CBN sets N10bn capital base for private asset management companies

share on:

The Central Bank of Nigeria (CBN) has specified a minimum paid-up capital requirement of N10 billion for a licensing private asset management company (PAMC) in Nigeria.

In its exposure draft containing guidelines for establishing PAMC, the bank said part of the requirements for granting of license is that there must be evidence of deposit of such amount into the designated account with CBN or any other amount that may be prescribed by the CBN from time to time.

The guideline obtained from the bank’s website  noted that the amount shall be refunded to the PAMC with the accrued interest upon grant of final licence.

Other requirements according to the apex banking regulatory institution are: detailed business plan or feasibility study, including the objectives of the PAMC, the need for the services of the PAMC, Supported with a detailed market survey.

ALSO READ   South Sudanese diplomat denies joining rebel faction

The prospective PAMC shall also provide, five-year financial projection for its operation indicating expected growth and profitability and the details of the assumptions which form the basis of the financial projection.

The CBN stated that developments in the Nigerian banking industry have necessitated the need for the licensing of PAMCs to play complementary roles in the management of non-performing assets of the industry.

“We forward herewith, an Exposure Draft of the Framework for Licensing, Regulation and Supervision of the business of Private Asset Management Companies for your comments and observations,” the CBN advises stakeholders.

ALSO READ   Pray For Buhari, Nigeria – Orji Kalu Tell Muslims

The dynamic developments in the management of risk assets in the Nigerian banking system necessitated the establishment of the Asset Management Corporation of Nigeria (AMCON) in 2010. The prime objective of AMCON was to manage the toxic assets of the system, which was exacerbated by the global financial crisis.

Given the ever evolving developments in the industry, the decline in international commodity prices with its consequent impact on risk assets in the industry, it has become expedient to proactively widen the space for the management of non-performing loans through the establishment of private asset management companies (PAMCs). This is in line with CBN’s core mandate of promoting a sound and stable financial system in Nigeria the bank stated.

ALSO READ   “I Have Several Girlfriends And They All Know Each Other, I Can Never Love Only One Woman” – Wizkid Reveals

However, a licensed PAMC is prohibited from: Provision of credit to customers; Acceptance of deposits from customers;  Provision of guarantee(s) for loans; Obtaining loans from banks and OFIs in Nigeria;  Issuance of securities to banks and Other Financial Institutions  in Nigeria among others.

There shall be a non-refundable application fee of N500,000 payable to the CBN or any other amount that may be prescribed by the CBN from time to time the bank noted.

The post CBN sets N10bn capital base for private asset management companies appeared first on Tribune.

Leave A Comment Below
Tags:
share on: