The Senate Tuesday, set machinery in motion for amendment of the Central Bank of Nigeria (CBN) Act 2007, which will among others, make tenure of governor of the apex bank a six year single term as against renewable five years in the extant Act.
The amendment also proposes N1trillion recapitalization for commercial banks which presently stands at N100 billion.
The sweeping reforms in the, administration and function of CBN came through an amendment bill, which passed second reading at plenary on Tuesday from its committee on Banking , Insurance and other Financial Institutions.
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 sponsored by Adetokunbo Abiru (Lagos East) in his capacity as Chairman, Senate Committee on Banking.
Abiru in his lead debate on the bill co-sponsored by 41 other members of the committee, said six year single term for CBN governor, deputy governors and board of directors said it was 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 on monetary policy decisions and the time inconsistency problem associated with non-independent central banks’, he said.
On N1trillion recapitalization, Abiru in the bill said the proposal seeks to provide that the paid-up capital of the Bank shall be 1 Trillion naira 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.
By Haruna Salami
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