Bank Directors Association of Nigeria (BDAN) has urged commercial banks to comply with the new directives from the Central Bank of Nigeria (CBN) on excess dollar and to actively participate in the implementation process to achieve full compliance.
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The association, in a statement by Mustafa Chike-Obi, chairman of the board of directors, said it was aware of the recent guidelines/circulars issued by the CBN, aimed at fortifying the nation’s financial system. The statement noted that the association wholeheartedly supports these comprehensive measures which underscore the commitment of the apex bank to ensuring the stability and resilience of the banking sector.
Amid concerns surrounding the escalating foreign currency exposure of banks through their Net Open Positions (NOP), the leadership of the CBN last week issued a circular titled ‘Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.’ In this directive, the CBN stipulates that the OP limit for overall foreign currency assets and liabilities should not exceed 20 percent short or zero percent long of shareholders’ funds.
This directive, along with other prudential requirements outlined in the circular, plays a critical role in ensuring the effective management of foreign currency exposures. By imposing these limits, the CBN aims to mitigate potential losses that could pose significant systemic challenges.
These regulatory measures underscore a strategic initiative aimed at bolstering risk management, transparency, and accountability within the financial industry. 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.
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“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 statement reads.
