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Published On: Sun, Jun 8th, 2014

ISAN kicks against CBN’s proposed cut on interest rate, non ATM, COT charges

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From Ngozi Onyeakusi, Lagos.

The pronouncement by the new Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele last week to reduce interest rate has been faulted by some shareholders under their umbrella body, Independent Shareholders Association of Nigeria (ISAN).

They argued that reduction in the interest rate coupled with non-charges on transactions via Automatic Teller Machine (ATM) as well as reduction in COTs will automatically close doors of profit maximization for banks which according to them will in turn be suffered by shareholders if banks failed to pay dividend at the event of declaration of loss or poor financial performance.

“I am telling them that from ATM, we are not earning anything, COT is reducing, and it becomes a very big challenge for commercial banks to ensure that something come out of these areas. And the pronouncement of the new CBN governor that he will cut down the interest rate also means that source of the bottom line is also reduced”, said the Coordinator of ISAN Sir Sunny Nwosu in Lagos, weekend.

Nwosu called on the new CBN governor to find a way of correcting all the anomalies committed by immediate past administration of the apex bank, adding that it is the only way he can win the full support and mandate of shareholders.

“We want him to revisit all the injustice that has taken place in this country especially this, you have used your money to buy this telephone and some body forcefully take it away from you and enact a law that you cannot raise a hand or your leg about what is your own.

It is injustice, so we want him to visit the injustice meted to shareholders and owners and managers of banks”, he said.

Nwosu insisted that some of the pronouncement of CBN past administration has no place in the law and therefore must be revisited.

“You know why I said these things must be visited, if you look at the investment laws in this country, there is non-saying that if an institution has liquidity problems, that government should take over the institution. The laws says if you have a liquidity problems, you pay a fine on a daily basis knowing fully well that liquidity itself fluctuates and if you have capital inadequacy, you are given between six months and two years to go and recapitalize. That is the law, if anybody comes and turn down the law, we will not agree”, he said.

He equally urged Emefiele to check activities of the Asset Management Corporation of Nigeria (AMCON) which he complained affects negatively on returns on investment for shareholders.

“AMCON has taken a lot, for instance last week, a bank paid dividend to shareholders and the totality of that dividend was about N4 billion while they paid N16 billion to AMCON”.

Nwosu concluded by saying that Emefiele as a renowned banker with many years of experience and impeccable qualities, things will turn around for the banking industry.

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