Rising Bank Risks: CBN’s Rule May Hit CROs, Auditors, Others

[TGD]

 INDICATIONS have emerged that there may be a major shake-up in the top management level of banks, as the Central Bank of Nigeria (CBN) plans an assessment of offices and qualifications based on the previously issued guidelines.

The banking heads to be assessed include chief risk officers (CROs), chief financial officers, treasurers and internal auditors.

Governor of CBN, Mallam Sanusi Lamido Sanusi, made the disclosure in Lagos, at the first National Risk Management conference.

He said the move is not a hard regulation even though he is not against such and that it in the overall interest of the industry.

"In everything we do, whether as chief executive, risk mangers or managers of the economy, risk management is critical. Some of our workers were in the Federal Reserve for a training recently and were informed that Fed receives about one million cyber shields an hour. But here we don't have it as much and the whole issue of cyber security is critical.

"We have seen how a small group of people stole millions of dollars from banks overnight in Europe, America and the Middle East. So, these are real risks that we face," he said.

Sanusi noted that there is not enough feasibility and experience in managing these risks to broaden the institutions that the apex bank regulates and controls, especially with the move to electronic banking- channels, Point of Sales, Internet banking and mobile banking.

"I urge the chief executives to invest a lot in capacity building and risk management. We are going to start sending questionnaires to banks in the next few weeks, with regards to guidelines on approved offices and qualifications, that is, competency test.

 

"The questionnaire will basically assess where we are and benchmark it with where we want to be. Out of the 21 CROs that we have in the industry, how many have met those competency requirements? What about the Treasurers, chief financial officers and internal auditors?

"These questionnaires are not rightly going to tell banks to sack its CROs and others, but where necessary, a request to hire someone else if the gap is too wide, and engage the bank on what kind of training needs to be done.

"This is risk management and it might rebound on us. If we do not have the right people managing risks at institutional, we cannot manage risks at systemic level. We must face it now because it has overall interest of banks and the country," he said.



The Guardian