Bank Directors Back CBN’s Reforms Initiatives, Urge Industry Compliance

James Emejo in Abuja

The Bank Directors Association of Nigeria (BDAN) yesterday commended the ongoing reform initiatives of the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, which it said, were aimed at strengthening the resilience of the financial sector.

The association, in a statement signed by its Chairman, Mr. Mustafa Chike-Obi, pledged full support for the comprehensive measures that underscored the commitment of the central bank towards ensuring the stability and resilience of the banking sector.

BDAN, therefore, urged all banks to fully comply with the new directives and actively participate in the implementation process to achieve full compliance.

The association stressed that it believed the recent guidelines/circulars issued by the apex bank were aimed at fortifying the nation’s financial system.

Specifically, BDAN pointed out that the recent policy that banks’ Net Open Position (NOP) limit for overall foreign currency assets and liabilities should not exceed 20 per cent short or zero per cent long of shareholders’ funds – along with other prudential requirements outlined in the circular, played a critical role in ensuring the effective management of foreign currency exposures.

The bank directors added that by imposing these limits, the CBN seeks to mitigate potential losses that could pose significant systemic challenges.

It stressed that these regulatory interventions underscore a strategic initiative aimed at bolstering risk management, transparency, and accountability within the financial industry.

The statement said, “BDAN acknowledges and commends the central bank for its proactive stance in safeguarding the interests of depositors, investors, and the overall economic well-being of Nigeria.

“BDAN views these requirements as a positive step towards creating a resilient financial landscape and preventing adverse effects on the banking sector.

“The association applauds the CBN’s commitment to proactive regulation and remains supportive of initiatives that contribute to the stability and prosperity of the Nigerian economy.”

The group further acknowledged the meticulous work undertaken by the apex bank in consulting stakeholders and experts to ensure a balanced and effective regulatory approach.

“As advocates for responsible banking and ethical conduct, BDAN believes that these guidelines will contribute significantly to the long-term sustainability, growth, as well as the overall efficiency, transparency, and stability of the banking sector, ultimately contributing to the nation’s economic development.

“BDAN pledges its continuous collaboration with the Central Bank of Nigeria and other stakeholders to foster a dynamic and resilient financial ecosystem that serves the interests of all Nigerians.

“We believe that these steps are in the right direction to improve the effectiveness of the banking system and we are fully in support,” the statement added.