Podcast
Questions and Answers
What year was the National Insurance Commission established?
What year was the National Insurance Commission established?
- 1992
- 1990
- 1987
- 1997 (correct)
Which body took over the supervision of insurance in Nigeria before the National Insurance Commission?
Which body took over the supervision of insurance in Nigeria before the National Insurance Commission?
- Federal Ministry of Finance
- National Insurance Supervisory Board (correct)
- Central Bank of Nigeria
- Insurance Premium Bureau
What is one of the functions of the National Insurance Commission?
What is one of the functions of the National Insurance Commission?
- Connecting insurance companies with foreign investors
- Supervising government insurance schemes
- Issuing loans to insurance companies
- Setting standards for the conduct of insurance business (correct)
Which institution collaborates with the National Insurance Commission?
Which institution collaborates with the National Insurance Commission?
When was the Federal Mortgage Bank of Nigeria established?
When was the Federal Mortgage Bank of Nigeria established?
What is a major issue that the Federal Mortgage Bank of Nigeria aims to tackle?
What is a major issue that the Federal Mortgage Bank of Nigeria aims to tackle?
What major problem is currently affecting the insurance industry as mentioned?
What major problem is currently affecting the insurance industry as mentioned?
Which of the following is NOT a function of the Nigerian Insurance Commission?
Which of the following is NOT a function of the Nigerian Insurance Commission?
What is one of the primary functions of the NDIC?
What is one of the primary functions of the NDIC?
Which ministry advises the government on monetary and fiscal operations?
Which ministry advises the government on monetary and fiscal operations?
What regulatory body replaced the Capital Issues Commission in Nigeria?
What regulatory body replaced the Capital Issues Commission in Nigeria?
Which of the following functions is NOT performed by the NDIC?
Which of the following functions is NOT performed by the NDIC?
Which body is responsible for licensing bureau de change in Nigeria?
Which body is responsible for licensing bureau de change in Nigeria?
What year was the Securities and Exchange Commission established?
What year was the Securities and Exchange Commission established?
Which body was primarily responsible for licensing banks before 1991?
Which body was primarily responsible for licensing banks before 1991?
Which of the following is a function of the Securities and Exchange Commission?
Which of the following is a function of the Securities and Exchange Commission?
What is one of the primary roles of a Central Bank in the financial system?
What is one of the primary roles of a Central Bank in the financial system?
Which financial institutions are controlled by the Central Bank?
Which financial institutions are controlled by the Central Bank?
What is a likely outcome of effective regulatory measures in financial institutions?
What is a likely outcome of effective regulatory measures in financial institutions?
What is the principal function of the Central Bank of Nigeria?
What is the principal function of the Central Bank of Nigeria?
What is the essence of controls in financial institutions?
What is the essence of controls in financial institutions?
How does the Central Bank aid the government regarding monetary policies?
How does the Central Bank aid the government regarding monetary policies?
Which of the following is NOT a method used by the Central Bank of Nigeria to control credit in the economy?
Which of the following is NOT a method used by the Central Bank of Nigeria to control credit in the economy?
What is one of the responsibilities of the Nigerian Deposit Insurance Corporation (NDIC)?
What is one of the responsibilities of the Nigerian Deposit Insurance Corporation (NDIC)?
What does the Nigerian Deposit Insurance Corporation primarily complement?
What does the Nigerian Deposit Insurance Corporation primarily complement?
Which of the following is a responsibility of the Central Bank of Nigeria?
Which of the following is a responsibility of the Central Bank of Nigeria?
What is a role of the Federal Ministry of Finance in the financial system?
What is a role of the Federal Ministry of Finance in the financial system?
Which one of the following is not a key function of the NDIC?
Which one of the following is not a key function of the NDIC?
Why are various institutions created by the Government within the Nigerian Financial System?
Why are various institutions created by the Government within the Nigerian Financial System?
What role does the Central Bank of Nigeria play as a lender of last resort?
What role does the Central Bank of Nigeria play as a lender of last resort?
Which of these is a tool used by the Central Bank of Nigeria to ensure monetary policy effectiveness?
Which of these is a tool used by the Central Bank of Nigeria to ensure monetary policy effectiveness?
What is the primary goal of the Central Bank of Nigeria?
What is the primary goal of the Central Bank of Nigeria?
What was the original institution that the new body took over?
What was the original institution that the new body took over?
What significant role did the regulatory and supervisory aspect of the institution gain prominence?
What significant role did the regulatory and supervisory aspect of the institution gain prominence?
What decree gave the Federal Mortgage Bank of Nigeria more powers?
What decree gave the Federal Mortgage Bank of Nigeria more powers?
Which function was transferred to the new institution known as Federal Mortgage Finance Limited?
Which function was transferred to the new institution known as Federal Mortgage Finance Limited?
What is one of the key functions of the Federal Mortgage Bank of Nigeria?
What is one of the key functions of the Federal Mortgage Bank of Nigeria?
Who collaborates with the Federal Mortgage Bank of Nigeria in its supervisory roles?
Who collaborates with the Federal Mortgage Bank of Nigeria in its supervisory roles?
What is one of the functions of the Board of the Federal Mortgage Bank of Nigeria?
What is one of the functions of the Board of the Federal Mortgage Bank of Nigeria?
When was the National Housing Policy adopted by the government?
When was the National Housing Policy adopted by the government?
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Study Notes
Introduction
- Regulatory institutions are established by the Federal Government to maintain standards and ensure a well-functioning financial system.
- These institutions oversee the activities of operators within the financial system to prevent excesses.
Central Bank of Nigeria (CBN)
- CBN acts as the principal regulator and supervisor of Nigerian financial institutions, standing at the apex of the banking system.
- Responsible for licensing, supervising banks, and controlling credit through:
- Open Market Operations
- The Bank Rate
- Moral Suasion
- Special Directives
- Promotes a sound financial structure and provides services such as:
- Bankers’ Clearance
- Examination of banks
- Foreign Exchange Monitoring
- Prudential Guidelines
- Lender of Last Resort functions
- Reserve Requirements and Cash Reserve Requirement
- Interest Rate Policy and Capital Funds Adequacy
Nigerian Deposit Insurance Corporation (NDIC)
- Established by Decree No. 27 in June 1988 to complement CBN's efforts.
- Functions include:
- Providing deposit insurance for banks
- Examining books and affairs of insured banks
- Identifying and restructuring distressed banks
- Resolving issues affecting the financial system
- Collaborates closely with the CBN to ensure the health of banking operations.
Federal Ministry of Finance
- Acts as the government's agent in the financial system with responsibilities like:
- Advising on monetary and fiscal operations in consultation with CBN.
- Preparing the Federal Government Budget.
- Licensing bureau de change; previously licensed banks until 1991, when CBN took over.
- Executing financial directives from the Presidency.
Securities and Exchange Commission (SEC)
- Established in 1979 to regulate capital market operations, succeeding the Capital Issues Commission.
- Key functions include:
- Promoting an orderly and active capital market
- Determining timing and amount of privately offered securities
- Registering and supervising stock exchanges and related bodies
- Approving companies for capital market listing
- Regulating mergers and acquisitions per the Companies and Allied Matters Decree of 1990
- Issuing guidelines on foreign investments and maintaining market surveillance.
National Insurance Commission (NIC)
- Established in 1997 to supervise insurance business in Nigeria, taking over from the National Insurance Supervisory Board.
- Functions include:
- Regulating insurance business standards
- Establishing a bureau for public complaints against insurance companies
- Approving insurance premium rates for various classes of insurance
- Expected to help resolve distress in the insurance industry.
Federal Mortgage Bank of Nigeria
- Established by Decree No. 7 in 1997 to address housing issues in Nigeria.
- Took over the functions of the Nigerian Building Society, aiming to act as the apex mortgage institution.
- Functions include:
- Licensing and supervising primary mortgage institutions
- Managing the National Housing Fund
- Advising other mortgage finance institutions
- Conducting research to improve housing standards.
Microfinance Banks
- Functions include receiving and processing applications for establishing microfinance banks.
- Supervise and control activities of microfinance banks and provide long-term financing.
Conclusion
- The Central Bank serves as the government’s representative in the financial system, closely associated with both the government and the financial sector.
- Effective regulatory measures help in early identification of potential problems in financial institutions, aiding in prevention of failures.
Summary
- Comprehensive focus on the control of financial institutions is crucial for enhancing efficiency and effectiveness within the financial system.
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