NDIC, CBN train staff on risk based supervision of banks

Insurance Corporation and Central Bank collaborate on training staff in risk management and supervision.

The Nigeria Deposit Insurance Corporation, NDIC, is organising a programme to train its examiners on risk-based supervisions , RBS. This is to enable them understand the risk profile of banks and the various risk management models they deploy.

The programme is a joint capacity building initiative in collaboration with the Central Bank of Nigeria, CBN, on the supervisory framework that is adopted by both the NDIC and the CBN.

It also involves critical areas such as overview of risk management, understanding the framework for risk-based supervision, and risk mitigation techniques.

The NDIC had recently concluded the third leg of the RBS for 54 participants, out of which five were from the CBN. Others were from the Bank Examination Department, BED, Special Insured Institutions Department, SIID, and Zonal Offices of the Corporation.

The fourth leg of the RBS training programme will hold early next year in Abuja for CBN and NDIC examiners in the Head Office and Zonal Offices.

The first leg of the training was organised for fifty-four participants in Ogun State, out of which forty-four were NDIC examiners and 10 from the CBN. Sixty-four NDIC Examiners took part in the second leg.

While declaring the 12th annual national conference of Risk Managers Association of Nigeria open in Lagos, the Managing Director of NDIC, Umaru Ibrahim, underscored the rationale behind the RBS for banks.

The theme of the training programme is “Financial Sector Stability and Macro-Prudential Risk Regulation: Way Forward for Emerging and Developing Economies.”

According to Mr. Ibrahim, the NDIC’s collaboration with the Central Bank in implementing risk-based supervision of banks would enable them to effectively evaluate risks inherent in banks’ activities and risk management functions.

The NDIC boss, who was represented at the Conference by the Director, Asset Management Department of the Corporation, Adedapo Adeleke, also told the gathering of risk managers that the various boards of insured institutions were expected to establish an enterprise risk management system with clearly defined risk decisions that would be consistent with the established thresholds.

He charged the insured institutions to complement their risk management strategies by consistently assessing whether they were deploying their capital relative to their risk exposures and matching their assets with liabilities to avert liquidity crisis.

Mr. Ibrahim also stressed that the banks should enthrone self-regulation by remaining ethical in their business dealings and ‘stress-testing’ their capital positions to complement statutory regulations.