7 Functions of Central Bank of Nigeria brings to your knowledge, the functions of the CBN and its strides in ensuring quality service delivery.
A brief history of the Central Bank of Nigeria
Out of the need for a central and statutory authority for regulating the activities of banks in Nigeria, the Central Bank of Nigeria came into existence.
The Central Bank of Nigeria was established by the CBN Act of 1958 and Operations commenced fully on July 1, 1959. Since then, the Central Bank has lived up to the expectation prior to its establishment.
Functions of the Central Bank of Nigeria
The central bank of Nigeria performs many functions aimed at delivering on its mandates which pivoted its establishment.
Some of the Functions of the Central Bank of Nigeria include:
1. Control and Regulation of financial institutions in Nigeria
It is the responsibility of the central bank of Nigeria to control and regulate the activities of financial institutions in Nigeria, all in a way of ensuring adherence to international standards and codes of practice in the banking industry.
2. Representation of Nigeria at the international Community
Being the National body saddled with the responsibility of regulating the financial institutions in Nigeria, the Central Bank of Nigeria represents Nigeria in meetings with the international community as a matter of national interest. The representation most times is by delegation but is very invaluable to the economic development of the nation.
3. Advising the government on good policymaking in the financial sector
In a bid to contribute a meaningful quota towards boosting the Nation’s economy, the central bank of Nigeria plays a role in advising the federal government on good policies to be adopted as it concerns the financial sector.
This is simply because the Central Bank of Nigeria oversees the financial sector and understands the strides that should be adopted to upgrade the sector. As a matter of fact, the CBN is a great force to be reckoned with in Nation building, economically.
4. Consumer protection
The CBN acts as a shield for the consumers against some unfavorable actions of the banks against the consumers. Issues of serious concerns erupting from transactions of customers with banks are channeled to the CBN which now sits back to ascertain and tender judgment on such as they arise.
5. Formulates and implements financial policy
The Central bank of Nigeria plays a key role in formulating policies and going as far as implementing them. This is a result of the fact that the CBN oversees the functioning of financial institutions in Nigeria.
6. Determining interest rates for banks
The central bank of Nigeria is saddled with the task of outlining interest rates to be used by banks for their transactions.
The CBN does not just outline but goes as far as enforcing them so as to ensure compliance on the part of the banks.
7. Directing the supply of money
The central bank of Nigeria also plays a role in monitoring and supervising the supply of money. It ensures that money is supplied to some other areas for proper investment and development.
In all, the central bank of Nigeria has played a great role in the regulation and control of the activities of the financial institutions in Nigeria and its strides are commendable.