SAN FRANCISCO, September 23, (THEWILL) – The Federal Government is to establish a sinking fund for the Assets Management Corporation of Nigeria (AMCON) to enable the corporation meets its obligations arising from debt securities. The proposed fund is also to be known as the Resolution Cost Fund.
According to the proposal for the floating of the fund, the Central Bank of Nigeria (CBN) is expected to contribute N50 billion for the take-off of the fund while other banks in the country would contribute N50 billion based on their total assets annually.
Chairman of the House of Representatives Committee on Banking and Currency, Hon. Jones Onyereri, who disclosed this on Monday at the public hearing on a Bill to amend the AMCON Act, 2010, organised by the Committee, said the amendment was aimed at strengthening AMCON as an institution to be able to efficiently carry out its function.
He said the Resolution Cost Fund will “insulate the tax payer from obligations occasioned by financial mismanagement by the banks.” He added that “The bill provides for a Board of Trustees to oversee its supervision, administration and management of the Fund.”
Onyereri also disclosed that about N600 billion recovered from bad debts by AMCON had been used in restructuring a lot of non-performing loans.
Meanwhile, the Securities and Exchange Commission (SEC) has kicked against section 60(c) of the proposed amendment to the bill, which seeks to exempt AMCON from complying with the provisions of the Investment and Securities Act (ISA) 2007.
SEC represented by the Executive Commissioner, Legal and Enforcement, Hajia Saadatu Mohammed Bello, submitted that AMCON should comply with the ISA 2007 with respect to capital market matters, saying non-compliance would mean the corporation’s power supercedes that of the nation’s constitution.
Earlier in his remarks, Speaker of the House of Representatives, Hon. Aminu Waziri Tambuwal, who declared the event opened, said AMCON was created out of the need to cushion the public against future shocks in the country’s banking system.
Represented by the Deputy Minority Whip, Hon. Garba Datti (APC, Kaduna), Tambuwal said as elected representatives of the people, it was their duty to protect the interest of the people who bear the pains of the failure of the financial institutions.
By Saint Mugaga, Abuja
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