CBN Governor, Olayemi Cardoso

 The Central Bank of Nigeria (CBN) has issued draft guidelines that would impose stricter controls on transactions between banks, financial institutions and their affiliated entities as part of efforts to protect depositors’ funds, strengthen consumer protection and reduce risks within the financial system. The proposed ‘Guidelines on Ring-Fencing Operations of Closely Linked Entities in the Nigerian Financial System’ seek to establish clear operational and functional boundaries among entities under the same corporate group and prevent the commingling of activities across different licence categories. In a circular signed by the Director of the Financial Policy and Regulation Department, Dr Rita Sike, the apex bank said the framework was developed to promote a safe, sound and stable financial system, safeguard consumer interests and strengthen regulatory oversight. According to the CBN, the guidelines prescribe requirements relating to governance, intra-group transactions, segregation of customer funds and data, operational independence, recovery and resolution planning, and consolidated supervision. “The guidelines are intended to strengthen consumer protection, enhance transparency and accountability, mitigate contagion risks among closely linked entities, and preserve financial stability while supporting innovation and fair competition within the financial services sector,” the bank stated.

Guardian