The Nigeria Deposit Insurance Corporation (NDIC), yesterday, said the country’s banks remain stable despite a negative rating on Nigeria by global credit rating agency, Moody’s.
Mr. Abdulhameed Aliu, NDIC Deputy Director for Bank Examination, said this at the ongoing workshop for business editors and finance correspondents by the corporation in Yola.
The theme of the workshop is, “Nigerian Banking System Stability: Tackling Emerging Issues”. Moody’s Investors Service (Moody’s), one of the global credit rating agencies, on December 4, changed its outlook on Nigeria’s ratings to negative from stable.
According to it, Nigeria’s weak operating environment posed a challenge to the banking sector in maintaining the recent improving trend, particularly as regards asset quality, given the increasing bank lending.
Aliu said the regulators, which include the NDIC and the Central Bank of Nigeria (CBN), had put in place frameworks that would continuously ensure that the banking industry remains strong. He said the commercial banks’ Capital Adequacy Ratio (CAR) had improved from 10 per cent to 15 per cent, higher than the right per cent threshold. CAR is a measurement of a bank’s available capital expressed as a percentage of its weighted exposures.
The deputy director said the development meant that Nigerian banks were insulated against some level of risks, noting that the regulator had come up with electronic template that monitors excessive charges among banks.
Aliu said, “any bank that charges customers beyond what is approved, we’ll go to these banks. It is just unfortunate that our reports are not public reports but we have a lot of circumstances where customers were refunded for excessive charges.
“We have even gone beyond doing these things manually; we have a template that we send to these banks, they are IT driven. It is a software we developed. Once the bank slots in the variables, the results will come out and there is a red flag. So, anyone that has violated the articles, the system generates it. So, all those customers that are charged exorbitant charges are flagged off.”
According to him, the idea behind the template is to ensure that banks do not overcharge customers.