TheCable

A bill seeking to strengthen the Asset Management Corporation of Nigeria (AMCON) in the recovery of loans has passed second reading at the senate.

The bill, which is an act to amend the Asset Management Corporation of Nigeria Act No.3, 2014 to extend the tenor of the resolution cost fund and for related matters 2021, passed the second reading after Opeyemi Bamidele, senator representing Ekiti central, led a debate on it.

A total of 350 obligors are reportedly holding on to debts worth N3.6 trillion out of AMCON’s total N4.4 trillion exposure.

While leading the debate on Tuesday, Bamidele said AMCON is an important institution that must be strengthened to stabilise the banking sector and the economy at large.

“AMCON is a very important and strategic national institution that must be strengthened to effectively contribute to the stabilisation of the banking sector in Nigeria,” he said.

“It proved its mettle in the banking crises of 2009. Our economy still grapples with huge challenges. The banking sector is not immune from the difficulties we face. We must therefore review and amend the AMCON Act (2014) in order to reinvent and reposition AMCON to optimally perform its functions.

“In particular, this amendment will strengthen the hands of AMCON in assets recovery. AMCON must be reenergised to tackle the problem of toxic loans.

“Highly placed debtors have been employing different strategies and tactics to stall the repayment of loans.

“Under the current Act, the continued smooth operation of AMCON is threatened by the tenor put on a key funding provision for AMCON.”

The bill was passed for second reading after Senate President Ahmad Lawan put it to a voice vote.

Lawan referred the bill to the banking committee and asked it to report back in four weeks.