CBN Moves to Save Ailing Banks

Governor of Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi, Governor of Central Bank of Nigeria, CBN has said that the apex bank would have no option than to print more naira to save more ailing banks in the country.
The CBN governor reiterated that the on-going debt recovery efforts in these banks were to ensure that depositors and the banking industry were strengthened and not endangered.
While addressing newsmen at the end of the 210th Monetary Policy Committee, MPC, meeting of the bank, Sanusi stressed that CBN does not require any appropriation by the National Assembly for it to lend money to the banks as part of its statutory responsibilities as the lender of last resort.
On the injection of N420billion to save the banks, Sanusi noted that what the apex bank did was not a bailout, but liquidity support and financial intervention to bring them back to a position where they would then be able to provide their contractual obligations to their customers, adding that much of the money borrowed out by the banks will not come back.
"We are going to create money, we will increase money supply to provide financial intervention to bail out any of the banks in the recently concluded auditing for the next batch of eleven banks," he said.
He said the apex bank had concluded the auditing of 11 other banks, adding that if any of the audited banks was found defective, the CBN will print naira to bail them out.
Sanusi who noted that CBN will be consistent in all its actions, stressed that the financial intervention which attracts 11 per cent interest was given out to ensure that depositors are not at risk, adding that actions so far taken on the five banks, were done in good faith, just as he said that if at the end of the day it is found out that he took a wrong decision, he would not hesitate to throw in the towel.