Safiu Kehinde
Former CBN Deputy Governor, Professor Kingsley Moghalu, has expressed his displeasure over the influence on the Central Bank’s decisions by what he ccalled “external forces.”
Speaking in an interview on Politics Today aired by Channels Television, Moghalu noted that the apex bank has to be independent in its regulatory exercise, stressing that the interference by external forces into its decision is a “little bit odd”.
Reacting to the recent suspension of the Board of Directors of three commercial banks by the CBN, Moghalu said the apex has the resources and authority to investigate any deposit money bank and take necessary decisions in situation where there is an infraction.
“What I find a bit odd is the context in which this is happening because you will have to understand that the Central Bank has to be independent. It has to be professional and the bank has the resources and authority to be able to investigate any deposit money bank in Nigeria and find out if there are infractions. And if so, take the necessary decisions.
“But this now seems to be happening from an external stimulus and that’s what is a bit odd about it.
“That the Central Bank is now in a position where it will appear that its regulatory decision are being dictated by some outside influence, force, or entity.” He said.
Meanwhile, the Former CBN Deputy Governor explained the reason behind the apex bank’s decision and why banks are heavily regulated.
“Of course the CBN has the power to do that if it judges that the banks in question are not being well known, or they are threat to financial stability, or they are not meeting the conditions of the banking license granted to them.
“As you know, the banking sector, all over the world, is about the most regulated business sector on the planet. And that’s because banks thread and thrive on other people’s money.
“80 to 90 percent of the money which banks do business with is the depositors’ funds.
Only very little is shareholders’ funds. So it’s a very different model of business because it sort of depends on the consumer who put his money in the bank in trust that he or she will find them when they go there. That’s why banks are heavily regulated.” He said.