Banking Performance. Why efficiency matters for bank operations. As with any business, banks must be vigilant about spending wisely. Today, however, the banking industry faces a new combination of circumstances that are giving special impetus to the need for efficiency.
Changes in customer preferences and expectations, new competition, and new technologies are transforming the nature of banking. The business of banking is morphing toward a digital- and technology-based model while retaining important aspects of the traditional person-to-person business model. To remain competitive, banks need to invest in technology, marketing, automation, and self-service capabilities, and also must optimize their legacy investments in branches and traditional systems.
All of these changes are occurring in an industry environment that is experiencing narrowing margins, slow deposit growth, and the potential of an economic downturn.
Becoming more efficient in everything they do is an important strategic objective for banks, and most banks already put forth significant effort to improve their costs after the last recession.
Setting operating targets for improvement. Six strategies for improving efficiencies of banking operations. Banking regulation in Nigeria: overview. Related Content. This Banking Regulation guide provides a high level overview of the governance and supervision of banks, including legislation, regulatory bodies and the role of international standards, licensing, the rules on liquidity, foreign investment requirements, liquidation regimes and recent trends in the regulation of banks.
Legislation and regulatory authorities Legislation. What is the legal framework for banking regulation? Nigerian Deposit Insurance Corporation Act, which is responsible for insuring all deposit liabilities of licensed banks. Foreign Exchange Monitoring and Miscellaneous Provisions Act, which established the Autonomous Foreign Exchange Market and provides the regulatory framework for foreign exchange transactions in Nigeria.
Regulatory authorities. What are the regulatory authorities for banking regulation in your jurisdiction? What is the role of the central bank in banking regulation? Ensure monetary and price stability. Maintain external reserves to safeguard the international value of the currency. Act as banker and provide economic and financial advice to the Federal Government. The CBN regularly issues circulars and guidelines in line with its oversight responsibilities over banks, other financial institutions and the foreign exchange market.
The CBN also has the powers to intervene when as a result of its various examinations and supervisory powers it considers that a bank is failing by directing that the management and control of the bank should be turned over to the Nigerian Deposit Insurance Corporation NDIC see Question Other authorities The Monetary Policy Committee. The role of the MPC is to facilitate price stability and to support the economic policy of the Federal Government.
The MPC is responsible for formulating monetary and credit policy for the Nigerian financial system. The Nigerian Deposit Insurance Corporation. The Nigerian Deposit Insurance Corporation NDIC is responsible for insuring all deposit liabilities of licensed banks and other deposit taking financial institutions operating in Nigeria and assisting monetary authorities in formulating and implementing banking policy to ensure sound banking practice and fair competition among financial institutions.
Central bank See above, Lead banking regulators. Under the Companies and Allied Matters Act, the Corporate Affairs Commission has regulatory powers over all registered companies in Nigeria including banks and other financial institutions particularly in respect of certain statutory filings required by them. The Financial Reporting Council of Nigeria. The Financial Reporting Council of Nigeria FRCN was established under the Financial Reporting Council of Nigeria Act and has the powers to enforce compliance with accounting, auditing, corporate governance and financial reporting standards.
The FRCN also develops and publishes accounting and financial reporting standards for the preparation of financial statements of public interest entities, which includes banks and other financial institutions see Question 6. Financial Services Regulations Co-ordinating Committee. The Financial Services Regulations Co-ordinating Committee was established by the CBN Act to co-ordinate the supervision of financial institutions and to articulate the strategies for the promotion of safe, sound and efficient practices by financial intermediaries.
The Governor of the CBN, who chairs the committee. A representative of the Federal Ministry of Finance not below the rank of a Director. The role of auditors internal and external include financial checks, operational accounting, evaluation and reviewing of the system of internal control of the banks to ensure they are in line with the applicable standards set by the CBN and other regulatory authorities.
Bank licences 3. What licence s are required to conduct banking services and what activities do they cover? No person is permitted to carry out any banking business unless it is a company duly incorporated in Nigeria and holds a valid banking licence issued under the Banks and Other Financial Institutions Act BOFIA. A banking licence is issued by the Central Bank of Nigeria CBN and authorises a company duly incorporated in Nigeria to carry on banking business in the country.
A banking licence can be a commercial banking licence, merchant banking licence or a specialised banking licence, as follows:. Commercial banking licence. This licenses commercial banking operations on a national, regional or international basis and authorises banks to paragraph 3, CBN Scope, Conditions and Minimum Standards for Commercial Banks Regulations No 01, :. Merchant banking licence. This licence allows financial institutions to provide specialist services such as wholesale banking or investment banking services as set out in guidelines made under the CBN Scope, Conditions and Minimum Standards for Merchant Banks Regulations No.
Activities permitted by a merchant banking licence include:. Specialised banking licence. Specialised banks include non-interest banks, microfinance banks, development banks, mortgage banks and any other banks designated by the CBN.
Foreign Exchange Authorised Dealership Licence. Act among others and CBN Regulations made under it. Certificate of Registration as a Capital Market Operator. This is issued by the Securities and Exchange Commission SEC and permits the holder to operate in the Nigerian capital market and carry on investments and securities business in Nigeria. However, a bank licensed as a commercial bank cannot be registered as a capital market operator, while a merchant bank can be so registered.
What is the application process for bank licences? Application The process for applying for banking licence is in two phases, namely:. Applying for the grant of approval in principle. Applying for the grant for a final banking licence. Grant of approval in principle : An application for banking licence should be addressed to the Director of Banking Supervision Department at the Central Bank of Nigeria CBN and submitted with the following:.
Non-refundable application fee of NGN, Deposit of the applicable minimum capital with CBN, with evidence of deposit by each shareholder. Feasibility report of the proposed bank including the ownership structure of the proposed investors and percentage of their proposed shareholdings, the objectives of the proposed banks, services to be rendered, the branch expansion programme and a five-year financial projection. List of shareholders, directors and principal officers of the proposed bank and their particulars.
However, close to one-third of adults — 1. About half of unbanked people include women poor households in rural areas or out of the workforce. The gender gap in account ownership remains stuck at 9 percentage points in developing countries, hindering women from being able to effectively control their financial lives.
Countries with high mobile money account ownership have less gender inequality. Since , more than 55 countries have made commitments to financial inclusion, and more than 60 have either launched or are developing a national strategy.
When countries take a strategic approach and develop national financial inclusion strategies which bring together financial regulators, telecommunications, competition and education ministries, our research indicates that when countries institute a national financial inclusion strategy, they increase the pace and impact of reforms.
The World Bank Group plays a critical role in advancing financial inclusion in the world since it can leverage its financial sector expertise, country engagement and dialogue, financing and risk-sharing instruments, unique datasets and research capacity, and influence with standard-setting bodies and the G Universal Financial Access UFA by In , the World Bank Group committed to extending access to financial services to 1 billion adults through the Universal Financial Access initiative, which envisions that adults worldwide will be able to have access to a transaction account to store money, send or receive payments.
As of December , we estimate that our advisory, technical assistance, and financing operations will help reach million new accountholders by toward a 1 billion goal. Track progress toward UFA. We have developed an integrated and unified approach in our work to help countries achieve financial access and responsible financial inclusion, which focuses on 9 intertwined areas:.
National financial inclusion strategies NFIS : offer governments technical assistance to design and implement national or subnational roadmaps and action plans to achieve their financial inclusion objectives. Modernize retail payment systems and government payments: help countries design strategies to promote the use of electronic payments, instead of cash and paper-based instruments. Many countries are successfully digitizing government payments by shifting all government-to-person payments into accounts, which typically lowers costs and increases financial access.
It also leads to significant cost savings in the administration of payment schemes, as well as to reduced leakages related to corruption and fraud. Diversify financial services for individuals: support legal, regulatory and policy reforms, capacity building for supervisors, design of government programs to open up access to a range of financial services, including savings, insurance and credit, so that transaction accounts provide a pathway to full financial inclusion.
Financial consumer protection : work on building legal and regulatory framework for financial consumer protection , disclosure and transparency, including advising on institutional arrangements and redress mechanisms, and building capacity. Financial capability: work with governments to design national financial education strategies NFES , collect data and create surveys to measure the level of financial literacy, capability and awareness, and design and evaluate financial capability programs.
Save to Library Save. Create Alert Alert. Share This Paper. Tables from this paper. There has been a lot of restructuring and reshaping of the role of the banks in the past decade as India too has groomed itself for a more visible presence on the global platform. Stiff competition … Expand. View 1 excerpt, references background. Effect of sales promotion as a tool on customer attention to purchase: A case study of auto maker company.
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