The Central Bank of Nigeria (CBN) has taken a significant step towards bolstering the oversight and coordination of Nigerian banks with international subsidiaries by signing Memoranda of Understanding (MoUs) with foreign regulatory bodies. This strategic move is aimed at ensuring compliance with both local and global banking regulations, thereby fostering a more stable banking sector.
Mrs. Hakama Sidi-Ali, the Acting Director of Corporate Communications at the CBN, unveiled this initiative on Tuesday, October 8, 2024. She highlighted the CBN’s dedication to upholding a secure and regulation-compliant banking landscape across different jurisdictions. Through these agreements with international regulators, the CBN seeks to strengthen its supervisory capabilities. This includes conducting regular stress tests, applying risk-based supervision, and deploying early warning systems to safeguard the financial system’s stability.
Mrs. Sidi-Ali reassured the public of the CBN’s steadfast commitment to the stability and dependability of Nigeria’s financial system. She further encouraged depositors to have confidence in the safety of their funds, thanks to these enhanced regulatory measures.
Nigerian banks, particularly Tier-1 banks, have been expanding their presence globally, establishing subsidiaries not only in Africa but also in the United States, Europe, and Asia. For instance, First Bank of Nigeria has operations in several African countries, including Ghana and The Gambia. Similarly, Zenith Bank, United Bank for Africa (UBA), and Access Bank Plc have widespread operations across the continent. Access Bank has even ventured into the United Kingdom and is on the verge of establishing a subsidiary in Namibia after receiving a provisional license.
The growing international footprint of Nigerian banks underscores the critical nature of the CBN’s cooperation with foreign regulators in ensuring a secure and robust banking environment. This is particularly relevant as Nigerian banks play pivotal roles in the financial sectors of various African countries. Liberia’s Vice President, Jeremiah Kpan Koung, recently noted that Nigerians own four major commercial banks in Liberia, illustrating the significant influence of Nigerian banking institutions abroad.
The CBN reaffirmed its commitment to safeguarding public funds and bolstering confidence in the Nigerian banking sector, both domestically and on the international stage. The bank stressed the importance of depositor confidence in banking operations and assured that all deposits in Nigerian banks are secure. By entering into these MoUs, Nigerian banks are expected to adhere to stringent regulatory standards, which will support financial stability and growth.
As Nigerian banks continue to assert their dominance across Africa, the CBN’s initiative is poised to ensure that their operations remain secure and compliant, thereby enhancing investor and depositor confidence. This development is poised to reinforce Nigeria’s status as a leading financial center in Africa, highlighting the country’s commitment to maintaining high standards of banking regulation and oversight on a global scale.
