NDIC Runs Risk-Based Supervision Course

By Ewache Ajefu/Editor

THE Nigeria Deposit Insurance Corporation (NDIC) is organizing risk-based supervision (RBS) training programme for its examiners, to enable them understand and examine the risk profile of banks and the various risk management models being deployed by the banks.

Being a joint capacity building programme with the Central Bank of Nigeria (CBN), the RBS training is based on a supervisory framework that is adopted by both the NDIC and the CBN.
The course  also involves critical areas, such as overview of risk management, understanding the framework for risk-based supervision and risk mitigation techniques.

The NDIC had recently concluded the third leg of the RBS for 54 participants, out of which five (5) were from the CBN and 49 from Bank Examination Department (BED), Special Insured Institutions Department (SIID) and Zonal Offices of the Corporation.

The training was held  this year at Golden Tulip Hotel, Lagos. The fourth leg of the RBS training programme is to be held early next year in Abuja for the CBN and NDIC examiners in the Head Office and Zonal Offices.

It would be recalled that the first run of the training programme was organized by the Corporation from June 6 – 15, 2010 at Conference Hotel, Ijebu-Ode, Ogun State for 54 participants out of which 44 were NDIC examiners and 10 from the CBN. The second run of the training programme was held from November 22 – December 3, 2010 at the same venue for 64 participants, all who were NDIC examiners.

In a recent development, the Managing Director/Chief Executive, NDIC, Alhaji Umaru Ibrahim underscored the rationale behind the RBS for banks while declaring open the 12th annual national conference of Risk Managers Association of Nigeria in Lagos with the theme: “Financial Sector Stability and Macro-Prudential Risk Regulation: Way Forward for Emerging and Developing Economies”. Alhaji Ibrahim said that the NDIC was collaborating with the CBN in implementing risk based supervision (RBS) of banks, to enable them effectively evaluate risks inherent in activities and risk management functions of banks.

The NDIC CEO who was represented at the Conference by the Director, Asset Management Department of the Corporation, Mr. Adedapo Adeleke also told the gathering of risk managers that the various Boards of insured institutions were expected to establish an enterprise risk management (ERM) system with clearly defined risk decisions that would be consistent with the established thresholds.

He charged the insured institutions to complement their risk management strategies by consistently assessing whether they were deploying their capital relative to their risk exposures and matching their assets with liabilities to avert liquidity crisis, stressing that the banks should always enthrone self regulation by remaining ethical in their business dealings and stress-testing their capital positions to complement statutory regulations.