As a prelude to the investiture of the 13th President and Chairman of the Governing Council of the Chartered Institute of Stockbrokers (CIS), Mr. Oluropo Dada, this Friday, the CIS has presented ten recommendations to the Central Bank of Nigeria (CBN) and capital market regulators to ensure the successful implementation of the banks’ recapitalization program.
In a paper titled “Stockbrokers’ Position Paper on the Banking Sector Recapitalization Programme,” released over the weekend, the CIS highlighted that the program would position Nigerian banks to support economic growth, enhance global competitiveness, promote financial inclusion, and generate about N3.9 trillion. The CIS stated:
“To ensure effective capital raising by banks, we strongly recommend the following: There should be comprehensive adoption of technology at every stage of the process. As seen in recent public offerings, using telephone apps to reach investors attracts the younger generation, including millennials, to modern investments. Banks should raise a significant portion of additional capital through public offers to increase the number of investors in the market. It is concerning that, in a country of over 200 million people, only about 7 million have investments in the capital market. Attracting new investors should be a key objective.
“It is crucial that the recapitalization process is timely. The CBN will need to verify the list of subscribers for each new bank issue before sending it to the SEC for share allotment approval. We urge the CBN to speed up this verification process using technology to reduce the time involved.
“Additionally, issuing houses should send the list of subscribers to the CBN in batches, daily or weekly, from the date the issue opens until it closes. This approach will significantly reduce the verification load for the CBN when the offer closes and returns are made.
“The time from an offer’s closing date to the allotment date should not exceed 20 working days. This is essential because investors do not want their funds to remain idle for extended periods.
“Lastly, the CBN should open up the banking industry to more players during this process to deepen competition and reduce market control by a few large banks.”
