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CBN’s timeline for banks’ recapitlisation will ensure minimum disruptions in financial system – CPPE

The Center for the Promotion of Private Enterprise (CPPE) has said that the CBN’s strategic timeline for bank recapitalization will minimize disruptions and dislocations in the financial system.

Dr. Muda Yusuf Chief Executive Officer of CPPE stated this in a statement made available to Naijaonpoint said that the proposed recapitalization of banks should be done in a manner that would minimize shocks and disruptions to the banking system and the economy at large.

Yusuf noted that with the current approach and timeline given by the CBN, the risk of bank collapse or hasty mergers and acquisitions should be minimized.

According to him, it is also laudable that the current categorization of banks with differential capital requirements has been maintained – international, national, and regional.

He noted that this is necessary to allow for inclusion and reduce the risk of dominance of the banking space by a few big banks.

Yusuf said it is imperative for the CBN to assure depositors of the safety of their funds in the banking system, irrespective of the current level of capitalizations of banks.

He added that it is important to sustain the confidence of the banking public about the soundness and stability of the Nigerian banking system, especially because of the perception and vulnerable risks of smaller banks.

Yusuf said access to credit by small businesses remains a major inhibition to economic growth and inclusion.

According to him small businesses account for over 50% of GDP but get less than 5% of credit in the banking system. The financing gap in the Nigeria SME space is about $32.2 billion [over N40 trillion], according to IFC estimates.

 

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