THE Nigeria Deposit Insurance Corporation (NDIC) and the Chartered Institute of Bankers of Nigeria (CIBN) have urged the Senate to retain the autonomy of the Central Bank of Nigeria (CBN) in line with global best practices and in accordance with the 2007 Act of the apex bank.The support for the apex bank's autonomy formed part of the NDIC's memorandum to the joint Senate Committee on Banking, Insurance and other Financial Institutions and Judiciary, Human Rights and Legal Matters on the Amendment of the CBN Act 2007The CIBN President, Mr. Segun Aina, in his presentation, said: 'After examining the governance structure of Central Banks across the developed and emerging/frontier economies and the impact on central bank independence, we found out that the CBN Act 2007 is in line with International best practices'.He explained that an independent central bank would be in the best position to ensure financial stability, sound economic performance, stable economic growth, access to resources to achieve its policy objectives, a positive international perception among other benefits than when under control of an external body or agency.According to the NDIC, in Western democracies, there has been a long-standing tradition to grant their respective central banks functional, administrative as well as financial and budgetary independence so as to ensure their effectiveness in the formulation and execution of monetary policy.NDIC said: 'The CBN clearly uses public resources to perform its functions. Any increase in its expenditures reduces its profits and so reduces its annual payment to the consolidated revenue account. These expenditures include the administrative costs of developing and implementing monetary policy, providing financial services to the Federal Government of Nigeria (FGN) and the banking system, and supervising and regulating banks and their holding companies.'Aina observed that Central Banks all over the world have the core mandate of ensuring monetary and price stability, non-inflationary growth as well as the responsibility of ensuring a sound and stable financial system, in addition to other developmental functions.'While the National Assembly is undoubtedly vested with oversight powers in respect of the use of public resources, it also, must be mindful of the effect of increased control over the independence of the CBN to determine and implement its budget without which it cannot perform its monetary policy functions efficiently and effectively.'We believe that the CBN, just like the Fed in the United States of America (USA), should continue to report its activities to the National Assembly through its appropriate committees,' the bodies noted.
Click here to read full news..
