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Financial Intermediaries: Depositors' Confidence

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Financial Intermediaries: Depositors' Confidence

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Questions and Answers

What is a core responsibility of the Central Bank of Nigeria?

Enforcing drug and law enforcement regulations

Issuing legal tender currency notes and coins (correct)

Regulating the stock market

Conducting routine audits of licensed banks

Which organization is responsible for insuring all deposit liabilities of licensed banks in Nigeria?

Economic & Financial Crimes Commission (EFCC)

Securities & Exchange Commission (SEC)

National Drug & Law Enforcement Agency (NDLEA)

Nigerian Deposit Insurance Corporation (NDIC) (correct)

What is one of the reasons for the regulation of the Financial Services Industry?

Maintaining stability in the economy (correct)

Allowing unrestricted money supply growth

Encouraging risky investments

Promoting unhealthy competition in the financial markets

What does the Nigerian Deposit Insurance Corporation (NDIC) aim to do in case of imminent or actual financial difficulties of banks?

Guarantee payments to depositors (C) Signup and view all the answers

What is one of the responsibilities of every Central Bank, including the Central Bank of Nigeria?

Safeguarding the international value of the legal tender currency (C) Signup and view all the answers

Why is it important for financial intermediaries to maintain depositors' confidence?

To prevent loan repayment defaults (B) Signup and view all the answers

What is the main purpose of the Nigeria Deposit Insurance Corporation (NDIC)?

To protect depositors' interests (A) Signup and view all the answers

Why do banks need to be regulated?

To ensure prudent management and avoid overextension (B) Signup and view all the answers

What is the primary role of the government in enhancing confidence in the banking industry?

Establishing a deposit protection scheme (B) Signup and view all the answers

Why are all activities of banks regulated?

To ensure proper management and avoid overextension (C) Signup and view all the answers

What is one of the main reasons for government regulations subjecting banks to certain requirements, restrictions, and guidelines?

To uphold the soundness and integrity of the financial system (C) Signup and view all the answers

What is the primary responsibility of the Nigerian Deposit Insurance Corporation (NDIC)?

Guaranteeing payments to depositors in case of imminent or actual suspension of payments (B) Signup and view all the answers

What is one of the core responsibilities of a Central Bank, such as the Central Bank of Nigeria?

Safeguarding the international value of the legal tender currency (D) Signup and view all the answers

In case of imminent or actual financial difficulties of banks, what does the Nigerian Deposit Insurance Corporation (NDIC) aim to do?

Engender confidence in the Nigerian banking system (A) Signup and view all the answers

What are some responsibilities of Central Banks with regard to supervising and regulating banks and other Financial Institutions?

Promoting an efficient Clearing and Payment system (D) Signup and view all the answers