August 26, 2011
The Central Bank of Nigeria has issued new requirements for individuals to be employed at top management positions in any bank or other financial institutions under its supervision.
The new guidelines are contained in a circular by the apex bank to discount houses and other financial institutions titled, “Assessment Criteria for Approved Person’s Regime for Financial Institutions,” signed by the Director, Financial Policy Regulation Department, CBN Mr. Chris Chukwu.
It said the move was to ensure that only “fit and proper persons” were considered for such appointments.
The apex bank also directed that shareholders with five per cent stake and above in banks and other financial institutions in the country must attend an oral interview to be conducted by it.
It added that such investors were also expected to complete an “Approved Persons Regime” questionnaire to be administered by the CBN.
The circular with reference number; FPR/DIR/CIR/GEN/01/016, replaces an earlier one referenced BSD/DO/CIR/VOL.1/01/2001, dated January 4, 2001, which specified the criteria for board and top management appointments in Nigerian banks.
It explained that the CBN would adopt “fitness tests” to assess the competence of candidates for board, top management and critical operational positions and their capacity to fulfil the responsibilities of their positions, while it would to also use “propriety tests” to assess their integrity and suitability.
The CBN listed the fitness requirements for appointing a managing director, deputy managing director and executive director in banks or discount houses to include, “A minimum of first degree or its equivalent in any discipline (additional qualification or degree in any business related discipline may be an advantage); a minimum of 15 years post qualification experience, out of which, at least, 10 must be in management and leadership positions; and that the bank must provide evidence that the candidates possess proven skills and competences.”
On the other hand, it explained that the fitness requirements for managing directors and executive directors of other financial institutions included a minimum of first degree or its equivalent in any discipline (additional qualification in any business related discipline may be an advantage).
The circular read in part, “For Primary Mortgage Institutions, a minimum of 10 years post qualification experience out of which, at least, five must have been in financial services industry and at least, three at the senior management level.
“For finance companies and microfinance banks, a minimum of eight years post qualification experience out of which, at least, five must have been in financial services industry and at least, three at the senior management level; the institution must provide evidence that the candidate possess proven skills and competences.”