Regulatory Alerts2005-03-29 | TED-AD-33-2005STAFF SHARE ACQUISITION LOAN SCHEME
Following the Central Bank of Nigeria's (CBN) policy on bank consolidation, a series of fundraising activities have taken place through Initial Public Offer, Public Offer, Rights Issue, and Private Placement. Consequently, banks have endeavored to involve their staff in these offerings by creating share acquisition loan schemes. However, recent observations from the CBN's capital verification exercise reveal the need for better management of these schemes. Therefore, all participating banks are required to comply with specific guidelines: firstly, they must establish and document a clear staff share acquisition loan policy approved by the CBN; secondly, the total value of shares sold to staff should not exceed 10% of the total shares on offer at any given time; lastly, the individual value of shares sold to each qualified staff member should be capped at either 10% of the total shares on offer or N10 million, whichever is lower. The implementation of these guidelines takes immediate effect under the supervision of the Director of Banking Supervision.