The Chartered Institute of Stockbrokers has urged the Central Bank of Nigeria to use innovative technologies throughout the bank recapitalisation process to ensure efficiency and effectiveness.
This was disclosed in a statement by the CIS President, Oluropo Dada on Sunda, according to The Punch.
Dada noted that this measure is critical for engaging younger generations and increasing the investor base in a country of over 200 million people and seven million capital market participants.
Dada said that CIS strongly advocated that banks obtain a considerable amount of additional capital through public offerings to increase market participation.
The institute proposed that the entire process, from offer closing to share allotment, should not take more than 20 working days to ensure that investor funds are not idle for a long period.
He said “To ensure effective capital raising exercise by banks, the institute strongly recommends as follows: There should be a wholesome adoption of technology in every stage of the process. As we have seen in recent public offerings, the path of reaching out to investors through telephone apps is what endears the young generation, including the millennials to modern-day investments.
“Banks should consider raising a significant portion of the additional capital through public offers, to increase the number of investors in the market. It is sad that, in a country of over 200 million people we still have just about seven million people with investments in the capital market. So, attracting more new investors should be a key objective of the exercise.”
In his comment on greater competition in the banking sector, Dada states that by diversifying the market, the risks associated with concentration can be minimized, resulting in a more competitive and resilient financial environment.
In addition to those recommendations, he emphasized the need to adhere to sound corporate governance and protect minority shareholders during the recapitalisation process.
He urged capital market operators to provide professional advice to investors to improve research capabilities and industry skills.
Recall AmBusiness, reported that the Securities and Exchange Commission has released a framework to enable the Central Bank of Nigeria’s bank recapitalisation initiative.
