In order to avoid duplication of function and in line with international best practice the Central bank of Nigeria want the Nigeria senate to give the apex bank the exclusive right to bank licensing and revocation.
Mr.Godwin Emefiele, the CBN governor, made the submission on Wednesday at the Senate Committee on Banking, Insurance and other Financial Institutions public hearing on the Banks and other Financial Institutions Act (BOFIA), Cap B3 LFN 2004 (Repeal and Re-enactment) Bill, 2020 and the Electronic Transaction Bill 2020. Farmers, small businesses get CBN’s interest free loans CBN seeks exclusive right to bank licensing, revocation Represented by Mr. Kofo Salam-Alada, the apex bank’s Director, Legal Services, the governor noted that the proposed act would serve its purpose better if it recognised the critical roles the CBN played in regulating the banking and other financial services players. He noted that, “The global best practice is to have the banking legislation empower the financial services industry regulator to regulate banks, promote their soundness and stability; superintend issuance and revocation of operating licence without recourse to any other institution; while the Deposit insurer is in charge of bank resolution activities after the revocation of operating licence.” The CBN governor also submitted that the new amendments should consider, “The Enhancement of failing bank recovery and resolution tool kit to give more options for managing failing institutions and systemic crisis without recourse to public treasury; the creation of a credit tribunal to strengthen credit recovery processes and enforcement of collateral rights; strengthening the framework for reporting for insider transactions as part of measures to boost credit administration processes in banks; enhancements to regulatory measures for single obligor limits, transfer of significant holdings, etc. and strengthening of the sanctions regime to make it more deterrent.” Others, he said included: “The review of provisions to recognise the unique business models of new entrants into the financial services sector (e.g. non-interest banks and payment system service providers); effective management of dormant accounts to ensure efficient administration for ultimate benefit of the owners of the funds and/or their beneficiaries; enhanced requirements for payments, settlement and clearing activities to address unfolding developments and standards for regulations and supervision of systemically important banks given the risk that their activities pose to the financial system.”
