The Apex bank of Nigeria, Central Bank of Nigeria (CBN) has instructed banks and other financial institutions to pay utmost attention to credit risk, operational risk, legal risk, liquidity risk, reputation risk and compliance with rules for fighting money laundering, bank rolling of terrorism and proliferation financing.
This development comes as the Nigeria Deposit Insurance Corporation (NDIC) has advised depositors to avoid investment offers with quick and arbitrarily high returns.
The apex bank demonstrated specific risk management requirements to be exercised by the financial institutions. These include being responsible for monitoring and supervising the activities of their agents, having information on the numbers and volumes of transactions carried out for each type of service by each agent, and monitoring effective compliance with set limits and establishing other prudential measures in each case.
They are to acquiesce with Nigerian Data Protection Regulation (NDPR) and other relevant data protection laws and regulations, conduct due assessment of agent’s credit worthiness and set limit structures for agent’s various activities commensurate with this assessment, have product programs, procedure manuals and customer transaction limits, while considering implications for operational and liquidity risks for agents, and ensure that risks related to electronic banking as well as information and data security risks, in respect of agent banking, shall be managed by the financial banks in a urgent manner.
The Central bank said the financial institutions should have a business continuity plan which accommodates agent banking operations to mitigate any significant disruption, discontinuity or gaps, and institute systems and personnel to adequately monitor and control agent banking operations on an ongoing basis.
Over time, the agent banking initiative has produced in the ubiquity of financial services agents across Nigeria, resulting in a significant and growing portion of financial transactions being conducted through the agents. This has necessitated the review of agent banking regulations to streamline activities in agent banking while ensuring that appropriate risk mitigation measures are taken by stakeholders, the instructed guidelines stated.
The agent banking initiative in Nigeria has proved to be a useful tool for achievement of the financial inclusion targets set for the country.
Leave a Reply