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Reps move to strip CBN of its supervisory powers

By David Abellegah on January 8, 2013

House of Reps

The House of Representatives wants a new body to take over the supervisory roles handled by the Central Bank of Nigeria (CBN).

There are pointers to the fact that the CBN might be stripped of these powers very soon.

According to the Chairman, House of Representatives Committee on Banking and Currency, Mr. Jones Onyereri, the House will focus on removing the CBN as handlers of the supervisory role this year.

Onyereri said the House will consider many alternatives, which he said might even be an independent body that will handle the job or even a new body.

He said, “With the kind of challenges we have, it has come to the time that we should separate that supervisory function away from the CBN. We need to have an independent body; probably the Financial Supervisory Committee, to deal with issues of bank supervision.

“The core function of the CBN is really on monetary policy matter. We need to hear from the Chartered Institute of Bankers of Nigeria, and then take it from there.”

In another development the House is also working on a bill, which focuses on amending the CBN act 2007. They intend to transfer the powers delegated to the CBN for the approval of their budget back to the House.

The bill also seeks to reduce the number of the board from 12 to 7 and wishes to remove the CBN Governor as the chairperson of that board.

He further asked the CBN to stand up for the challenges of contributing to monetary guidelines and ensure the reduction of Monetary Policy Rate.

They said if the MPR is reduced, bank rates will also reduce, thereby helping the growth of the economy.

Onyereri said banks should study the cash-less policy recently introduced by the CBN before taking it to other states.

“We will focus on the cash-less policy, financial inclusion, micro finance banks and also amend the Nigeria Deposit Insurance Corporation Act to make it stronger when we resume plenary in 2013,” he added.

Speaking on banks’ underperformance in granting loans, he said banks should work harder in granting loans to customers and try to improve on empowering Small and Medium-Scale Enterprises.

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