NDIC strengthens supervision of banks against failure in recession

In a move to guide against sharp practices by deposit money banks occasioned by economic recession, the Nigeria Deposit Insurance Corporation (NDIC) in collaboration with the Central Bank of Nigeria (CBN), has strengthened supervision of the sector.
Consequently, the regulators may tighten or relax the financial system prudential tools depending on the state of the economy.
Umaru Ibrahim, managing director/CEO, NDIC who was concerned that Nigerians have stared patronizing Bitcoin, a form of digital currency, noted that a committee has been set up to study the innovative product.
“Another phenomenon emerging in the banking and financial landscape, is the emergence of what is known as bitcoin. I understand that a lot of people have started to patronize bitcoin”, he said at the ongoing workshop for Business Editors and Finance Correspondents organised by the NDIC in Kaduna State.
Speaking further, he said, “On our part we have constituted a committee together with Central Bank to have an in depth study of this phenomenon, looking at the advantages and disadvantages, what it means for the payment  system, safety and security of customer, money laundering, point of correction, guide or measurement of quantum of money or near money instrument, and the economy”.
In his presentation on “refocusing banking supervision in Nigeria in an era of economic recession”, Adeleke A. A, director, bank examination department, NDIC, said the supervisory authorities would continue to take proactive measures to assure financial system stability.
While calling for active collaboration of all stakeholders, Adeleke said NDIC would continue to take measures to engender confidence in the financial system.
The impact economic stress is being felt differently by banks but not on the scale to precipitate systemic crisis.
According to Adeleke, the systemic impact had been contained by early adoption of macro-prudential supervision by regulatory and supervisory authorities.
The current economic crisis which has its root in oil price slide have resulted to crystallization of exchange rate risk and credit risk, in particular, on the balance sheet of banks.