Page last updated at 17:55 GMT, Friday, 28 August 2009 18:55 UK

Nigeria banking system 'stable'

Lamido Sanusi in Lagos, 14 August
Mr Sanusi, Nigeria's central bank chief, has vowed to clean up the banks

The governor of Nigeria's Central Bank has said that the banking system is sound following the financial scandal that has rocked the country.

Lamido Sanusi told a meeting of financiers in London that decisive measures had stabilised the system.

The bank had to inject a total of 400bn naira ($2.6bn; £1.6bn) into five banks after they were found to have very low cash reserves because of bad loans.

Five bank bosses have been removed as a result of the crisis.

Fifteen other chief executives at the banks - Afribank, Intercontinental Bank, Finbank, Oceanic Bank and Union Bank - are being questioned by police after the loans were not repaid.

Bad loans

"Nigeria's banking system remains safe and sound," Mr Sanusi said.

Mr Sanusi is touring the world to reassure foreign investors about Nigeria's banks.

"It creates a climate of fear in the minds of those who for a long time have broken the rules," he told the BBC.

"And it is important that they understand that there are consequences for their actions."

Mr Sanusi said he was not concerned about making powerful enemies."It doesn't concern me at all," he said.

'Their enemy'

"In fact I would like them to know I am their enemy."

"I would like to see anybody who committed an offence that is punishable by imprisonment go to jail."

He told the financiers that most of the bad loans had come from the five banks already targeted by the central bank.

Shares in the five banks, which account for 40% of the country's bank credit, have been suspended.

They had run up bad loans totalling a collective 1.14 trillion naira.



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