The Association of Bank Managers of Nigeria said that the payment of deposit insurance premium on sterilized funds at the Central Bank of Nigeria as the cash reserve ratio impacts the profitability of banks.
They spoke at the annual BDAN summit in Lagos.
They said the continued payment of deposit insurance tax by banks to the Asset Management Corporation of Nigeria, the Nigeria Deposit Insurance Corporation and some other regulations pose threats to the industry.
Chairman, BDAN, Mustafa Chike-Obi, has called for an end to the huge sum paid to regulators for money that had been sterilized by the CBN as CRR, adding that it could save almost 50 billion naira to banks.
He said: “Why do banks pay deposit insurance on money that has been sterilized at CBN as CRR. If the cash reserve ratio has been sterilized by the CBN, there is no reason to ensure it at a minimum, all the discretionary normal CRRs that are at the CBN should not be subject to the calculation of the insurance of the deposits. This is an economy close to 50 billion naira. BDAN is the advocacy forum and banks should take us seriously.
Speaking on “Safeguarding Financial Stability in Nigeria – New Perspective for Banking Directors and Regulators”, Agusto & Co Founding Managing Director Olabode Agusto accused regulators and the Federal Government of being the main threats to the banking sector.
He said politicians were spending more than they were earning, causing interest rates to spike in the national system.
Deputy Governor, Financial System Stability Directorate, CBN, Aishah Ahmad, said, “We can work on those areas that are regulatory priorities to ensure the system remains resilient. We need to work on the single debtor limit and increase our exposure to currency risk.