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LequteMan
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The Central Bank of Nigeria (CBN) has opposed the taking over of banking supervision by the Nigeria Deposit Insurance Corporation (NDIC) as recommended in the corporation's amendment act.
Mr Godwin Emefiele, the CBN governor, kicked against the plan at a Senate Committee on Banking, Insurance and other Financial Institutions hearing on Amendment of NDIC Act on Monday in Abuja.
He said that if the bill was passed as recommended, it would make NDIC parallel regulators of banks.
The CBN governor, who was represented by the Deputy Governor Operations, Alhaji Suleiman Barau, said the corporation sought to assume power to license banks.
According to him, the primary role of the corporation by the founding fathers was to insure all deposits liabilities of licensed banks and such other deposit taking financial institutions operating in Nigeria.
"It was to give assistance to insured institutions in the interest of depositors, in case of imminent or actual financial difficulties where suspension of payments is threatened, to avoid damage to public confidence in the banking system among others,’’ Emefiele said.
``Our concern is for the mandate of the corporation to be specific in relation to its functions and the reason for which it was established to be addressed.
`` The mandate of the NDIC in the draft bill includes the effective supervision of insured institutions, to reduce the risk of failure and ensure that unsafe and unsound practices are minimised.
``Others include section seven, article two, that seeks the replacement of director of banking supervision with a deputy governor and Section 32, article five, six and seven on supervision of related entities of insured Institutions.
``Section 32, article five empowers the corporation to directly obtain information from the subsidiaries or affiliates or associated companies of an insured institution.
`` Also, Section 32 (6) and 32 (7) further accentuate the power of the corporation over these institutions, including the holding companies, without regard for the specific sector supervisors of the Financial Services Regulation Coordinating Committee,’’ he said.
He added that the apex bank also objected to section 49 of the draft that empowered the corporation to appoint itself as liquidator upon the revocation of licence by the CBN, among many others.
He called on the committee to look into the proposed amendment carefully, to ensure that there were no clashes of role in the sector.
Alhaji Umaru Ibrahim, Managing Director, NDIC, said that the corporation was ready and would continue to work in collaboration with the CBN.
``This has been the culture; we may disagree at one point but I know that some of the issues you have raised have been resolved.
``We are not in competition with the CBN; we are here in collaboration, to work together for the growth and development of the banking sector.
``All we are asking is additional powers to work effectively and do not compete with the CBN,’’ he said.
Also, Mr Belema Taribo, NDIC Acting Board Secretary, said that the NDIC would want to be involved in licensing of banks, to enable it to discharge its functions as a deposit insurer.
He added that the corporation was not demanding for powers to license banks, adding that the power to supervise banks had been in its act since 1998.
#Nigeria #CBN #NDIC
Mr Godwin Emefiele, the CBN governor, kicked against the plan at a Senate Committee on Banking, Insurance and other Financial Institutions hearing on Amendment of NDIC Act on Monday in Abuja.
He said that if the bill was passed as recommended, it would make NDIC parallel regulators of banks.
The CBN governor, who was represented by the Deputy Governor Operations, Alhaji Suleiman Barau, said the corporation sought to assume power to license banks.
According to him, the primary role of the corporation by the founding fathers was to insure all deposits liabilities of licensed banks and such other deposit taking financial institutions operating in Nigeria.
"It was to give assistance to insured institutions in the interest of depositors, in case of imminent or actual financial difficulties where suspension of payments is threatened, to avoid damage to public confidence in the banking system among others,’’ Emefiele said.
``Our concern is for the mandate of the corporation to be specific in relation to its functions and the reason for which it was established to be addressed.
`` The mandate of the NDIC in the draft bill includes the effective supervision of insured institutions, to reduce the risk of failure and ensure that unsafe and unsound practices are minimised.
``Others include section seven, article two, that seeks the replacement of director of banking supervision with a deputy governor and Section 32, article five, six and seven on supervision of related entities of insured Institutions.
``Section 32, article five empowers the corporation to directly obtain information from the subsidiaries or affiliates or associated companies of an insured institution.
`` Also, Section 32 (6) and 32 (7) further accentuate the power of the corporation over these institutions, including the holding companies, without regard for the specific sector supervisors of the Financial Services Regulation Coordinating Committee,’’ he said.
He added that the apex bank also objected to section 49 of the draft that empowered the corporation to appoint itself as liquidator upon the revocation of licence by the CBN, among many others.
He called on the committee to look into the proposed amendment carefully, to ensure that there were no clashes of role in the sector.
Alhaji Umaru Ibrahim, Managing Director, NDIC, said that the corporation was ready and would continue to work in collaboration with the CBN.
``This has been the culture; we may disagree at one point but I know that some of the issues you have raised have been resolved.
``We are not in competition with the CBN; we are here in collaboration, to work together for the growth and development of the banking sector.
``All we are asking is additional powers to work effectively and do not compete with the CBN,’’ he said.
Also, Mr Belema Taribo, NDIC Acting Board Secretary, said that the NDIC would want to be involved in licensing of banks, to enable it to discharge its functions as a deposit insurer.
He added that the corporation was not demanding for powers to license banks, adding that the power to supervise banks had been in its act since 1998.
#Nigeria #CBN #NDIC
