CBN Gives Banks Deadline on International Standard

Central Bank of Nigeria (CBN) yesterday said it had given banks till December 2010, to adopt the International Financial Reporting Standard (IFRS) in their accounting system.

The CBN Governor, Mallam Sanusi Lamido Sanusi, said this in a paper entitled, “The Nigerian Banking Sector Reform: Effects on Investment Promotion,” presented at the fourth Negotiation and Conflict Management Group (NCMG) African Summit held in Lagos.

Represented by a Deputy Governor, Mr. Tunde Lemo, Sanusi said the present accounting system of most banks was such that a lot of things are hidden, which analysts will not be able to see.

According to him, adoption of the IFRS and International Standard on Auditing (IAS) would satisfy international benchmark for financial system transparency and boost confidence of foreign investors in the country.

“The enhanced disclosure regime will further reinforce confidence of investors in our banking system. It will aid their evaluation of our financial system’s capacity to efficiently allocate capital, redistribute risks, mobilise savings and promote domestic SMEs investment, which may serve as suppliers to their industrial investments," he said.

Lamido said investors are encouraged when they are assured of ability of the system to adequately deal with corporate malfeasance.

He said CBN is currently addressing the issue of transparency and disclosure, adding that people of questionable character, no matter how rich, would no longer be in control of banks.

He said, “even if you have all the money in the world, even if you are the richest man in Babylon and you do not have integrity and character, you will not be allowed to control any bank in Nigeria.

In addition, Sanusi said the CBN will ensure maintenance of public confidence through enforcement of appropriate disclosure and reinvigorate the policy of zero tolerance on all unprofessional and unethical banking practice.