- We Won’t Allow AMCON to Acquire New Debts – Reps
The Chairman, House of Representatives Committee on Banking and Currency, Jones Onyereri, has said the House will not be lured into supporting the deceptive plot by some people to lure the Asset Management Corporation of Nigeria in to purchasing new debts from Deposit Money Banks in the country.
Onyereri, who addressed his colleagues in Enugu, Enugu State at the opening of a retreat for lawmakers, which was declared open by Governor Ifeanyi Ugwuanyi, said purchasing fresh non-performing loans of the banks would not be the right decision for the country considering the state of the economy, which is on the path to recovery after sliding into recession.
He said, “We are also aware that some economists are clamouring for AMCON to buy more toxic assets from the eligible financial institutions in view of the very high level of the non-performing loans that are worse than the 2009 experience and far above the regulatory threshold.
“We wish to sound a note of warning that this committee will not, I repeat, will not support any such move. At least, not at a time like this in the history of our economy.”
According to him, the lawmakers are happy that AMCON, as an interventionist institution of the Federal Government, has performed above board since it was created, but are worried that the corporation is often constrained by institutional and legal stumbling blocks from achieving optimum results.
He said that was why the House in 2015 amended certain parts of the AMCON Act, including the establishment of the Resolution Sinking Fund, to further strengthen the institution.
Onyereri said, “These legal and institutional bottlenecks arise from Lack of co-operation from the EFIs; issues relating to clawback on the EFIs and intervened banks; wrong interpretation of the AMCON Act, which has led to conflicting decisions by the courts, especially where it relates to possessory and freezing orders; and disingenuous acts of the obligors, who exploit our court processes and the short comings in the extant statute to frustrate the efforts of the corporation in recovering the loans from obligors.
“I find it troubling that while some of these obligors frustrate AMCON’s recovery efforts by exploiting the court system, they continue to do business with the Federal Government and get paid. These issues contribute a lot in hampering the efforts of the corporation and must be nipped in the bud through proactive legislative instruments. We have to find ways to ensure better cooperation from the EFIs to enable AMCON effectively recover these loans.”