The House of Representatives on Wednesday halted the amendment to the provisions of the Asset Management Corporation of Nigeria, AMCON, Act, which proposed a yearly payment of N50 billion by the Central Bank of Nigeria, CBN, into the Resolution Cost Fund.
The proposed bill provides that the N50 billion should be paid into a contributory fund, otherwise known as a ‘sinking fund’ from time to time as determined by the board of the CBN.
The sinking fund was created by AMCON to bail out distressed banks and financial institutions.
The proposed sinking fund amendment would see the CBN contributing N50 billion, while the banks through the Bankers’ Committee would contribute an amount equivalent to 0.3 per cent of its total assets base.
But, the House Committee on Banking and Currency said the amendment of the AMCON Act 2010 was considered and passed at plenary.
The lawmakers approved amendments to Sections 2, 16(5), 22(2), 34(1)-(2), 35, 46(2), 48, 57, 60 and 62 of the Act.
Opposing the amendment of Section 61(2), Sekonte Davies (PDP-Rivers) and Asita (PDP-Rivers), said that making the CBN to pay N50 billion yearly into the fund would encourage corruption in the banking sector.
According to Mr. Davies, there was no provision in the amended law showing how the money would be recovered where there was a default in repaying the loan.
“Are we saying that the Federal Government has become Father Christmas,” MrDavies said. “We are creating room for massive corruption.”
The Chairman of the Committee on Banking and Currency, Jones Onyereri (PDP-Imo), however, stepped down the proposed amendment.