New Telegraph

NDIC: We’re Heightening Banks Scrutiny

Against the backdrop of growing concern that a high interest rate environment, coupled with the harsh business environment might lead to an increase in banks’ impaired loans, the Nigeria Deposit Insurance Corporation (NDIC) has said that it is heightening surveillance of the nation’s banking system. The Managing Director and Chief Executive of the NDIC, Bello Hassan, disclosed on the sidelines of the maiden retreat organ- ised by the corporation for the Senate Committee on Banking, Insurance and other financial institutions held in Lagos over the weekend. According to him, the NDIC is collaborating with the Central Bank of Nigeria (CBN) to ensure efficient supervision of banks.

He said: “The NDIC is collaborating with the CBN to supervise these banks and there are a lot of measures that are being put in place to ensure that we heighten our surveillance during this period to ensure that the quality of their assets is satisfactory. As we speak now, the Non-Performing Loans (NPLs) ratio of the banks is below the maximum thresh- old set by the CBN and we want to ensure that we stay within that limit. “So, various measures are being put in place to height- en the supervision, so that we don’t get to a situation whereby the quality of as- sets deteriorates within the banking system, so as to ensure that the banks continue to remain safe and sound.”

Also speaking with journalists at the event, Chairman, Senate Committee on Banking, Insurance and other Financial Institutions , Senator Adetokunbo Abiru, said that although CBN data showed that lenders have been very resilient de-spite the global headwinds, the Committee supports the CBN’s planned banking recapitalisation given the depreciation of the Naira. He, however, advised the apex bank to ensure that in implementing the recapitalisation programme, it engages effectively with all stakeholders, especially the National Assembly. Responding to a question on the forex crisis, Senator Abiru said that the CBN should be given more time to stabilise the Naira, adding, however, that the apex bank should focus more on curbing inflation.

He said: “We have recent- ly seen a raft of CBN circulars. In the last of couple of days, we have seen the Naira begin to appreciate. So, my sense is that we should give them a bit of time. Most of the policy decisions we are beginning to see will help us hopefully moderate the depreciating value of the currency. “But I must also mention that what is most critical is for them to focus on how they would tame or moderate inflation. Because once you moderate inflation, I’m sure that the other price indices will also begin to moderate.”

He commended the NDIC for what he described as the corporation’s role over the years in protecting depositors and the banking system from instability. He also lauded the NDIC for organising the retreat for members of the committee, noting that with the forex crisis as well as the impending bank recapitalisation, it was important that legislators understand the role that the regulators are playing.

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