CBN Reinforces Oversight to Strengthen Financial System Amid Rising Global Challenges
The Central Bank of Nigeria (CBN) is enhancing its regulatory framework to ensure the stability and resilience of the nation’s financial system. Under the leadership of Olayemi Cardoso, the CBN is focusing on robust risk management strategies, compliance measures, and the recapitalization of banks. These actions aim to safeguard Nigeria’s financial sector against emerging global risks while ensuring its credibility both locally and internationally. Recently, the CBN hosted a mandatory compliance and Anti-Money Laundering (AML) workshop in collaboration with Citi, where key financial institutions discussed strategies to combat financial crimes and regulatory challenges.
One of the key components of CBN’s strategy is the reinforcement of dynamic, risk-based AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) programmes across financial institutions. Shola Phillips, the special adviser to the CBN governor, emphasized the importance of adaptive measures that respond to the evolving financial landscape. Additionally, CBN’s governor, Cardoso, reiterated the importance of a strong governance framework in financial institutions to prevent illicit activities and stressed the importance of maintaining transparency and high ethical standards in the banking sector.
The CBN’s efforts extend beyond compliance and oversight. The bank has set ambitious goals for the recapitalisation of commercial banks, which is seen as critical to strengthening the sector and expanding financial inclusion. By introducing higher capital requirements, the CBN aims to ensure that banks are well-positioned to support underserved markets, particularly Micro, Small, and Medium Enterprises (MSMEs), rural communities, and vulnerable populations. The recapitalisation drive, which began in 2024, is expected to help banks expand credit access and enhance economic growth, with several banks already meeting the new requirements ahead of schedule.
Furthermore, Nigeria’s fintech sector has made significant strides, positioning the country as a leader in financial technology across Africa. With a rapidly growing e-payment ecosystem, Nigeria recorded a 79.6% increase in electronic payment transactions in 2024, reaching an all-time high. The rise in e-payments has been largely attributed to the CBN’s cashless policies, which have spurred greater adoption of digital transactions. The CBN aims to further enhance its e-payment infrastructure, ensuring that Nigeria remains competitive on the global stage while also safeguarding consumers and preventing fraudulent activities in the digital space.
SOURCE: BUSINESS DAY