Mariam Abeeb
The Central Bank of Nigeria (CBN) has announced that it is implementing policies aimed at enhancing investment in the economy, particularly within the banking sector.
The Apex Bank, also disclosed that it is putting in place strong verification processes to ensure that illicit funds do not destabilise the banking sector.
The Bank made this known during the 36th Seminar for Finance Correspondents and Business Editors held in Abuja, Nigeria.
CBN Director of Banking Supervision, Dr. Olubukola Akinwumi, stated that the Bank is encouraging financial institutions to explore flexible sources of capital.
“We have outlined flexible avenues through which banks can quickly raise capital, including initial public offerings, rights issues, private placements, mergers and acquisitions, strategic foreign investments, and, for banks that may find it necessary, the option to scale down—for example, from an international to a national bank. That is also a viable path,” he said.
Dr. Akinwumi emphasized that a bank choosing to adjust its operational status, such as transitioning from an international to a commercial bank, does not indicate a weakening of its capacity.
“Let’s be clear on this. Such a decision does not diminish the strength of the bank. If a bank decides to review its strategy in response to the recapitalization process, say, by moving from being an internationally active bank to a national or commercial bank, it does not mean the bank is any less strong. What is essential is that all banks continue to comply with the regulatory provisions set by the Central Bank of Nigeria.
” Furthermore, banks are required to maintain transparency in their reporting and to provide regular updates to the CBN on the progress of their recapitalization.”
He added that to enhance investor confidence and promote corporate governance in the banking system, the CBN remains committed to combating illicit financial flows.
“As more foreign investors enter Nigeria’s financial system, they will naturally demand stronger corporate governance. In line with our standards, we already have clearly established corporate governance rules in place, and we are committed to enforcing them.
“Additionally, we take issues such as anti-money laundering, combating the financing of terrorism, and the proliferation of weapons very seriously. As part of our efforts to ensure proper bank capitalization, we conduct thorough verification of all incoming funds. We do not admit unverified funds into the banking system, as illicit funds can destabilize the financial sector.”
He maintained that the Nigerian banks are standing on sound footing when it comes to liquidity and they can meet depositors’ requirements as when necessary adding that the recapitalization process currently going on will promote consolidation and innovation.
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