The Central Bank of Nigeria (CBN) has assured that deposit money banks in the country have remained stable, robust and resilient despite the disruptions by Covid-19 pandemic. This is as the apex bank has said it would continue to continuously monitor the bank to detect early vulnerabilities to ensure pre-emptive action as well as apply some regulatory measures for the growth of the sector.
This was made known by CBN’s Director, Banking Supervision, Mr Haruna Mustafa, at the 2021 Financial Correspondents Association of Nigeria (FICAN) workshop in Ibadan on Friday.
Mustapha, represented by the Assistant Director, Banking Supervision, CBN, Mr Adekunle Adeniji, said the Capital Adequacy Ratio (CAR) rose to 15.21% as at August, Liquidity Ratio (LR) rose to 42.23%. According to NAN, the CBN Director said non-performing loan ratio improved from 6.58% to 5.9% as at August 2021, while banking system credit to the economy increased to 10.99% between January and August.
What the CBN Director, Banking Supervision is saying
He said that some of the intervention programmes introduced by the apex bank to help reduce the impact of the coronavirus pandemic include reduction in interest rates to 5%, N50 billion target credit facility for households and Small and Medium Enterprises (SMEs).
It also includes the re-enactment of the Banks and Other Financial Institutions Act (BOFIA 2020) to strengthen the regulatory and resolution architecture for banks and other financial institutions.
The director said CBN would continue to develop additional countercyclical policy options that could be utilised in periods of stress adding that macro-prudential regulation and supervision was more critical now than ever.
He said, “We expect financial services to be provided more in a digital manner. We will continuously update and assess our prudential rule books and policy to strengthen responses to economic and financial shocks.
“We will continue to deploy effective stress testing methodologies to detect vulnerabilities early to enable appropriate pre-emptive action.’’
Mustafa explained that the banking sector had also sustained the growth of key economic activities, which were impacted by the pandemic in the agriculture, manufacturing, retail, healthcare, hospitality and tourism sectors.
In case you missed it
- Recall that earlier in July, the CBN had asked the banking public to disregard any report alleging insolvency in the Nigerian banking sector, insisting that the Nigerian Deposit Money Banks and other financial institutions under its supervision are resilient, safe and sound despite the pandemic.
- The apex bank urged members of the banking public to take advantage of the services provided by banks, particularly intervention programmes initiated by the CBN, to enhance their economic status and contribute to overall national development.