Bankers’ Committee outlines plans to boost bond market
The bankers' committee on Tuesday stated that it would introduce measures that would remove the impediments to the development of the bond market.
It also expressed support for plans to establish a Mortgage Refinancing Company (MRC) in conjunction with the Federal Ministry of Finance
At its 313th meeting held in Abuja , the committeesaid that it was seeking ways of encouraging participation in the bond market so as to provide the country the opportunity to tap into available pool of funds for developmental purposes.
Addressing journalists at the end of the meeting, Group Managing Director, Stanbic IBTC Bank, Mr. Yinka Sanni, alongside other bank chief executives identified the problems of liquidity and lack of incentives for long-term investments as major bottlenecks to the development of the market.
He said the committee was in support of the establishment of an over the counter (OTC) self- regulatory organisation known as the FMDQ which is expected to solve some of the challenges in the bonds market. The body, which is being promoted by the Financial Market Dealer Association (FMDA) is expected to commence operation in August.
He also said there had been strong indications and expressions of interest from financial institutions including bank to raise the startup capital for the MRC.
“The committee will see it to the end so that Nigerians can have access to affordable housing,” he said.
The Group Managing Director/ Chief Executive, Access Bank Plc, Mr. Aigboje Aig-Imoukhuede said: “As markets become sophisticated, OTC activities have to be better organised otherwise, you can have rather unfortunate developments such as disruptions and so on.”
“We do not have a proper underlying institution regulating the activities of player in OTC market. And the good news today is that having obtained it registration from the Securities and Exchange Commission (SEC), a lot of work had been done and this body is about to commence business.
He said market rules were in the final stage of drafting while market infrastructure were being aggregated stressing that the body had finalised the selection of a chief executive officer and would be launching in August.
“This is an extremely critical development in the growth of the Nigerian financial market,” he said.
Also, CBN Acting Director, Banking Supervision, Mr. Benjamin Fakunle, restated plans to extend the cashless Lagos initiative to five states, which includes Ogun, Kano, Abia, Anambra and Rivers states as well as the Federal Capital Territory (FCT).
Meanwhile, CBN Director of Communications, Mr. Ugochukwu Okoroafor, said the committee’s attention had been drawn to the continued activities of wonder banks which he said were not being regulated by the apex bank.
He warned the public to ignore any institution offering bogus returns on investment and report such to the police. He added that those who continue to patronise them do that at their risk.