” CBN and NDIC Represent Key Components Of Nigeria’s Financial Safety-net Arrangement”- CBN Governor, Godwin Emefiele
Fintech firms, according to Governor Godwin Emefiele, are causing disruptions in the banking industry’s operations.
Emefiele stated this on Tuesday, October 4 in Abuja at the International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) technical assistance session.
The CBN governor called the recent developments “very disturbing,” adding that they have continued to upend conventional methods of providing financial services in the banking industry. He urged the banking industry regulators to gird themselves immediately.
Additionally, Emefiele advised Fintechs that wish to operate as banks to step forward and provide N25 billion.
“We will ensure that we can put in place strong regulatory framework and practices that should help nip in the bud, the unfortunate incident that may happen as we try to allow the growth of fintechs in Nigeria.
“Fintechs who want to be deposit-taking institutions should come forward and become a bank, bring N25 billion and be a bank.
“Our deposit insurance system (DIS), as a component of the financial safety-net arrangement, is the risk-minimiser model and has been very effective in the discharge of its mandate. The CBN and NDIC represent key components of Nigeria’s financial safety-net arrangement.
“That partly explains why we have been able to successfully resolve the series of financial crises that confronted us with satisfying results.
“It is instructive to mention that the CBN and NDIC have been able to deal with the emerging crisis in the nation’s banking system. The 2009 banking crisis, 2004 banking consolidation exercise and their subsequent resolutions, provided a reference point of the benefit for effective collaboration between the central bank and deposit insurer.”