Nigeria’s Financial Reporting Council (FRC) has initiated new moves to review the financial records of banks, particularly deposit money banks (DMBS) in furtherance of its statutory mandate to determine the credibility or otherwise and ensure the financial system stability.
A source at the Council, who spoke on condition of anonymity on the planned exercise to our correspondent on Monday, confirmed that the latest step by the management was to primarily verify the sources of the new recapitalization funds of the banks.
Specifically, our correspondent was informed that the planned review of the lenders’ financial records would enable the FFRC to verify the sources of the new funds being raised through rights offers and private placements in their ongoing drive to meet the capitalization requirements recently set by the Central Bank of Nigeria (CBN).
When asked about the likely commencement date of the exercise, the source said: “As I speak with you now, no date has been set for the kickoff of the exercise but I can tell you that the plan is being put in place and the management will make this public at the appropriate time.”
The CBN had in March last year raised the new minimum capital requirements for banks, setting the minimum capital base for DMBs with international licence at N500 billion, DMBs with national licence at N200 billion, and the new requirement for DMBs with regional operational licence at N50 billion.
Also, the revised minimum capital base for merchant banks was set at N50 billion, while non-interest banks with national and regional operational licenses were reviewed upwards by the CBN to N20 billion and N10 billion respectively.
It would be recalled that the FRC had some years back hinted of its plan to check corporate governance infractions by Nigerian banks and other financial institutions as allegations of sharp practices raged but later suspended the exercise due to what analysts termed “political and other pressures from the owners and top shots of most of the banks.”
