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CBN's withdrawal of govt's funds from banks laudable

23 August 2013, 15:33

Jos -  The Central Bank of Nigeria’s withdrawal of 50 per cent of government funds from commercial banks, is good for the economy, says Leonard Dilkon, former Chairman, House Committee on Finance.

Dilkon told the News Agency of Nigeria (NAN) in Jos on Friday that the step was "very good" as commercial banks would now begin to invest in wealth and job yielding ventures that would stimulate growth.

NAN reports that commercial banks had kicked against the policy, insisting that such measure would "spell doom for the economy".

The banks, in separate reactions, had argued that the step would raise interest rates and make lending very difficult.

But Dilkon, who is the Executive Chairman, Hamtul Press Ltd, a Jos-based large scale printing outfit, argued that the banks had not helped the economy much as they "merely collect monies from local, state and federal governments’’.

"The banks collect monies from all tiers of government and give them out on loan to the same governments. Such monies are deducted at sources with heavy interests.

"The banks do not support any business initiative; when you are building your business, the banks will not be there to support, but once you have established, they come for deposits.

"Banks hardly support small scale industrialists and may not even care if they ever existed. The commercial banks hardly seek out ways to help the society,’’ he claimed.

He suggested the withdrawal of "up to 100 of government monies from the commercial banks", adding that the commercial banks were "exploiting depositors by collecting Commission On Turnover (COT),’’ even when they had no input on such turn overs.

He stated the banks could do more in addressing the problem of violence in most parts of Nigeia, by stimulating the economy.

"Most rioters are only idle and engage in such vices because of indolence; if you approach a bank to seek for a loan to start up a business so as to positively engage Boko Haram members, for instance, they will tell you it is bad investment.

"But if it is government money that should enter their hands, they tell you it is good business. Banks won’t support growth but will be quick to seek to reap from any economic growth,’’ he further alleged.

The law maker decried the quest for power by Nigerians, and challenged them to replace such attitude with a desire to establish cottage industries to engage the youths.

"Northern leaders in particularly, must compete over cottage industries like their counterparts in the south west are doing. That is the only way to take our youths off the streets and make them assets to the society,’’ he said.

Dilkon also expressed dissatisfaction with imposition of taxes on investors by government without any form of support to such investors, warning that the nation might not move forward if investors were simply left on their own.

He said that Hamtul Press, set up via a partnership with some German investors, currently had close to 100 workers, and was targeting 3,000 jobs in the next two years.



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