The Central Bank of Nigeria (CBN) and some Stakeholders in Abuja on Monday, rejected a bill to amend the CBN Act to exclude the Governor, Deputies and Executive Directors from the board of the apex bank.
The bill seeks to remove the CBN Governor as Chairman of the Board of the bank, and also excludes Deputy governors and Executive Directors from the membership.
The proposed amendment seeks to provide for a former governor of the CBN to be the chairman of the board.
It also seeks to divest the board of the power of consideration and approval of the annual budget of the bank.
The rejection was at a public hearing organised by the House of Representatives Joint Committee on Banking and Currency and Justice on a bill to amend the CBN Act, 2007.
Mallam Sanusi Lamido Sanusi, Governor of the CBN, represented by Mr. Tunde Lemo, Deputy governor in charge of banking Operations at the CBN said that financial autonomy for the bank is key to its operations.
“An efficient CBN is one that is truly independent, “he said.
Sanusi said that rather than amend the Act, the National Assembly should use the present one to enhance the oversight activity through a quarterly briefing by the governor.
Sanusi noted that the reputation of the apex bank would be at stake, as a lender of last resort and confidence of Nigerian banks would be eroded before the international community.
According to him, taking away the financial autonomy of the bank would limit its ability to fulfill its lender- of – last resort function of providing loans to distressed banks.
He said that this would in effect constrained the ability of the bank to achieve its mandate of ensuring financial system stability.
“By removing this function from the bank, the proposed amendment will increase the investors’ perception of risk in the banking industry,” he said.
He noted that a strong and independent CBN was required to achieve the goals of the federal government’s vision 20:2020.
Mallam Adamu Ciroma, a former CBN governor who opposed the amendment, cautioned the House of Representatives against the amendment.
According to him, the process would be counter productive as people proposed to be on the board may not be knowledgeable in the operations of the bank.
“If the board of CBN excludes the governor of the bank, it means it will comprise of people without the knowledge of the operations of the bank.
“There is great danger in excluding the governor from the chairmanship and staff who have knowledge of the system from the board, “he said.
He urged the committee to give the proposed amendment a serious thought, as autonomy of the bank allowed it to operate maximally.
Mr. Joseph Sanusi, also a former governor of the CBN said that the governor of the bank should be allowed to continue to be the chairman of the apex bank.
He called for a workshop to educate Nigerians and members of the National Assembly on the operations of the bank.
Representative Chukwudi Onyereri (PDP- Imo), the chairman of the committee said the
Committee would be looking at a more dedicated and deliberate regulatory structure for commercial banks. According to him, the committee would be considering varied models.
“I wish to reiterate our neutrality and emphasise our commitment to discharging our constitutional responsibilities of law making oversight and representation without fear or favour,” he said.
Other stakeholders at the hearing included the NLC, Zenith Bank Plc, Eko Bank Plc, Nigeria Deposit Insurance Corporation (NDIC), and the Chartered Institute of Bankers of Nigeria (CIBN) among others.
Source: The will (written by Saint Mugaga)
