Ex­pert urges CBN to en­force Basel 2 reg­u­la­tory frame­work for banks

Daily Trust - - BUSINESS - By Sun­day Michael Ogwu, La­gos

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.

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