Reps to probe banks, financial institutions over non-compliance with CBN directives

The House of Representatives has resolved to conduct an investigative hearing on the non-compliance by banks and financial institutions with Central Bank of Nigeria, CBN, directives on the Net Open Position Limits.

The resolution of the House followed the adoption of a motion of urgent national importance on the need for banks to implement CBN’s policies on holding excess long foreign exchange and net open position limits, moved at the plenary on Wednesday by Hon. Babajimi Benson.

Moving the motion, Benson explained that CBN is saddled with the responsibility of regulating the monetary policies of the country as provided for by the CBN Act.

He said in the performance of this duty, the CBN is empowered to make regulations and give directives for commercial banks and certain financial institutions to implement.

The lawmaker added that Section 8 (4) and (5) of the CBN Act requires that the CBN Governor is expected to brief the relevant Committees of the National Assembly during the semi-annual hearings as well as provide periodic reports on the performance of the economy to the National Assembly.

He expressed concern that there had been a steady rise in the exchange rate of the Dollar in comparison to the Naira, adding that it rose to N1,520 in the last week.

Benson expressed worry that the astronomical rise has been caused by diverse market forces and certain economic policies adopted by the government, including the liberalisation of the Dollar.

He also lamented that commercial banks and certain financial institutions in Nigeria usually hold back a large part of forex they obtain, either through purchase, borrowing or allocation from the CBN, rather than lending to their customers, with a view to selling it when the exchange rate is high.

Credit: dailypost.ng

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