CBN Reaffirms Commitment to Financial System Stability, Says Depositors’ Funds Safe

The Central Bank of Nigeria (CBN) is stepping up its efforts to ensure the stability, safety, and soundness of the nation’s financial system, especially amid global economic challenges and risks facing the banking sector.

In a recent interview, Hakama Sidi Ali, the Acting Director of Corporate Communications at the CBN, shared insights on the importance of public confidence in the banking system. “We want to reassure the public that we are fully committed to maintaining the stability and reliability of Nigeria’s financial system,” Ali stated. “Confidence is critical in banking, and we want to emphasize that all deposits in Nigerian banks are secure.”

Ali explained some of the proactive measures the CBN employs to enhance financial stability. “We ensure that banks comply with established regulations and best practices. This includes conducting regular stress tests to identify potential vulnerabilities, which helps us bolster the resilience of our financial institutions,” he elaborated. The CBN has also introduced Early Warning Systems aimed at detecting and mitigating emerging risks, enabling timely intervention when necessary.

With a focus on risk-based supervision, the CBN is prioritizing regulatory efforts on institutions that present the greatest risk to the financial system. “This targeted approach allows us to maintain robust oversight while promoting the overall health of the banking sector,” Ali noted.

The CBN’s commitment extends beyond Nigeria, as it has established Memoranda of Understanding (MoUs) with foreign regulators to oversee Nigerian bank subsidiaries abroad. “This enhances our cross-border regulatory coordination, ensuring that Nigerian financial institutions operate safely and soundly in their international ventures,” he added.

In a related development, the Chartered Institute of Bankers of Nigeria (CIBN) and the Body of Banks’ Chief Executive Officers recently addressed growing criticisms of Nigerian banks on social media. In a joint statement, they emphasized the crucial role the banking sector plays in the economy and called for a more balanced perspective, encouraging the public to recognize the industry’s contributions to national development.

The CIBN pointed out that Nigeria’s banking industry is one of the most stringently regulated in the country, overseen by the CBN and other bodies like the Nigerian Exchange Group and the Securities and Exchange Commission. This regulatory framework promotes transparency, accountability, and integrity within the sector.

Dr. Oliver Alawuba, Chairman of the Body of Banks’ CEOs, and Prof. Pius Deji Olanrewaju, CIBN President, acknowledged that despite social media criticisms, Nigerian banks continue to attract strong investor confidence, making the sector a preferred choice for both retail and institutional investors.

Alawuba remarked, “The banking sector is vital for Nigeria’s economic growth. Its intermediary role facilitates development, significantly affecting individuals, businesses, and society.” He and Olanrewaju urged that any concerns regarding banking operations should be addressed to the appropriate regulatory authorities like the CBN and NDIC, which are equipped to handle complaints fairly.

The organizations cautioned that airing grievances on social media could erode the trust in the banking system and damage the reputation of institutions essential to the economy. “We implore those engaging in such discourse to reconsider and focus on the facts before making allegations,” they urged.

“The banking sector is dedicated to maintaining the highest service standards, guided by stringent industry regulations. Together, we can foster an environment of trust and collaboration, acknowledging the positive impact of a professional, globally competitive banking sector,” they concluded.