Abuja - The Central Bank of Nigeria (CBN) has opposed the taking over of banking supervision by the Nigeria Deposit Insurance Corporation (NDIC) as recommended in the corporation's amendment act.
Godwin Emefiele, the CBN governor, kicked against the plan at a Senate Committee on Banking, Insurance and other Financial Institutions hearing on Amendment of NDIC Act on Monday in Abuja.
He said that if the bill was passed as recommended, it would make NDIC parallel regulators of banks.
"Following the decision of the Nigeria Deposit Insurance Corporation (NDIC) to amend its 2006 Act, the CBN held various meetings to review the proposals to ensure consistency with the goals of financial system stability.
"The CBN drew the attention of the NDIC to several objectionable clauses in the proposed Act, which at the least sought to confer coordinate functions and powers on the NDIC.
"Specifically, the attention of the corporation was drawn to the implications of the enactment of the act as proposed as it will make the NDIC a parallel/coordinate regulator for banks as CBN.
"It will confer conflicting supervisory functions and powers on NDIC over banks and create overlapping regulatory responsibilities for the NDIC,’’ Emefiele said.
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The CBN governor, who was represented by the Deputy Governor Operations, Alhaji Suleiman Barau, said the corporation sought to assume power to license banks.
He said the corporation also sought to assume power to supervise banks without reference to the CBN, determine the licences of banks and to appoint itself as liquidator.
According to him, the primary role of the corporation by the founding fathers was to insure all deposits liabilities of licensed banks and such other deposit taking financial institutions operating in Nigeria.
"It was to give assistance to insured institutions in the interest of depositors, in case of imminent or actual financial difficulties where suspension of payments is threatened, to avoid damage to public confidence in the banking system among others,’’ Emefiele said.
He said that the apex bank specifically objected to some areas of the recommendations in the amendment of the act.
He said the areas include section three mandate of the NDIC that sought to appropriate the supervision of financial institutions in Nigeria along with its primary responsibility of providing deposit insurance.