Central Bank of Nigeria:: Board of Directors
G. D. Paton Report
The period 1892 - 1952,
there was an enquiry by the then colonial administration to investigate
banking practice in Nigeria. The G. D. Paton Report which emanated from the
enquiry was the basis for the first Banking Ordinance of 1952. The ordinance
was designed to ensure orderly commercial banking and to prevent the
establishment of unviable banks. A draft legislation for the establishment
of Central Bank of Nigeria was presented to the House of Representatives in
March, 1958. The Act was fully implemented on 1 July, 1959 when the Central
Bank of Nigeria came into full operations.
Central Bank Act, 1958
The Central Bank
Act, 1958 (as amended) and the Banking Decree 1969 (as amended) constituted the
legal framework within which the CBN operates and regulates banks. The wide
range of economic liberalization and deregulation measures following the
adoption, in 1986, of a Structural Adjustment Programme (SAP) resulted in the
emergence of more banks and other financial intermediaries. Decree 24 and 25 of
1991 were, therefore, enacted to strengthen and extend the powers of CBN to
cover the new institutions in order to enhance the effectiveness of monetary
policy, regulation and supervision of banks as well as non-banking financial
institutions. Unfortunately in 1997, the Federal Government of Nigeria enacted
the CBN (Amendment Decree No. 3 and Banks and other Financial Institutions [BOFI
(Amended)] Decree No. 4 in 1997 to remove completely the limited autonomy which
the Bank enjoyed since 1991.
The 1997 amendments
The 1997 amendments
brought the CBN back under the supervision of the Ministry of Finance. The
Decree made CBN directly responsible to the Minister of Finance with respect to
the supervision and control of bank and other financial institutions, while
extending the supervisory role of the bank to other specialised Banks and
Financial Institutions. The amendment placed enormous powers on the Ministry of
Finance while leaving the CBN with a subjugated role in the monitoring of the
financial institutions with little room for the Bank to exercise discretionary
powers.
The current legal framework within which the CBN operates is
the CBN (Amendment) Decree No. 37 of 1998 which repealed the CBN (Amended)
Decree No. 3 of 1997. The Decree provides a measure of operational autonomy for
the CBN to carry out its traditional functions and enhances its versatility.
Banks and other Financial Institutions (Amendment)
Decree
Furthermore, the regulatory powers of the CBN were
strengthened by the Banks and other Financial Institutions (Amendment) Decree
No. 38 of 1998 which repealed BOFI (Amendments) Decree No. 4 of 1997. Through
the amendments, the CBN may vary or revoke any condition subject to which a
license was granted or may impose fresh or additional condition to the granting
of a license to transact banking business in the country.
By the Decree, the CBN's powers on banks, specifically those
relating to withdrawal of licences of distressed banks and appointment of
liquidators of these banks, including the NDIC was restored.
The CBN has also taken responsibility for nurturing the money
and capital markets. In furtherance of this, the CBN introduced treasury bills
in 1960, treasury certificate in 1968, and facilitated the establishment of
Lagos Stock Exchange in 1961 and the capital issue committee now known as the
Securities & Exchange Committee in the early 1970s. |