The news:
- The Central Bank of Nigeria (CBN) has signed Memoranda of Understanding (MoUs) with foreign regulators to enhance oversight and coordination of Nigerian banks that operate subsidiaries abroad.
- This initiative aims to ensure that Nigerian banks follow local and international regulations, promoting greater stability in the banking sector.
- Mrs. Hakama Sidi-Ali, Acting Director of Corporate Communications, announced the initiative on Tuesday, October 8, 2024, emphasising the CBN's commitment to maintaining a safe and compliant banking environment across jurisdictions.
By signing MoUs with regulators in countries where Nigerian banks have established subsidiaries, the CBN is enhancing its supervisory role. This includes implementing regular stress tests, risk-based supervision, and early warning systems to maintain financial system stability.
“The Central Bank of Nigeria (CBN) wishes to reassure the public of its unwavering commitment to ensuring the stability and reliability of the Nigerian financial system,” said Sidi-Ali. She added that depositors should remain confident in the safety of their funds, thanks to these regulatory measures.
Several Nigerian Tier-1 banks have a growing international footprint, with subsidiaries across Africa, the United States, Europe, and Asia.
First Bank of Nigeria operates in multiple African countries, including Ghana and The Gambia, while Zenith Bank, United Bank for Africa (UBA), and Access Bank Plc have extensive operations across the continent.
Access Bank has also expanded into the United Kingdom and recently secured a provisional licence to open a subsidiary in Namibia.
Nigerian banks play an important role in the financial sector of several African nations’ economies. Recently, Liberia’s Vice President, Jeremiah Kpan Koung, said that Nigerians own four major commercial banks in the country.
This increasing international presence underscores the importance of the CBN's collaboration with foreign regulators to maintain a robust and secure banking environment.
The CBN reaffirmed its dedication to protecting public funds and maintaining confidence in Nigerian banks domestically and internationally. “The CBN recognises the crucial role that confidence plays in banking operations and wants to affirm that all deposits in Nigerian banks are secure,” the apex bank added.
Through these MoUs, Nigerian banks are expected to adhere to a sound regulatory framework, supporting financial stability and growth.
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As Nigerian banks continue to play a major role across Africa, the CBN’s initiative ensures that their operations are secure and compliant, helping to boost confidence among investors and depositors alike.
The move is expected to strengthen Nigeria's position as a leading financial hub on the continent.