On Tuesday, October 8, the Central Bank of Nigeria (CBN) announced that it has signed Memoranda of Understanding (MoUs) with regulators from other countries.
This new initiative aims to improve how Nigerian banks that have branches in other countries are supervised and ensure they follow local and international rules.
Mrs. Hakama Sidi-Ali, Acting Director of Corporate Communications at the CBN, highlighted the importance of this initiative in creating a safe and reliable banking environment.
“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,” she said. She encouraged depositors to feel confident that their money is safe due to these new regulations.
By signing these agreements, the CBN will have a stronger role in overseeing Nigerian banks overseas. This includes regular tests to check the banks’ health, risk assessments, and systems to spot potential problems early.
Nigerian banks, such as First Bank of Nigeria, Zenith Bank, United Bank for Africa (UBA), and Access Bank Plc, are expanding their operations beyond Nigeria. For instance, First Bank has branches in countries like Ghana and The Gambia, while Access Bank has recently opened in the United Kingdom and is set to open a new branch in Namibia.
These banks are essential for the economies of several African nations. For example, Liberia’s Vice President, Jeremiah Kpan Koung, noted that four major commercial banks in Liberia are owned by Nigerians.
This growing international presence shows just how important it is for the CBN to work closely with foreign regulators to ensure a safe banking environment. The CBN emphasized its commitment to safeguarding public funds and maintaining trust in Nigerian banks. “The CBN recognizes the crucial role that confidence plays in banking operations and wants to affirm that all deposits in Nigerian banks are secure,” the bank added.
Through these MoUs, Nigerian banks are expected to follow a solid set of rules, which will help keep the financial system stable and support growth. With Nigerian banks taking on a larger role in Africa, the CBN’s actions will help ensure their operations are secure and compliant, boosting confidence among investors and customers. This move is also expected to strengthen Nigeria’s position as a leading financial center in Africa.
