The Nigeria Deposit Insurance Corporation (NDIC) is worried that weak corporate governance and poor risk management frameworks, which are major challenges of primary mortgage banks (PMBs), can result to huge toxic assets and ultimately put insured depositors at risk.
Consequently, the corporation has moved to address the emerging challenges of these institutions through implementation of Basel II and III.
Umaru Ibrahim, managing director and chief executive of NDIC, said, “While I urge the PMBs to look deeper into emerging risk management issues at their various institutions, I want to assure you that both the Central Bank of Nigeria (CBN) and us are making concerted efforts to ensure that risk management issues in the financial system are continuously addressed. To this end, we are rapidly developing capacity in the implementation of Basel II and III.”
He said PMBs in Nigeria can create significant impact if only they adhere to recommended corporate governance practices based on effective and sustainable risk management practices as instituted by regulatory authorities.