CBN, NDIC, others disagree with Senate over MFBs Bill

By Taiye Odewale Abuja

Senate’s proposal for amendment of laws on the regulation and supervision of micro fi nance banks , MFBs in the country, was yesterday kicked against by major stakeholder’s in the banking andfi nance sector, by declaring that what the bank needs is remodeling of its operati ons to function eff ectively. Th e stakeholders, which included the Federal Ministry of Finance; Central Bank of Nigeria, CBN; Nigeria Deposit Insurance Corporation, NDIC; National Association of Microfi nance Banks, NAMB and Chartered Institute of Bankers of Nigeria, CIBN, among others, faulted the senate’s move on the bill during a public hearing by its Committee on Banking, Insurance and other Financial Institutions.

Th e committee organized the public hearing on three bills –A bill for an Act to make provisions for the licensing, regulation and supervision of microfi nance business in Nigeria and for related purposes, 2017. Others are A bill for an Act to amend the Insurance Act to set minimum limit of compensation even in death, injury or loss of property of third parties with respect to insurance of public building and building under construction and for related matters; and A bill for an Act to amend motor vehicle third party insurance Act, 2004 to facilitate the accomplishment of the objectives of compulsory third party insurance and for related matter, 2017. But the CBN Governor, Mr. Godwin Emefi ele represented by the Director of Legal Services, Mr. Johnson Akinkunmi argued that the bills were unnecessary “because if the licensing, regulatory and supervision roles which have traditionally been the obligation of CBN is now given to the ministry or NDIC, through s planned amendment, may cause serious confl ict in the nation’s fi nancial system operations”.

Emefi ele maintained that the power to licence banks lies with the CBN, adding no other government agency or ministry was empowered under the law to assume power to supervise banks, determine their licences and appoint itself as liquidator. Th e CBN chief, however, identifi ed inadequate capitalization, corporate governance and funding model as some of the major challenges of microfi nance banks which he noted had aff ected its business and operations over the years, especially in the rural communities. In his submission, the Managing Director/Chief Executive of NDIC, Alhaji Umaru Ibrahim, said that the corporation was ready and would continue to collaborate with the CBN in strengthening the nation’s fi nancial institutions.

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