Central Bank Nigeria cracks the whip

Payment policy reforms
That the era of suspended CBN governor, Sanusi Lamido, witnessed the most outstanding improvements in the transformation of the payment system is not in doubt. Under his watch, the Central Bank started the Cashless Lagos initiative aimed at reducing the dominance of cash in the system in 2012 by imposing penalties for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits. At its initial stage, there were less than 10,000 points-of-sale (PoS) in Lagos, but currently there are over 150,000 in Lagos State. Chidi Umeano, the Central Bank’s head of shared services, said the policy, currently running in six states plus the Federal Capital Territory (FCT) Abuja, will be implemented nationwide on 1st July.

The CBN is also working on getting the payment system completely overhauled, with the launch of a $50m biometric solution project. Godwin Emefiele, CBN governor designate, who is also chairman of the Bankers’ Committee Sub-committee on Biometrics, believes it will revolutionalise banking. Currencies analyst at Ecobank Nigeria, Olakunle Ezun, says the incoming governor must consolidate the successes recorded by his predecessor in both the payment system and banking reforms: “Foreign investors will look out for some qualities in the new governor, especially the independence of the central bank.”

Other policy reforms
From now on, the central bank will vet all prospective bank employees so that people involved in fraud – erstwhile bank employees indicted, terminated or dismissed for fraud and other acts of dishonesty – are not allowed back in financial services. Tokunbo Martins, director of banking supervision at the CBN, said banks will be expected to obtain the Central Bank’s prior approval for all prospective employees.

To improve online clearing, on 4th September, the central bank will begin same-day value for cheque transactions. Dipo Fatokun, director, banking and payment system, explained that the cheque-clearing system was a result of developments in cheque processing.

Women empowerment issues have also been taken on board by the Central Bank. The banking sector has made a commitment to increase the critical mass of women in the decision-making process, with 40% of top management positions and 30% of board positions to be occupied by women within this year. CBN’s acting governor, Dr Sarah Alade, said that it had been emphasised to banks that compliance is very important and, by the end of the year, the CBN will review how effectively the banks have complied with its regulatory directive.