The Bank Directors Association of Nigeria (BDAN) has expressed its support for the recent directive issued by the Central Bank of Nigeria (CBN), urging commercial banks to cease “hoarding” foreign currencies amid growing concerns over escalating foreign currency exposure.
In response to the CBN’s circular titled ‘Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,’ BDAN affirmed its full awareness and endorsement of the regulatory measures aimed at bolstering the stability and resilience of Nigeria’s financial system.
Mustafa Chike-Obi, Chairman of the Board of Directors of BDAN, emphasized the association’s unwavering support for the comprehensive measures outlined by the CBN, which underscore the regulator’s commitment to safeguarding the banking sector.
The directive, which mandates banks to divest excess dollar stocks to customers, has already seen a significant increase in dollar supply by 180 per cent to $440 million at the official foreign exchange market (NAFEM).
BDAN hailed the directive as a critical step in effective risk management and transparency within the financial industry, highlighting its role in mitigating potential losses that could pose systemic challenges.
Furthermore, the association commended the CBN for its proactive regulatory stance and meticulous consultation with stakeholders to ensure a balanced and effective approach.
In alignment with the CBN’s initiatives, BDAN encouraged all banks to fully comply with the new directives and actively engage in the implementation process to achieve full regulatory compliance.
Emphasizing their commitment to responsible banking and ethical conduct, BDAN reiterated its belief that the regulatory guidelines would significantly enhance the long-term sustainability and growth of the banking sector, thereby contributing to Nigeria’s overall economic development.
In concluding remarks, BDAN pledged continuous collaboration with the CBN and other stakeholders to foster a dynamic and resilient financial ecosystem that serves the interests of all Nigerians. The association affirmed its belief that the regulatory steps undertaken by the CBN represent a positive direction towards improving the effectiveness and stability of the banking system.