The International Monetary Fund has strongly urged the Central Bank of Nigeria to unwind the regulatory forbearance granted to Deposit Money Banks during the COVID-19 pandemic.
It also cautioned against the Federal Government over the proposed amendment to the Act establishing the apex bank, saying the autonomy of the central bank must be preserved.
The position of the Fund was contained in the Article IV Staff Consultation Report of the Board of Governors of the global organisation, which was released on Thursday in Washington DC, United States.
Although the fund didn’t give details on the waivers granted to the banks, it emphasised the importance of close monitoring of the institutions for financial sector risks.
The report read, “Directors emphasised the importance of close monitoring of financial sector risks. They supported the increase in the minimum capital for banks and urged the CBN to unwind the regulatory forbearance introduced during the pandemic. Directors acknowledged the recent improvements in the AML/CFT framework and called for sustained action to exit the FATF grey list. They supported the authorities’ efforts to foster financial inclusion and deepen the capital market.”
The IMF asserts that the legal and operational framework surrounding monetary policy in Nigeria needs fortification.
Furthermore, the IMF lamented the absence of a clear hierarchy among the objectives of the CBN, coupled with the inclusion of government representatives on the Board of Directors and potentially the Monetary Policy Committee, as outlined in the 2007 CBN Act.
