Breaking News

CBN to set advisory panel for banks

By Babajide Komolafe
LAGOS—The Central Bank of Nigeria, CBN, said it will set up international advisory panel for some banks in the country to forestall breakdown in corporate governance and risk management practices.

CBN Governor, Mallam Lamido Sanusi, stated this in Lagos yesterday, saying this is part of new banking rules to be introduced to prevent a repeat of last year’s crisis in the banking industry.

The changes will “forestall the pitfalls of the past where corporate governance malpractices brought a number of banks to their knees,” he said at the annual general meeting of the Banks’ Directors Association of Nigeria, BDAN.

It would be recalled that the apex bank intervened in eight banks last year following speciall examination of the 24 banks, which revealed high level of non-performing lonas attributable to poor corporate governance, lax credit administration processes and the absence or non-adherence to credit risk management processes.

Sanusi said while a team of specialists will be engaged to continuously oversee and review governance practices in the industry, banks whose assets exceed certain predetermined threshold may be required “to form an international advisory panel as a way of enhancing transparency and good governance.”

Meanwhile the Naira yesterday gained 69 kobo in the interbank foreign exchange market in response to low demand and foreign exchange sales by oil firms.

Consequently the interbank exchange rate dropped at N150.1525 per dollar from N150.85 per dollar last week, indicating 69 kobo appreciation for the Naira at the interbank segment.

The appreciation by $5 million foreign exchange sale by MRS oil, formerly Chevron Nigeria. In addition to this Shell and Nigerial National Petroleum Corporation (NNPC) have indicated intention to sell foreign exchange in the course of the week. This moderated demand pressure in the market hence the appreciation of the naira.

Last week the naira recorded significant appreciation against the dollar in both the interbank and official foreign exchange market. In the interbank it appreciated by 62 kobo while it appreciated by 146 kobo in the official market.

The appreciation was prompted by 37 per cent decline in foreign exchange demand at the official market during the week. Demand dropped to $343 million from $550 million two week ago. Also the demand for last week was 31 per cent less than the $500 million offered by the apex bank for the week.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.