The Senate has commenced the process of amending the Central Bank of Nigeria (CBN) Act of 2007, with the aim of extending the single term of the Governor of the apex bank to six years, eliminating the possibility of renewal after the current five-year term.

In addition, there is a proposed increase in the recapitalization for commercial banks, presently set at N100 billion, with the intention of raising it to N1 trillion. The Senate is actively pursuing comprehensive reforms in the organization, administration, and functions of the CBN. This was evident as they introduced an amendment bill for the second reading during Tuesday's plenary. Simultaneously, the Senate Committee on Banking, Insurance, and other Financial Institutions scrutinized nominees for the Board of Directors of the CBN.

The bill, championed by Senator Adetokunbo Abiru (APC Lagos East), advocates for a six-year single term for the CBN Governor, Deputy Governors, and members of the Board of Directors. Senator Abiru underscored that this change aims to diminish political influence on these positions. Drawing inspiration from international norms, he highlighted that institutions like the US Federal Reserve and the European Central Bank restrict their Chief Executive Officers to a single non-renewable term.

Concerning the N1 trillion recapitalization proposal, Senator Abiru outlined the intention to raise the paid-up capital of the bank to N1 trillion, contingent upon periodic government approval. The bill also introduces a Coordinating Committee for Monetary and Fiscal Policies to address the absence of provisions for policy coordination in the existing act.

Furthermore, the bill seeks to regulate the issuance of Ways and Means by the CBN to the Federal Government. It suggests limitations on advances to the government, stipulating repayment within three months from the date of availability. The bill also introduces safeguards to prevent defaults, including holding outstanding sums against the Federal Government's FAAC Receipts.

During Tuesday's session, the Senate screened nominees for the Board of CBN Directors, which included Mr. Robert Agbede, Mr. Ado Yakubu Wanka, and Mrs. Muslimat Olanike Aliyu.


https://biographyinsight.com.ng/senate-proposes-six-year-cbn-governor-term-n1-trillion-bank-recapitalization/

The current 100 billion naira bank capitalization is pale when compared against the devaluation of the naira and economic realities.

The banks need to sure up their capital base soonest before we start hearing of distress in that sector.

Nigerians will not take kindly to any bank that goes "belly-up" with their funds in this trying period.