CBN TO CONTRIBUTE N50BN TO AMCON YEARLY

The Central Bank of Nigeria (CBN) yesterday said it has agreed to pay N50 billion to the sinking fund known as Resolution Cost Fund annually to help strengthen the Asset Management Corporation of Nigeria (AMCON) in the discharge of its responsibilities.

This came after the apex bank endorsed the amendments to some sections of the act establishing the corporation at a public hearing organized by the House of Representatives committee on banking and currency.Representative of the CBN governor, Folakemi Falode, who is the Director Risk Management Department, said the apex bank was in support of all the amendments sought to be effected in the act.

She said: “We fully support the amendment to the bill, because we are keen on financial stability in the system. We’ll also make sure that our regulations of AMCON are done within the provisions of the act.”
The amendment which is contained in sections 62 and 64 of the act says: “The Resolution Cost Fund shall be tax neutral and accordingly, all monies accruing to, payments made from, and instruments and transactions relating to, the Resolution Cost Fund shall exempt from all forms of taxes, levies, duties, charges or impositions however described.”

It further says in Section 62 (1): “On or before the first business day in each calendar year, starting from the 2014 calendar year and up to the end of the tenor, the Central Bank of Nigeria shall pay into the Resolution Cost Fund the sum of N50,000,000,000 (fifty billion Naira) or such higher sum as the Board of Central Bank of Nigeria may, from time to time, determine.”
On  the mode of payment of the amount, the amendment provides in sub-section (2) that the CBN will pay, “from the general reserves or other funds of the Central Bank of Nigeria, and cause the sum so appropriated to be paid into the Resolution Cost Fund in immediately available funds.”
Speaker of the House Aminu Waziri Tambuwal had while declaring the hearing open, noted that it is the desire of the lawmakers to ensure that they make laws that would better the lives of Nigerians.
He noted that with AMCON in place, public financial institutions would not fail in their mandate any more, and called on the stakeholders to make meaningful contributions.
Chairman of the committee, Rep Jones Chukwudi Onyereri (PDP, Imo) said the idea behind the amendment was to strengthen AMCON in the discharge of its responsibilities.
Meanwhile, all commercial banks in the country are to contribute an annual levy of 50 percent to the fund.
This is contained in Section 63 sub-section (1), which stipulates that: “There is hereby imposed on each Eligible Financial Institution, an annual levy, in an amount equivalent to fifty (50) basis points of its total assets as at the time of its audited financial statements for the immediate preceding financial year published pursuant to the Banks and other Financial Institutions Act, and which shall be payable on or before the 30th day of April in each calendar year commencing in the 2014 calendar year, and for every calendar year during the tenor.”
Commercial banks in the country as well as other stakeholders in the industry at the public hearing expressed their support to the fund.