Commercial banks’ emerging risks resilience appears to be receding, CBN warns
In view of incessant cyber attacks in commercial banks which had remained largely unreported in the last few years, the Central Bank of Nigeria (CBN) has warned financial institutions to be wary of emerging risks in the financial system.
According to the apex bank, financial sector’s cyber risks resilience appears to be receding.
In a statement issued by the CBN’s Deputy Governor, Corporate Service Department of the bank, Mr. Edward Adamu, at the September 2018 Monetary Policy Committee (MPC) meeting obtained, the bank warned that risks associated with the surge in financial technology adoption in banks are very dangerous and should be guard against.
Adamu recalled that the rising non-performing loans (NPLs) ratio in the sector, which he said was driven essentially by oil sector exposures and forex crisis are yet to be adequately resolved. “Equally of concern to Adamu was the decline in capital market indices. The ongoing interest rate normalisation in some advanced economies, which has resulted to reversal of capital flows, has been a concern to policy makers in Nigeria.
“There is no gain saying that monetary policy cannot mitigate all of the current risks to economic stability. However, it remains the proximate tool for achieving price stability.
“The deceleration in inflation and stability in the naira exchange rate in over a year have been mainly as a result of the tight monetary policy stance.
CBN further averred that “This is why the urge to further tighten the policy stance given the extant risks to price stability continues to be strong.”
Analysts who weighed the enormity of the apex bank’s warning, said there are still big issues in the banking sector as more banks are under the stress of capital adequacy ratio, a strategic pointer to emergence of distress in the industry.
