CBN Governor, Sanusi Lamido Sanusi
The battle between the National Assembly and the Central Bank of Nigeria (CBN) over its autonomy has assumed a new dimension with the move by the House of Representatives to set up an independent body that will be responsible for banking supervision in the country.
THISDAY learnt that the House is working on a legislation that could strip the CBN of oversight over the banking system and transfer it to an independent body that will be responsible for banking supervision.
The proposed law, according to the lawmakers, would result in the withdrawal of the banking supervisory function of the central bank, leaving it to oversee monetary policies and currency management.
Chairman, House of Representatives Committee on Banking and Currency, Hon. Jones Onyereri, said in a phone conversation with THISDAY yesterday that the independent body might be named the “Financial Supervisory Committee”.
But the Director, Corporate Communications, CBN, Mr. Ugochukwu Okoroafor, who was contacted on the issue, said the central bank was not aware of such plans.
Onyereri insisted that the move became necessary so as to make the CBN focus more on its mandate of price stability and monetary policy.
He said: “We are trying to take that banking supervisory function away from the CBN because if you look at it closely, especially in Nigeria, most of the problems we have in the industry has to do with supervision. For some reason, we believe that the hands of the central bank are full.
“Creating an independent body will enable the CBN to focus on its mandate of price stability and monetary policy.”
He maintained that the move would be an important focus of the lawmakers this year.
According to him, the committee will soon begin consultations with various stakeholders in the banking sector.
However, Okoroafor said: “We are not aware of such plans. We are going to write to the House for clarification.”
Since last year, the National Assembly has been trying to amend the CBN Act 2007, which confers operational autonomy on the banking sector watchdog.
But the move by the lawmakers was vehemently opposed and failed to get widespread support, as experts had argued that riding the central bank of its autonomy was detrimental to the economy.
The bill to amend the CBN Act also seeks to divest the CBN Board of the power to consider and approve the annual budget of the bank.
The bill, according to its sponsors, would enhance transparency and entrench the principle of checks and balances in the administration and operations of the CBN.
The lawmakers had also argued that of the 12 members on the board as presently constituted, only the Accountant-General of the Federation and the representatives of the Ministry of Finance are from outside the CBN.
It is expected that the latest move by the House of Representatives to rid the CBN of its banking supervisory role will also hit a brick wall, as financial system analysts are bound to rally against it.