Bank Directors Association of Nigeria (LTD/GTE) Applauds the Central Bank of Nigeria's Prudent Guidelines for Strengthening the Financial System
The Bank Directors Association of Nigeria (BDAN) is fully apprised of the recent Guidelines/Circulars issued by the Central Bank of Nigeria (CBN), aimed at fortifying the nation’s financial system. The Association wholeheartedly supports these comprehensive measures which underscore the commitment of the CBN to ensuring the stability and resilience of the Banking sector.
Amid concerns surrounding the escalating foreign currency exposure of Banks through their Net Open Positions, the leadership of the Central Bank of Nigeria (CBN) has issued a circular titled ‘HARMONISATION OF REPORTING REQUIREMENTS ON FOREIGN CURRENCY EXPOSURES OF BANKS.’ In this directive, the CBN stipulates that the Net Open Positions (NOP) limit for overall foreign currency assets and liabilities should not exceed 20% short or 0% long of shareholders’ funds.
This directive, along with other prudential requirements outlined in the circular, plays a critical role in ensuring the effective management of foreign currency exposures. By imposing these limits, the CBN aims to mitigate potential losses that could pose significant systemic challenges.
These regulatory measures underscore a strategic initiative aimed at bolstering risk management, transparency, and accountability within the financial industry. The Bank Directors Association of Nigeria (BDAN) acknowledges and commends the Central Bank for its proactive stance in safeguarding the interests of depositors, investors, and the overall economic well-being of Nigeria.
BDAN views these requirements as a positive step towards creating a resilient financial landscape and preventing adverse effects on the Banking sector. The Association applauds the CBN’s commitment to proactive regulation and remains supportive of initiatives that contribute to the stability and prosperity of the Nigerian economy.
Therefore, the Association encourages all Banks to fully comply with the new directives and actively participate in the implementation process to achieve full compliance.
Furthermore, the Association acknowledges the meticulous work undertaken by the Central Bank of Nigeria in consulting stakeholders and experts to ensure a balanced and effective regulatory approach.
As advocates for responsible Banking and ethical conduct, BDAN believes that these guidelines will contribute significantly to the long-term sustainability, growth, as well as the overall efficiency, transparency, and stability of the Banking sector, ultimately contributing to the nation’s economic development.
BDAN pledges its continuous collaboration with the Central Bank of Nigeria and other stakeholders to foster a dynamic and resilient financial ecosystem that serves the interests of all Nigerians.
We believe that these steps are in the right direction to improve the effectiveness of the Banking system and we are fully in support.
Â
Mustafa Chike-Obi (Mr.)
Chairman, Board of Directors