The Central Bank of Nigeria (CBN) said it has implemented ‘Early Warning Systems’ to detect bank failures.
The development is coming following Heritage Bank liquidation while distressed Unity Bank got the approval of the CBN to combine with Providus Bank.
Recently, there have been doubts and arguments among stakeholders over the Nigerian banking system and the allegations of manipulation of their financial statements to declare mega profits.
But the apex bank said in a statement on Tuesday that it is committed to Financial System Stability and safety of depositors’ funds.
The CBN in the statement “Reassures the public of its unwavering commitment to ensuring the stability and reliability of the Nigerian financial system.
“The CBN recognises the crucial role that confidence plays in banking operations and wants to affirm that all deposits in Nigerian banks are secure.
“The CBN actively ensures that banks adhere to established regulations and best practices to maintain the integrity of our financial system. Regular stress testing is conducted to identify potential vulnerabilities, helping to ensure that our financial institutions are resilient.”
The apex bank revealed that it has implemented a system that allows it to detect risks among banks and the overall financial system.
“The CBN has implemented Early Warning Systems that proactively detect and address emerging risks, allowing us to provide timely solutions to any foreseen issues.
“The Bank’s approach to Risk-Based Supervision ensures that it focuses its regulatory efforts on institutions that may pose the highest risk to the financial system.
“This targeted strategy allows it to maintain a robust oversight mechanism while promoting the overall health of the banking sector.”
The apex bank also said it has established Memoranda of Understanding with the various countries where Nigerian banks’ subsidiaries are located.
The central bank believes the collaboration would enhance regulatory coordination and ensure that Nigerian banks operate within a safe and sound framework in accordance with banking regulations, both domestically and internationally.
It added, “The CBN remains dedicated to fostering a secure banking environment where depositors can be fully confident in the safety of their funds.
“It will continue to monitor and adapt strategies to safeguard the financial interests of all Nigerians and stakeholders in our financial system.”