Sunday, August 3, 2025
23.7 C
Lagos

NDIC: Developing Human Capital for Risk-based Supervision

The Nigeria Deposit Insurance Corporation (NDIC) in collaboration with the Office of Technical Assistance (OTA) of the United States Treasury recently conducted a six-week training programme on risk-based supervision as part of the Corporation’s capacity building initiative.

Alhaji Umaru Ibrahim, Managing Director/Chief Executive of NDIC, said the need for the adoption of RBS framework in the supervision of banks in the country was based on the fact that both the system and the institutions were getting more complex in terms of size, nature of products and volume of transactions. He added that if these complexities were not properly identified, measured, monitored and controlled, they could inflict damages on the institutions and the system at large.

Ibrahim described the risk-based supervision (RBS) as a proactive and efficient supervisory process, which focuses attention on the risk profile of the supervised financial institutions and enables the bank supervisors to develop a supervisory package for each bank. The bank supervisors, he said, would also efficiently allocate resources based on the risk profile of individual banks and proactively monitor and supervise the banks in order to promote safety, soundness and stability ofNigeria’s financial system.

The NDIC CEO emphasized that the RBS presents a framework with which banks are assessed on the basis of impact of their risks rather than on intuitive assessment. He further said that in contrast to the transaction and compliance based approach to supervision which is biased in favour of risk-avoidance and hence against innovative products and services, the RBS treats risks mitigating and offsetting as valid approaches to risk management.

According to him, “a risk-based supervisory process provides flexible and responsive supervision to foster consistency, coordination and communication among supervisors, relies on the performance of the risk assessment and development of a supervisory plan and procedures that are tailored to the risk profile of individual banks. In that regard, risk-based supervision identifies measures and controls risks as well as monitors risk management processes put in place by financial institutions during a supervisory period.”

A statement by H. S. Birchi, Head, Communication & Public Affairs at NDIC, says the main objectives of RBS, he said, are to sharpen supervisory focus on the activities or institutions that pose the greatest risk to banks and other financial institutions as well as the assessment of management process to identify, measure, monitor and control risks. He added that the main benefits of the RBS include among others focusing resources on each bank’s high risk areas, or devoting more supervisory efforts toward banks that have a high risk profile, which enables the regulator to focus more attention on banks whose failure could precipitate systemic crisis.

The NDIC CEO gave an insight on the rationale behind the RBS training programme. He said that the shift from transaction and compliance based supervisory approach to risk based supervision posed a lot of challenges to the supervisory authorities, the biggest of which is capacity building.

He pointed out that NDIC examiners and analysts who are directly involved in the supervision of banks and other financial institutions require adequate training on the new supervisory approach.

“We need to be ahead of the operators to be able to understand what they are doing and the nature as well as the quantum of risk they harbor and the necessary risk mitigants they put in place. This training and indeed the intervention of OTA in this area is part of the giant strides taken by the Corporation to strengthen the supervisory capabilities of our examiners and analysts.”

The training programme was designed by the OTA Technical Adviser on risk-based supervision, Mr. B. C. Hamilton and NDIC’s Director of Bank Examination, Mr. Olarenwaju Sulaimon and was broken into five key areas: Sensitivity to Interest Rate Risk, Risk Management, Operational and Market Risk, Anti Money Laundering (AML) with emphasis on AML International Transactions relationships and Owned Real Estate.


spot_img
spot_img

Hot this week

SEC: Why We Granted “No Objection” to First Holdco Transaction

The Securities and Exchange Commission (SEC) Nigeria wishes to...

Capital Market to Unlock $500bn Assets via Commodities Exchanges, Warehouses

The Director General, Securities and Exchange Commission (SEC), Dr....

SEC Disowns AGM of Tourist Company of Nigeria, Reaffirms Regulatory Oversight

The Securities and Exchange Commission (SEC) has disowned the...

NCDMB Leads Push for Homegrown Talents at Chevron-funded HCD Graduation

The Nigerian Content Development and Monitoring Board has reaffirmed...

Linkage Assurance Reports 50% Revenue Growth in 2024

L-R: Funkazi Koroye-Crooks, Non-Executive Director; Moses Omoregbe, Company Secretary;...

Topics

P+ Measurement Services Wins 6 Awards in 2022…LaPRIGA, Brandcom, Others

P+ Measurement Services, Nigeria’s leading Independent Public Relations measurement...

Mutual Benefits Assurance Celebrates 24th Thanksgiving Service

Mutual Benefits Assurance Plc last weekend celebrated its 24th...

Ecobank Nigeria Encourages Customers to Obey COVID-19 Rules

  Ecobank Nigeria has encouraged its customers to obey the...

NCC Initiates Regulatory Measure to Identify, Eliminate Risks in Telecom Sector

The Nigerian Communications Commission (NCC) has embarked on a...

Indian Achieves 1OOm Mobile Phone Manufacturing Capacity

The manufacturing capacity of mobile phone factories in India...

Nigeria: 2018 GDP Forecast Climbs to 2.6%

The National Bureau of Statistics (NBS) released Q4:2017 Gross...

NCDMB Holds Retreat with Senate Committee on Local Content, Seeks Close Collaboration

Cross-section of NCDMB management and members of the Senate...
spot_img

Related Articles

Popular Categories

spot_imgspot_img