Expert urges CBN to enforce Basel 2 regulatory framework for banks
Afinancial expert, Dr Dan Okehi has called on the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation to set up regulations that will help Nigerian banks attain Basel 2.
The Basel Committee on Banking Supervision provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide.
Dr Okehi said the committee has developed Basel 1,2,3 and it is working on Basel 4 but it sad that Nigeria is stuck with Basel 1.
He said the committee sets minimum standards for the regulation and supervision of banks by sharing supervisory issues, approaches and techniques to promote common understanding and to improve crossborder cooperation and by exchanging information on developments in the banking sector and financial markets to help identify current or emerging risks for the global financial system. ‘‘Nigeria cannot afford to be laid back on these issues’’, he said.
Dr Okehi spoke to Daily Trust exclusively on the sideline of the launch of an Enterprise Risk Management software, a fallout of his PhD research aimed at examining banks failure in Nigeria over the years.
The research, which led to developing the software, used multiple revision model which sought to know if ineffective risk management, poor corporate governance practice and non -adherence to regulations played important roles on bank performance .
“We have developed a software that improved all software on risk management in the field which has recorded a sale of almost one million copies”, he added
He argued that the banks control the payment systems and if that system is faulty, the economy will be affected.
He added the banks are supposed to be building strong cash and revenue base from retail operations to create stability. Dr Okehi also wants the banks to prune their managerial expenses, noting that the cost of operations in Nigerian banks is very high.
He also called for the Cash Reserve Ratio (CRR) to be reduced from 13 per cent to 9 percent
CRR is the specified minimum fraction of the total deposits of customers set by the CBN, which the commercial banks have to hold as reserves either in cash or as deposits with the central bank.
Ms. Abisola Gbotoso, Chief Education Officer,Lagos State Education District 2, with the winner of the Debate Competition in the junior category, Ruth Oruchukwu Iwodike of Army Cantonment Junior Secondary School, Maryland, Lagos; first runner-up, Fauziyat Ibrahim of Community Junior High School, Wasimi Maryland and CSR Manager, Etisalat Nigeria, Oyetola during the Etisalat Nigeria Career Counseling Day held in Lagos.