The CBN governor, Dr Olayemi Cardoso, stated this in his speech at the 2023 Bankers Dinner on Friday night.
According to Cardoso, while there has been stability in the banking sector, banks in the country were not adequately capitalised to meet the need of a $1 trillion economy which the present government was aiming to achieve.
“It is crucial to evaluate the sufficiency of the banks”, Cardoso said, noting that the CBN will be directing banks to increase their capital base.
He added: “It is not just about the stability of the financial system in the present moment, as we have already established that the current assessment shows stability. However, we need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1.0 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action. Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital.”
The CBN boss also stressed the importance of technology in delivering financial services as well as enhancing financial inclusion.
He pointed out that some financial institutions have breached their licences regarding the use of technology to facilitate payment, adding that the CBN has observed that some institutions were operating outside the approved activities.
“Any intentional or unintended non-compliance will be subject to sanctions as operators have the responsibility to ensure that they are licenced for the activity they undertake.
“As we conduct a comprehensive review of the licencing framework for payment services, we will engage in extensive consultations to engage a new regulatory and compliance framework that is suitable for the technology-driven payment services sector”, he warned.
On the Monetary Policy Committee (MPC) meeting, which the bank has shelved twice in a row, Cardoso explained that the apex bank has met the statutory requirement, which stipulates four minimum meetings per year.
“For the avoidance of doubt, the Central Bank of Nigeria Act 2007 requires that the meeting of the Monetary Policy Committee of the Bank holds at least four times a year, and the Bank has satisfied this requirement for 2023. Our focus has been on ensuring these meetings are useful and effective,” he said
Speaking on the 43 items previously restricted from accessing foreign exchange (forex) from the investor’s and exporters’ (I&E) window, Cardoso said: “During the period when the 43 items were restricted, there is a 51 per cent increase in trade evasion by importers accessing the foreign exchange market resulting in a revenue drop of approximately $1.4 billion annually between 2015 and 2019.”