Guardian

THE plan by the federal legislators to strip the Central Bank of Nigeria (CBN) of its autonomy appeared to be on course afterall, as the House of Representatives has concluded plans to cede banks’ supervisory function to the Chartered Institute of Bankers of Nigeria (CIBN).

The hint was given by the Chairman of the House Committee on Banking and Currency, Jones Onyereri, during the special ACIB induction for the pioneering graduates of the Chartered Bank MBA of the institute.

Onyereri said the move would be the main focus of the lawmakers this year, to ensure that it excises the supervisory role from CBN.

Indeed, he said CIBN should start bracing up for the new role, urging the institute to be making contributions to monetary policy issues, ensuring that the Monetary Policy Rate is low, adding that banks’ rising lending rates have been slowing down economic growth and development.

The lawmakers had initiated moves to amend CBN’s Act that would have compromised the apex bank’s autonomy, but the plan was stalled due to stiff opposition from stakeholders.

The amendment, among other things, sought to remove the bank’s governor, deputy governors and executive directors from the bank’s board, provides for a former governor of CBN to chair the board, while also stripping the board the power of consideration and approval of its yearly budget.

But going by the conjecture of the lower house committee’s chairman, the fight for the amendment is far from being over.

Presently, there is a bill before the House, seeking to amend the CBN Act 2007, which would remove the power of the apex bank’s board to approve its budget and cede it to the National Assembly.

The bill also is seeking to reduce the number of the bank’s board members from 12 to seven and the appointment of a person, other than CBN governor, as the chairman of the board.

“The core function of the CBN is really on the monetary policy matter; in Nigeria, CBN also use its core mandate of bank supervision, now we need to hear from CIBN, we are looking at the institute critically.

“With the kind of challenges we have, it has come to the time that we should separate that function away from CBN. Make an independent one, probably the Financial Supervisory Committee, to deal with issues of banks’ supervision. We need to hear from CIBN and then take it from there,” he said.

Speaking on the cashless policy of the apex bank, he noted that policy application should be allowed to trickle down significantly through the reduction of charges by banks, adding that before moving to other states, the pilot scheme in Lagos should get to at least 80 per cent.

Onyereri, who lamented over the underperformance of banks in granting loans to customers, said that the only way to overcome the trend was to empower Small and Medium Enterprises, using CBN’s planned intervention funds for Micro Finance Banks.

He said that other focus of the Committee on resumption of plenary this year, would include cashless policy, financial inclusion, Micro finance banks, and the amendment of the Nigeria Deposit Insurance Corporation Acts.