THE House of Representatives, on Monday, insisted that the governor of Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, has no power to inject N620 billion into some ailing banks in 2009, as well as the N125 million donations to victims of bomb explosions in Kano and Madalla, Niger State.

But the CBN boss disagreed, saying the apex bank was right and that the CBN acted in line with its statutory role as the lender of last resort, as provided by Section 42(2) of the CBN Act 2007.

This came to fore during an investigative hearing conducted by the House Committee on Banking and Currency, on the alleged expenditure of public funds by the CBN and Asset Management Corporation of Nigeria (AMCON) without the approval of the National Assembly.

The minority leader of the House, Honourable Femi Gbajabiamila, who pointedly told the CBN boss of operating on a “blank cheque” and refusing to follow the principle and letters of the 1999 Constitution, as amended, said “in the United Kingdom and United States where their apex banks intervened in their banks and other sectors of their economy, they did so with the active participation of their parliaments.”

The lawmaker, however, argued that “there must be distinction between autonomy and accountability,” adding that it was desirable for the CBN to be autonomous, but that did not preclude it from being accountable.

The chairman of the committee, Honourable Chukwudi Onyereri, said “the investigative hearing was not to witch-hunt the CBN, but to use the outcome to strengthen the bank and AMCON in the delivery of their mandates.”

The CBN boss, while reacting, said the N620 billion loan was an asset creation in the balance sheet of the CBN.

According to him, “it did not involve using money from any existing funds in the treasury. The loan was duly approved by both the committee of governors and the board of directors of the bank.”

Commenting on the donations to bomb blast victims, the CBN governor said the bank acted within its statutory powers, adding that the money was approved in line with the policy framework and corporate social responsibility activities.

Comments (6)

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written by Kehinde Ola, June 19, 2012

Thanks to Mr Sanusi for another round of classroom teaching for these bunch of failures in the house. Must you bring everything to public glare to verify issues. Instead of organizing an extral-mural-night-class to be tot by CBN governor to know what it takes to be responsible and accountable. If Sanusi sought for house approval, I am sure that more than the approved money could be spend just for lobying.

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No clue on democracy?
written by Eurofighter, June 19, 2012

This Kehinde Ola does not seem to know what democracy is all about. His idol and fanatic militant Sanusi is running amok and the fellow is only considering his religious affiliations.

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What does S.42(2), CBN Act, 2007, says?
written by Ilubarde, June 19, 2012

What does S.42.(2) states:
42.—(1) The Bank shall wherever necessary seek the co-operation of
and co-operate with other banks in Nigeria to -
(a) promote and maintain adequate and reasonable financial service for
the public;
(b) ensure high standards of conduct and management throughout the
banking system; and
© further such policies not inconsistent with this Act as shall in the opinion
of the Bank be in the national interest.
(2) Notwithstanding the provisions of section 29 (1) © and 34 (d) of this
Act, the Bank may grant loans and other accommodation facilities at such rate
of interest and on such terms as the Bank may determine to any bank which
may be having liquidity problems.

Lets have the law and less sentiments, please. In other words, let us have knowledge and not ignorance. Argue with facts.

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written by DEMMY, June 19, 2012

How I wished the hearing is purely in the interest of the nation and not the usual corruption induced probe. Its usually constitutional duty now performed for self enrichment. That is the reason nothing has come out of all the previous probes. We have had on POWER,BPE,NSE,SUBSIDYs has bursted and it is difficult re-assemblying the money,etc.

For Sanusi, he must ensure that the newly bombed Nigerians in ZARIA, KADUNA,YOBE etc also get their own share of the money. PERIOD!

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written by rok, June 19, 2012

If.org does fall to one person to make a decision of lending on that magnitude to one sector of the Nigerian region . Something is wrong and it should be duly reviewed .
There is a thin line between power and megalomania.

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written by rok, June 19, 2012

There is a thin line between power and megalomania . If it is indeed within one mans power to make these decisions , this should be reviewed . Sounds more political than technocratic but , I guess we live in a country that defiers all logic .
The unmentionable "checks" need to be put in place ... Only prob . No one go do that.

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