- Senator Izunaso voices concern over bank recapitalization, highlighting risks of private placement and money laundering, urging strict scrutiny of shareholders
- He commends CBN’s initiative but stresses the importance of thorough screening and pledges committee support for effective implementation
Senator Osita Izunaso, Chairman of the Senate Committee on Capital Market, has expressed apprehension regarding the recent bank recapitalisation, particularly highlighting unique risks associated with banks opting for private placement.
The Central Bank of Nigeria (CBN) recently announced updated guidelines for its recapitalisation policy, mandating that commercial banks with international authorization raise their capital base to N500 billion and national banks to N200 billion.
In a statement, Izunaso emphasized the need for the CBN to diligently ensure that laundered funds are not utilized for bank recapitalisation, stressing the importance of only allowing fit and proper individuals as significant shareholders.
He noted that the risk is mitigated when banks undergo recapitalisation via the stock market, which provides an additional layer of screening in addition to that conducted by the CBN.
Izunaso commended the CBN for the recapitalisation initiative and pledged the support of his committee in ensuring its effective implementation.
Furthermore, he praised the adoption of tiered minimum capital requirements based on international, national, and regional authorization, contrasting it with the uniform capital base of N25 billion implemented during the 2005 banking recapitalisation exercise.