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INVESTMENT
THE
STRUCTURE OF THE NIGERIAN FINANCIAL SYSTEM
Regulatory Authorities
The
Nigerian financial system comprises bank and non-bank financial institutions
which are regulated by the Federal Ministry of Finance (FMF), Central
Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Securities
and Exchange Commission (SEC), National Insurance Commission (NIC), Federal
Mortgage Bank of Nigeria (FMBN), and the National Board for Community
Banks (NBCB).
The Federal
Ministry of Finance (FMF)
The
Federal Ministry of Finance advises the Federal Government on its fiscal
operation and co-operates with CBN in monetary matter. Recent amendment
to the laws of the Central Bank of Nigeria compels it to report through
the Federal Ministry of Fiancee to the Presidency.
The Central
Bank of Nigeria (CBN)
The
CBN is the apex regulatory authority of the financial system. It was established
by the Central Bank of Nigeria Act of 1958 and commenced operations on
1st July 1959. Among its primary functions, the Bank promotes monetary
stability and a sound financial system, and acts banker and financial
advisor to the Federal Government, as well as banker of last resort to
the banks. The Bank also encourages the growth and development of financial
institutions. Enabling laws made in 1991, gave the Bank more
flexibility in regulating and overseeing the banking sector and licensing
finance companies which hitherto operated outside any regulatory framework.
The Nigerian
Deposit Insurance Corporation (NDIC)
The
NDIC compliments the regulatory and supervisory role of the CBN. It is
however autonomous of the CBN and reports to Federal Ministry of Finance.The
NDIC effectively took off in 1989 and was set up to provide deposit insurance
and related services for banks in order to promote confidence in the banking
industry. The NDIC is empowered to examine the books and affairs of insured
banks and other deposit-taking financial institutions. Licensed banks
are mandated to pay 15/16 of 1% of their total deposit liabilities as
insurance premium to the NDIC. A depositor's claim is limited to maximum
of N50000.00 in the event of a bank failure
The Federal
Mortgage Bank of Nigeria (FMBN)
The
FMBN took over the assets and liabilities of the Nigerian Building Society.
The FMBN provides banking and advisory services, and undertakes research
activities pertaining to housing. Following the adoption of the National
Housing Policy in 1990, The FMBN is empowered to licence and regulate
primary mortgage institutions in Nigeria and act as the apex regulatory
body for the mortgage finance industry. The financing function of the
Federal Mortgage Bank of Nigeria was carved out and transferred to the
Federal Mortgage Finance, while the FMBN retains its regulatory role.
The FMBN is under the control of the Central Bank.
Financial
Services Co-ordinating Committee (FSCC)
This
is a committee established to co-ordinate the activities of all regulatory
institutions in the financial system. The Committee is chaired by the
Federal Minister of Finance.
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