Business plans - As part of efforts to ensure the return of Savannah Bank of Nigeria (SBN) and Societe Generale Bank of Nigeria (SGBN) into business, the Central Bank of Nigeria (CBN), said it was currently reviewing the business plans of both institutions. Deputy Governor, Financial System Stability, CBN, Dr. Chiedu Moghalu, made this disclosure in an exclusive interview with THISDAY in Abuja at the weekend. Moghalu also revealed that the apex bank had been meeting with representatives of both institutions. He however insisted that both institutions must meet all the standards of the current banking system. He specifically disclosed that the apex bank had been in active discussion with Savannah Bank.

Moghalu explained: "For Savannah Bank and SGBN, you know that there were court ruling on their licences, which had been earlier revoked, ordering the CBN to restore their license. That is a process, which is on-going right now, because it involves some work by those banks for them to come back to business. They need to meet the standard of the modern banking environment and the regulatory environment which everyone is operating now.

"So we are having discussions with representatives of Savannah Bank and SGBN. We will review their plans and provide the necessary support based on their meeting of some minimum conditions. Especially Savannah Bank, because we are talking actively with them. We have had preliminary discussions regarding SGBN. But all these discussions and the parties that expect to be players in the new banking system must have to meet with regulatory approvals based on our standards.

In the case of Savannah Bank, a Federal Court of Appeal, Abuja on February 20, 2009, had declared that the CBN and Nigeria Deposit Insurance Corporation (NDIC) wrongly revoked the bank's licence and that it should be allowed to return to business.

On the other hand, SGBN licence was withdrawn following its inability to meet the N25 billion minimum capital requirements. But in April 2008, a Federal High Court, Abuja, had granted its request to restore its licence.

The last time both banks opened their doors to doors for business, they were 89 banks operating in the country, which has since dropped to 24, following a CBN recapitalisation exercise in 2005. With the recent recapitalisation of the rescued banks, the number is expected to reduce further to 20.

Commenting further, Moghalu said: "If those standards are not met, we (CBN) would not allow them to come back into the business."

He also assured Nigerians that the banking sector watchdog would continue to be involved in the development of the macro-economy as well as in the regulation of the financial system.

"You can expect from the CBN, strong action to fulfil its primary mandate of price stability and financial stability as well. So we are alive to our mandate and we would continue to do all that is necessary to ensure that we make our contributions from the side of monetary policy, because you have to understand that the economy has two parts - monetary and fiscal policies. The CBN is in charge of monetary policy while the government, which is the ministry of finance, is in charge of fiscal policy. Both sides are working together to ensure that we do all that is necessary to develop the economy," he added.

Obinna Chima

This Day/10/10/2011