The Senate has passed the Asset Management Corporation of Nigeria (AMCON) amendment bill which was enacted in 2010 to empower the corporation acquire distressed banks.
The amended sections of the Act include Sections 2(3), 16(5), 34(1), 34(2), 35, 46(2), 48,60, 61 and 62.
Leading debate on the bill during plenary, its sponsor, the chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Bassey Edet Otu, said the amendment of the AMCON Act became necessary in order to strengthen its operations and to make it to serve the statutory purpose for which it was created.
Otu noted that the amendment will enable and sustain the banking sector’s contribution to the economy, adding that since the establishment of the AMCON, banks have been able to provide substantial funds towards privatisation and enabling environment for greater profitability in the key sectors of the economy such as aviation, oil and gas, and manufacturing, leading to a larger tax base and higher taxes to the federal government.
He noted that the funding model of the AMCON is inadequate and may impede its ability to redeem its debts obligation, adding that it presently relies solely on its current sources of fund which includes the N10 billion equity from the CBN and Federal Ministry of Finance Incorporated (0.22 per cent), N5.6 trillion Zero-Coupon Bond (88.80 per cent) and CBN Debenture of N500 billion (10.98 per cent).
The committee said that these sources are utilised for redemption of bonds, serving of liabilities and financing of the AMCON’s operations.