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The Chartered Institute of Stockbrokers (CIS) has emphasized the need for comprehensive adoption of technology at all stages of bank recapitalization.
In a detailed position paper titled “Stockbrokers’ Position Paper on the Banking Sector Recapitalization Programme of the CBN,” the CIS laid out its recommendations to the Central Bank of Nigeria (CBN) and capital market regulators. This document was released ahead of the investiture of Oluropo Dada as the 13th President and Chairman of the Governing Council of CIS.
The institute highlighted that utilizing mobile apps to reach investors has significantly attracted the younger generation to modern investment avenues, as evidenced by recent public offerings. According to CIS, integrating technology into the recapitalization process will not only strengthen banks but also boost economic growth, enhance global competitiveness, and promote financial inclusion.
“Raising a substantial portion of additional capital through public offers is crucial for increasing the number of investors in the market,” CIS stated. “In a country with over 200 million people, it is concerning that only about 7 million have investments in the capital market. Expanding the investor base should be a key objective of this exercise.”
CIS stressed the importance of a timely recapitalization process. They acknowledged that while the CBN needs to verify the list of subscribers for each new bank issue before sending it to the Securities and Exchange Commission (SEC) for share allotment approval, this process must be expedited.
The institute proposed that the CBN employ technology to speed up this verification process. Issuing houses could send subscriber lists to the CBN in batches daily or weekly from the opening date until the issue closes. This approach would substantially reduce the verification workload for the CBN when the offer closes and returns are made.
“From the offer’s closing date to the allotment date, the total processing time between the CBN and the SEC should not exceed 20 working days,” CIS recommended. “This assurance is critical, as investors do not want their funds to remain idle for an extended period.”
The CIS’s recommendations underscore the potential of technology to streamline bank recapitalization, ensuring efficiency and boosting investor confidence.
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