CBN To License More Banks Before 2013

THERE are strong indications that the Central Bank of Nigeria (CBN) would license more banks before the end of the year.

Director, Corporate Communications, CBN, Mr Ugochukwu Okoro-afor, who made this disclosure at a seminar organised by Finance Correspondents Association of Nigeria (FICAN), in Ijebu-Ode, Ogun State, at the weekend, said the interest of several investors, particularly foreign-based, to set up banks in the country was an indication of renewed confidence in the Nigerian economy.

He said the apex bank was currently encouraging investors to set up regional banks, stressing that the various interventions in the mortgage, discount houses, finance houses, microfinance and others were part of the financial inclusion policy

Only last week, CBN issued merchant banking licence to South Africa’s FirstRand and Nigeria’s First Securities Discount House Limited (FSDH).

The two banks, which would commence operation in the New Year, will focus on long term funding, make some assets in the economy bankable, while guarantying some international loans coming into the country.

The licensing of the two merchant banks is the first by the CBN since the regulatory distinction between merchant and commercial banking was axed 12 years ago.

The CBN spokesman maintained that Nigeria had recovered from the financial crisis and was witnessing huge inflow of foreign direct investments (FDI), adding that from South Africa alone, about N16 billion had entered the Nigerian economy.

He explained that the consistent increase in the nation’s foreign reserve, which now stands at $46 billion, coupled with the fact that Nigeria accounts for about 20 per cent of total investment coming to Africa, was a major consideration for Rand Merchant Bank’s entry into Nigerian banking space.