Investor Presentaiton
The Country and its
institutions
Business Organisation
and Regulation
Labour and Social
Security Regulations
The Nigerian Financial
Services Industry
Tax System
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods
Exportation of Goods
COVID-19 - Economic
and Fiscal Measures
.
NDIC Act, 2006;
Investment and Securities Act (ISA), 2007;
•
Insurance Act, Cap 117, LFN, 2004;
• Revised Operating Guidelines for Discount Houses (CBN 2003);
•
.
•
•
•
•
Nigerian Investment Promotion Commission (NIPC) Act, Cap N117, LFN,
2004;
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, Cap
F34, LFN, 2004; and
Money Laundering (Prohibition) Act No.3 of 1995 (now Cap M18, LFN,
2004).
Securities and Exchange Commission (SEC) Rules and Regulations 2011
Pension Reform Act (PRA), 2014
CBN Foreign Exchange Manual, March 2018
The CBN Act sets out the functions of the CBN, while BOFIA vests it with
the primary responsibility for a sound and stable financial system in Nigeria.
The CBN is empowered by BOFIA to license banks and discount houses,
supervise and examine their operations and apply sanctions against erring
operators under the Act.
The NDIC Act, was enacted in the wake of imminent bank failures following
the deregulation of the banking industry in the mid-eighties. All deposits
of licensed banks, with few exceptions, are required to be insured with
the NDIC. Banks are required to pay a premium based on their total
deposits as at the end of the government fiscal year (December). Based
on the Act, the maximum guaranteed payment to depositors in the event
of bank failure (i.e., the insured deposit) is #200,000. However, after the
initial payment, depositors who have deposits in excess of the guaranteed
amount may be able to recover all or part of their uninsured deposits upon
"The CBN is empowered by BOFIA to
license banks and discount houses,
supervise and examine their
operations and apply sanctions against
erring operators under the Act."
4.1.3
Profile of the Nigerian FSI
4.1.3.1 Banking sector
In the aftermath of the global financial crisis, the CBN made
significant reforms to the FSI to enhance the quality of banks,
ensure financial system stability, evolve a healthy financial sector
and ensure that the financial sector contributes to the real
economy.
One of such reforms was the conduct of special audits by the
CBN on banks. The audits focused on three major areas, namely,
liquidity, capital adequacy and corporate governance. Based on the
results of the audit, the CBN dismissed some bank executives and
injected a total of #620 billion into troubled banks in 2009 to save
the banking system from collapse. Following the CBN special audit,
the Asset Management Corporation of Nigeria (AMCON) Act was
enacted in 2010. AMCON's main purpose was to efficiently resolve
the non-performing loan assets of banks in Nigeria.
-
In 2011, AMCON purchased non-performing loans with an
aggregate face value of about #3.2 trillion from banks in the
Nigerian FSI at a negotiated price of about #1.6 trillion, and thus
injected liquidity into the banking system in the form of tradable
securities. The CBN also requested banks that failed the audit to
shore up their shareholders' funds - which had been significantly
eroded before the end of the year. This measure led to another
round of consolidation by way of mergers and acquisitions that
resulted in the emergence of 20 licenced and operational banks
at the end of September 2011 and three "bridge banks" created
through the combined efforts of the CBN, NDIC and AMCON.
Since then, creation of bridge banks to take over the operations of
distressed commercial banks has become a constant in the sector.
Another notable reform in the banking sector, is the revocation of
universal banking licences, and the introduction of a new banking
licence regime by the CBN in November 2010 via its Regulation on
the Scope of Banking Activities and Ancillary Matters. The banking
licences available under the new regime are:
commercial banking licence (with international, national or
regional authorisations)
•
merchant banking licence; and
• specialised banking licences (for non-interest banks,
microfinance banks, mortgage banks and development banks).
39
Investment in Nigeria Guide - 8th Edition
KPMGView entire presentation