The Senate through its Committee on Banking, Insurance and other Financial Institutions, has promised to review the Companies and Allied Matters Act, CAMA, in order to grant additional capacity to shareholders to oversee the operations of their business investments.
Chairman of the committee, Senator Mukhail Adetokunbo Abiru, (APC, Lagos East) stated this during an interactive session with the board members of the Bank Directors Association of Nigeria, LTD/GTE, led by its chairman, Mr Mustafa Chike-Obi in Abuja.
Abiru informed the bank directors that the Senate is currently amending the Nigerian Deposit Insurance Corporation Act, NDIC and the Central Bank of Nigeria, CBN Act, promising that the committee would also examine the current CAMA Act, with a view to bringing it in line with current realities.
“The administration informed us that they want a $1 trillion economy within eight years , which we have endorsed. Part of that is that we have to raise more capital, because the capital we have in banks today cannot support a 1 trillion dollar economy.
“All of us are going to raise capital to meet the objective within a year or two to meet the President’s objective. However, we want more synergy between measures to fight inflation and GDP growth,” he stressed.
The senator assured that the problems would be addressed at completion of the amendments, saying that the Senate would also ensure synergy between the fiscal and monetary authorities.
Earlier, Chike-Obi, while speaking on the challenges bedeviling the banking industry, argued that there was an urgent need to amend the CAMA Act in tandem with current realities.
According to him, the CAMA Act states that one third of all the directors of companies (banks in this case) must be independent directors but unfortunately for banks, half of their directors are usually predominantly executive directors.
He stressed that if one-third are selected, it will imply that one third of the half are independent.
Seeking for a review of the law, the BDAN chairman said; “What we thought was that one third of the non-executives should be independent, not one third of all the board members should be independent. So shareholders are complaining that we only have 3 seats on the board. Five are independent and the eight are executives.”
