To probe declining fortunes of capital marketTHE House of Representatives' Committee on Capital Market has faulted the procedures adopted by the Central Bank in its mergers and acquisition of banks. It declared that the procedures were largely flawed and needed to be reviewed.The committee's chairman, Herman Hembe, in an interview at the weekend stated that laws, rules and procedures had been jettisoned but warned that the committee would not fold its arms in the face of such actions.According to him, 'the on-going mergers and acquisition of banks, which operations fall directly within the purview of this committee, the process has largely been flawed, laws, rules and procedure have not been followed. We will step in to ensure the rule of law.'And despite the mounting opposition to the proposed Islamic banking, the interest-free financial system will take off next January, according to the Managing Director and Chief Executive Officer of Albarka Micro Finance Bank, Alhaji Tajudeen Sekoni.Sekoni said the CBN had already given Approval in Principle (AIP) to some non-governmental financial bodies including Jaiz International Bank, to kick-start the operation of Islamic banking.Hembe disclosed that since his appointment, he had received 'quite a number of petitions regarding these mergers particularly with respect to the fact that some very high bids were disregarded in favour of lower bids'.He said that the committee had resolved to intervene in the overall interest of the investors and the nation's economy.On the declining fortunes of the capital market, Hembe said that the committee would in conformity with Section 88 and 89 of the 1999 Constitution as amended, investigate the issue of the decline of the Nigeria capital market with specific reference to the banks' nationalisation and the new wave of recapitalisation.He stated:'The capital market in Nigeria is in a state none of us can be proud of. The all-share index that rose to 57,990.22 points by December 31, 2007 with market capitalization of N13.29 trillion with over 300 listed securities on the exchange has by 2011 witnessed a 56 per cent decline to 20,202,50 points and a market capitalization value of N6.44 trillion'.The lawmaker pledged that the House of Representatives would work assiduously towards strengthening investors confidence and check anomalies as they arise, saying that investors had lost confidence in the nation's capital market and needed encouragement from regulator.Sekoni, who spoke in Ibadan with reporters shortly after delivering a public lecture entitled, 'Islamic financial system: Panacea to global economic crisis,' at a programme organised by the Muslim Congress, Oyo State Chapter, said: 'The three bodies so far granted the CBN Approval In Principle, are already putting finishing touches towards ensuring the smooth take off of their operations, latest by January 2012, as they have so far secured their operational offices in Abuja, the Federal Capital Territory.'Sekoni maintained that contrary to the notion by some Nigerians that government money would be used to fund Islamic banking, 'the CBN has no business in the establishment of the Islamic banking than to only provide enabling environment for those interested in the establishment of such a bank.'He went on: 'Government's role in the establishment of Islamic banking in the country is only to provide enabling environment which they have already done. Government has provided the laws for the Islamic banking as manifested in the Banking and Other Financial Institutions Act (BOFIA) of 1991. And as far as the establishment of Islamic banking in Nigeria is concerned, the Central Bank of Nigeria is not using government money to establish the bank as the Islamic banking is not to be established by the Federal Government.''While justifying the establishment of Islamic banking in Nigeria, Sekoni had earlier in his lecture, argued that it would among others help in boosting the nation's economy through the promotion of small scale entrepreneurship as well as creating mass employment for youths thus leading into the revival of most of the moribund industries in the country.Executive Secretary of the Muslims Ummah of South West (MUSWEN), Prof. Daud Noibi who presided at the event also enjoined Muslims in the country to embark on necessary enlightenment campaign on the ideals of Islamic banking saying it is a challenge that must be tackled not by confrontation but with deep sense of humility and persuasion.
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