extension of credit to the real economy.
According to him, the plan to have a single Registrar that would oversee effective monitoring of the securities in a centralized, technology-run database is part of the current reforms of the CBN to put in place an enabling healthy financial sector evolution and determining the its structure.
Oni, while explaining the imperative of having the critical infrastructure that would help it to further drive the reform agenda, pointed out that “the CBN will work with the Securities and Exchange Commission (SEC) towards the creation of a single Registrar for all securities in the country”.
Abdulqaudri, who responded to the Nigerian Compass questions on how soon the proposal would come into force on the sidelines of the forum, disclosed that “what is going on now is that CBN and SEC are discussing on the issue because the SEC which regulates securities have to work together with CBN to ensure the success of the plan. Even when the plan is to have a single Registrar for all securities, the first area that will be considered is the banking sector securities. This is part of the efforts to ensure that all forms of abuses in the sector are controlled”.
Earlier during his presentation, the Director of Banking Supervision had disclosed that to achieve financial stability in the economy, the CBN will champion the development of the Capital Market through the improvement of its depth and accessibility as an alternative to bank funding, fiscal policies to reduce oil-related volatility in the system and the creation of a new macro-prudential framework which would be consistent with the expanded hybrid goals for product and asset price stability.
Also at the forum, a financial sector expert, Dr. Biodun Adedipe, canvassed the need for the apex bank to exit the troubled banks as a strategic option of removing all forms of public misgivings about the intention of the CBN to control the management of the affected banks for hidden agenda.
Adedipe, in his paper titled ‘Reforming the Nigerian Banking Sector: Some Emerging Issues’ commended the CBN reform exercise as desirable for the economy and suggested that the apex bank should however hands off the management of the troubled banks to enhance public confidence in the reform process, adding that CBN exit from the troubled banks must be orderly and transparent.
He explained: “Right from the beginning, the ongoing reforms have been branded as a ‘hidden agenda’ being spearheaded by CBN. This, of course, has not been assuaged by the seeming interference of the CBN in the operations of the banks whose Executive Directors were sacked and into which the apex bank injected some N620 billion.
“Reference has been made to the appointment of advisers for them and several other actions that suggest micro-managing of the troubled banks by the CBN. The impression of a hidden agenda has not changed and will remain until the CBN exits the banks.
“To disabuse the minds of unrelenting critics, CBN exit from the troubled banks must be orderly and transparent. Efforts till date are in the direction of sale to other banks and/or investors that are unrelated to the former core investors”, Adedipe argued.
