The upper legislative chamber Senate has set machinery in motion for amendment of the Central Bank of Nigeria, (CBN) Act, 2007, which will among others, make tenureship of Governor of the apex bank to six years single term as against renewable five years in the extant act.
It also proposed N1trillion recapitalization for commercial banks which presently stands at N100billion.
As Senate moves for sweeping reforms in the organisation, administration and function of CBN through an amendment bill read for second reading in plenary on Tuesday, its Committee on Banking, Insurance and other Financial Institutions, screened nominees for Board of Directors of the bank.
Proposal for six year single term for CBN Governor, Deputy Governors and members of Board of Directors, was contained in a bill seeking for amendment of CBN Act, 2007 and sponsored by Senator Adetokunbo Abiru (APC Lagos East) in his capacity as chairman, Senate Committee on Banking, Insurance and other Financial Institutions
Senator Abiru, in his lead debate on the bill co-sponsored by 41 other members of the committee, said six years single term for CBN Governor, Deputy Governors and Board of Directors, is geared towards reducing political influence on them.
“This is the practice adopted by many independent banks such as the US Federal Reserve and the European Central Bank, where their Chief Executive Officers serve only one non-renewable term.
“Empirical evidence shows that a single term for the members of the Executive and Board members of central banks helps to reduce political influence on monetary policy decisions and the time inconsistency problem associated with non-independent central banks,” he said.
On the N1 trillion recapitalization, Abiru said the proposal seeks to provide that the paid-up capital of the bank shall be N1 trillion and may be increased from time to time by such amount as the Government may approve, either by way of transfers from the General Reserve Fund or by such other means as the government, in consultation with the board, may approve.
The bill, also seeks for creation of Coordinating Committee for Monetary and Fiscal Policies since the extant act made no provision for such.
He said: “The current Act made no provision for coordination of monetary and fiscal policies which is the reason that monetary policies of the bank often diverge from fiscal policies to the detriment of the economy.
Members of Board of CBN Directors screened on Tuesday were Mr. Robert Agbede, Mr. Ado Yakubu Wanka and Mrs. Muslimat Olanike Aliyu.
Senate Mulls Six-Year Tenure For CBN Gov
