Nigeria: Senate Directs CBN to Recover N620 Billion Bailout Fund
Cosmas Ekpunobi
20 March 2010

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Lagos — Trouble is not yet over for some commercial banks still battling with over N1.3trillion toxic debts as the Senate President, David Mark, Thursday, directed the Central Bank of Nigeria (CBN) to commence immediate recovery of over N620billion lifeline bailout to the banks.

Mark and indeed the senate insisted that the bailout cannot be a free money to the banks.

Mark also Thursday indicted the former CBN boss Prof. Chukwuma Soludo and his team over the rot in the banking industry, saying that the huge toxic debt by the banks would have been avoided if the former CBN administration had stepped up its supervisory role on the banks.

The senate president who spoke at the opening of a one day public hearing on the Asset Management Corporation bill said that Prof. Soludo and his former team deceived the senate and other Nigerians to believe that all was well with the banks.

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Said he: "We have found ourselves where we are today as a result of one thing; the Central Bank's inability to supervise the banks properly. I recall that in Soludo's time, we called the governor of CBN not less than three times to come and brief us when the economic meltdown started, and on each occasion, we were assured and re-assured that the situation in Nigeria was excellent and that there was no problem at all. Now we know better.

"And I believe very sincerely that if the supervision was alright, we would not have found ourselves running debts up to trillions of naira. I think that point is very important and we must note it.

"What is even more disturbing is that while the banks were running these toxic debts, they were also declaring profits. But those banks had these debts and then fat profits and all of us were clapping for them because we didn't know the inside story but they are people who are being paid on daily basis to know the inside story of the banks; they didn't do their work".



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