There are hints that the Central Bank of Nigeria (CBN), in an effort to revitalize the institution, has covertly reassigned senior executives within the national bank.
According to a Monday article in The Guardian, Olayemi Cardoso, the governor of the CBN, has assumed responsibility for “housecleaning” and started a thorough staff audit with the intention of reallocating employees who are deemed unfit for their positions in accordance with the bank’s new strategy.
Although the CBN was unable to formally verify the story, a few of the impacted employees did in fact corroborate the development.
This coincides with suggestions that the CBN may have pushed for the removal of prudential regulations from the Banks and Other Financial Institutions Act (BOFIA) and the CBN Act through review.
Eight directors were transferred to the Financial Sector Surveillance (FSS) Department in the Maitama office, per the postings.
The apex bank is clearly afraid that additional people may be impacted by the redeployments, even though the reasons for them are yet unknown.
Concerns have also been raised that the purging effort would eventually result in a mass layoff at the top bank.
With the exception of Philip Yusuf Yila, the former head of the CBN’s Development Finance Department (DFD) under Godwin Emefiele, the identity of those sent to the Maitama office are unknown.
Under a number of programs, including the Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS), and the Anchor Borrowers’ Programme (ABP), Yila oversaw the DFD, which was instrumental in assisting businesses by enhancing their access to financing.
During the COVID-19 pandemic, he also oversaw payments to homes and small businesses to lessen the effects of the ensuing lockdown.
Dr. Isa Abdulmumin, the Director of Corporate Communications, has also been reassigned, and Sidi Ali Hakama will assume the role in an acting capacity.
There are plans to repeal BOFIA and deprive CBN of prudential requirements in order to modernize the bank’s new orientation.
According to reports, Cardoso is in favor of the creation of a “Banking Commission,” which could merge with the Securities and Exchange Commission (SEC) in order to establish prudential regulations that protect the liquidity, solvency, and stability of intermediaries. These regulations would reportedly include risk diversification, capitalization, and loan-loss provision guidelines for the banking system.
This effectively suggests that there may soon be a proposal for a Banking Commission.
Establishing and implementing regulations for banks and other financial institutions will fall under the purview of the Commission.
Experts have recommended that the CBN be split into two organizations, as is the case in the UK and a few other nations where separate regulatory bodies are in charge of monetary policy and banking regulation.
The top bank has ordered banks to keep printing naira notes in the interim, both old and new. As per the bank, this comes after the Supreme Court’s order on Wednesday, November 29, 2023, which approved Lateef Fagbemi, the Attorney-General of the Federation and Minister of Justice, to prolong the use of the old Naira banknotes indefinitely.
According to a statement endorsed by Hakama, all banknotes produced by the CBN would perpetually remain legal money in accordance with Section 20(5) of the CBN Act 2007.
“The general public is urged to preserve and protect the banknote lifecycle by continuing to accept all naira banknotes—whether they are old or newly designed—for their daily transactions and to handle them with the utmost care.”
She concluded that “To lessen pressure on the use of physical cash, the general public is encouraged to embrace alternative modes of payment, such as e-channels.”
