NDIC Partners US on Risk-based Supervision

06 Apr 2012

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 NDIC MD, . Umaru Ibrahim

The Nigeria Deposit Insurance Corporation (NDIC) has said it had gone into collaboration with the Office of Technical Assistance (OTA) of the United States Treasury in conducting a six- week training programme on risk-based supervision (RBS) for staff of the corporation.

The NDIC in a statement signed by the Head, Communications and Public Affairs, NDIC, Mr.  Hadi  Birchi, said the event was arranged to build capacity among staff of the corporation.

In his keynote address at the opening ceremony of the training programme, the Managing Director and Chief Executive, NDIC, Mr. Umaru Ibrahim, said the need for the adoption of RBS framework in the supervision of banks in the country was based on the fact that institutions were getting more complex in terms of size, nature of products and volume of transactions.

He added that if these issues were not properly identified, measured, monitored and controlled, they could inflict damages on the institutions and the system at large. 
Ibrahim described the RBS as a proactive and efficient supervisory process, which focuses on the risk profile of the supervised financial institutions and enables the bank supervisors to develop a supervisory package for each bank.

The bank supervisors, he said, would also efficiently allocate resources based on the risk profile of individual banks and proactively monitor and supervise the banks in order to promote safety, soundness and stability of the financial system.

The NDIC boss emphasised that the RBS presented a framework with which banks were assessed on the basis of impact of their risks rather than on intuitive assessment.
“A risk-based supervisory process provides flexible and responsive supervision to foster consistency, coordination and communication among supervisors, relies on the performance of the risk assessment and development of a supervisory plan and procedures that are tailored to the risk profile of individual banks.

“In that regard, risk-based supervision identifies measures and controls risks as well as monitors risk management processes put in place by financial institutions during a supervisory period,” he added.

The main objectives of RBS, he said, were to sharpen supervisory focus on the activities or institutions that pose the greatest risk to banks and other financial institutions as well as the assessment of management process to identify, measure, monitor and control risks.

Tags: Business, NDIC, Nigeria, RBS

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