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The Central Bank of Nigeria's policy on cash-based transactions in banks is aimed at reducing the amount of physical cash circulating in the economy, thereby encouraging more electronic-based transactions. As a result of the implementation of this policy, the adequacy of laws regulating electronic banking and data protection issues must be considered.
The Nigerian Deposit Insurance Company (NDIC) recently announced that it was exercising its statutory powers to establish three bridge banks to assume the deposits and liabilities of Afribank Plc, Spring Bank Plc and Bank PHB. According to the NDIC, the deposits and liabilities of the failing institutions were being assumed in order to ensure the interest of depositors and to prevent liquidation.
As part of continuing efforts by the government and the Central Bank of Nigeria to clean up the banking sector and manage the impact of the global financial crisis in Nigeria, the National Assembly has passed an act creating the Asset Management Corporation. This corporation is designed to resolve liquidity problems in the financial sector and revive the vital credit role of deposit banks and financial institutions.
The Central Bank of Nigeria has recently reduced the up-country clearing cycle for payment instructions. The bank has also granted provisional licences to 76 finance companies in order to carry out finance company business in Nigeria.
As part of the development of a new framework for monetary policy implementation, the Central Bank of Nigeria has introduced a new Real-Time Gross Settlement (RTGS) system and replaced the minimum rediscount rate with a new monetary policy rate. The RTGS system is being instituted in response to the growing need to automate the existing settlement process within the Nigerian financial system.
The deadline given to Nigerian banks to comply with the anti-money laundering initiative has expired. Four out of the 25 re-capitalized banks have yet to comply with the initiative, as directed by the Economic and Financial Crimes Commission. The commission seeks to ensure that Nigerian banks are in tune with global standards and Financial Action Task Force requirements.