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CBN issues Code of Corporate Governance to BDCs

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•Bars families from dominating boards

By Elizabeth Adegbesan

THE Central Bank of Nigeria, CBN, in a bid to further strengthen financial institutions and reposition them to perform their statutory roles, has issued a new Code of Corporate Governance for Bureau De Changes (BDCs) in the country.

In a circular to Other Financial Institutions (OFIs), signed by Director Financial Policy and Regulation Department, CBN,  Kevin Amugo, the bank stated: “Pursuant to the provisions of section 33 (1) b of the CBN Act No. 7 of 2007; and sections 57, 61-33 of the Bank and Other Financial Institution Act (BOFIA) of 1991 (as amended), the CBN hereby issues the Code of Corporate Governance in respect of the under-listed  six Other Financial Institutions (OFIs): Micro-finance Banks, Development Finance Banks, Primary Mortgage Banks, Mortgage Refinance Companies, Finance Companies and BDCs.”


The Central Bank of Nigeria head office in Abuja.

Section 2 of the code stated: “On separation of powers, the positions of the Board Chairman and the Managing Director/Chief Executive Officer shall be separate. No one person shall combine the two positions in any BDC at the same time. For the avoidance of doubt, no executive Vice Chairman shall be allowed in the Board structure.

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“Not more than two members of a family shall be on the board of a BDC at the same time. The expression ‘family’ includes director’s spouse, parents, children, siblings, cousins, uncles, aunts, nephews, nieces and in-laws.

“Where the BDC is a member of a holding company, not more than two family members shall be allowed to serve on the Boards of the BDC and the holding company. No two members of a family shall occupy the positions of Chairman and MD/CEO of a BDC.”

On equity ownership, section 3 of the code stated: “No government, ministry, department or agency shall have direct and/or indirect equity holding in any BDC. Except as approved by the CBN, no individual, group of individuals, their proxies or corporate entities and/or their subsidiaries shall own controlling interest in more than one (1) BDC.

Section 4 of the code noted: “On rights of other stakeholders; employees, customers and other stakeholders of BDCs shall be able to freely communicate their concerns about illegal or unethical practices to the Board.

“Where such concerns bother on the activities of the Board, such individuals shall have recourse to the CBN in accordance with Section 3.4 of the Guidelines for Whistle Blowing for Banks and OFIs in Nigeria.

“Where stakeholders’ interests are protected by law, stakeholders shall have the opportunity to obtain effective redress for violation of their rights.”

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