In This Post I will like to explain what are they duties, you Will Also know what are the responsibilities of central Bank of Nigeria
You may also think of the functions of central Bank of Nigeria at the end of this post you will understand why CBN is the apex bank in Nigeria
Central Bank of Nigeria
Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN as Act of 1958 and begins operations on 1 July 1959.
CBN was acronym from CENTRAL BANK OF NIGERIA
Responsibilities of central Bank of Nigeria CBN
The major regulatory objectives of the bank as stated in the CBN Act are to:
1 maintain the external reserves of the country,
2 promote monetary stability and a sound financial environment,
3 It act as a banker of last resort and financial adviser to the federal government.
Function of CBN
The central bank’s role as lender of last resort and adviser to the federal government has sometimes pushed it into murky regulatory waters. After the end of imperial rule the desire of the government to become pro-active in the development of the economy became visible especially after the end of the Nigerian civil war, the bank followed the government’s desire and took a determined effort to supplement any show shortfalls, credit allocations to the real sector. Bank became involved in lending directly to consumers, contravening its original intention to work through commercial banks in activities involving consumer lending.
Moreso, the policy was an offspring of the indigenization policy at the time. Nevertheless, the government through the central bank has been actively involved in building the country’s money and equity centers, forming securities regulatory boards, and introducing treasury instruments into the capital market.
CBN has thirty-six branches each in the 36 states of the federation and FCT is the headquarters.
Statutory Powers and Duties of CBN
The Central Bank of Nigeria establishment Act 2007[25] affirms the establishment of a body known as the Central Bank of Nigeria. The act also states the fundamental objects of the bank, which include the sole power to issue notes and coins, maintain an external reserve for country and generally supervise the entire banking system in Nigeria.
The Banks and Other Financial Institutions as Act, 2020,[26] empowers the Governor of the CBN is to issue a license to anyone wanting to start a banking business in Nigeria, with specific procedures.
The act prohibits anyone from operating a banking business in Nigeria without such a license. Additionally, the BOFIA empowers the Governor of the CBN to issue regulations, guidelines and policies to banks, specialized banks, and other financial institutions in Nigeria. And to appoint officers to supervise and examine these institutions according to the dictates of the governor. Also, Section 5 of the BOFIA empowers the CBN to revoke the license of any bank for stipulated reasons.
The mandate of the Central Bank of Nigeria is derived from the 1958 Act of Parliament, as amended in 1991, 1993,1997,1998,1999 and 2007.
The CBN Act of 2007 of the Federal Republic of Nigeria charges the Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government.
Roles of central Bank
The Role of the CBN are as follows:
1 ensure monetary and price stability
2 issue legal tender currency in Nigeria
3 maintain external reserves to safeguard the international value of the legal tender currency
4 promote a sound financial system in Nigeria
5 act as Banker and provide economic and financial advice to the Federal Government.
Consequently, the Bank is charged with the responsibility of administering the Banks and Other Financial Institutions Act (BOFIA), 2020, with the sole aim of ensuring high standards of banking practice and financial stability through its surveillance activities, as well as the promotion of an efficient payment system.
In addition to its core functions, CBN has over the years performed some major developmental functions, focussed on all the key sectors of the Nigerian economy (financial, agricultural and industrial sectors). Overall, these mandates are carried out by the Bank through its various departments.
CBN Departments
There are 28 Departments in the Central Bank of Nigeria grouped in order of related performance and job descriptions and to facilitate smooth operations and management of those department.
The formation of these directorates also reduces the pressure that would have brought to bear on the CBN governor Each directorate is headed by deputy governor
Management department
Management approved the establishment of 5 directorates
Financial System Stability Directorate
Economic Policy Directorate.
Corporate Services Directorate
Operations Directorate
Governors’ Directorate
In March 2010, the Central Bank of Nigeria launched its restructuring program tagged Project ACE with a view to repositioning and reinventing CBN for sustainable improvement of overall Accountability, Communication,Efficiency and Effectiveness
The imperative for change was anchored on the CBN’s recognition of the need to gear up its systems and organization for strategic and business effectiveness issues.
To ensure efficiency and effectiveness, and also to enhance smooth communication between and among departments, a new Management Structure was also put in the place to drive this Change.
