The implementation of effective fiscal and monetary policy measures is critical towards addressing the unexpected impact of the Covid-19 pandemic on the Financial System, the Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim stated.
The NDIC boss stated this on Wednesday at the Corporation’s Webinar titled “The Impact of COVID-19 on the Banking System with a Special Focus on Non-Interest Financial Institutions’ (NIFIs)” organised by the NDIC in collaboration with the Islamic Financial Service Board (IFSB), where he was represented by Mr. Galadima Y. Gana, Director, Insurance Surveillance Department (ISD), NDIC.
He described the Webinar event as a crucial platform for stakeholders and regulators in the industry to examine and analyse the issues affecting operations in the Non-Interest Banking sector that have been impacted by the pandemic with a view to proffering effective solutions and interventions to ensure stability of the financial system.
He explained that the aim of the Webinar was to bring critical stakeholders in the Non-Interest Banking sector to, among other issues, evaluate the Central Bank of Nigeria’s interventions in the sector in terms of enhancing financial inclusion, gain insights into consumer behaviour in light of the recent Sukuk Issuance as well as highlight global interventions such as the Islamic Development Bank’s Social Welfare Sukuk.
The Secretary General of the IFSB, Dr. Bello Lawal Danbatta, disclosed that since its establishment in 2003, the IFSB has remained committed to the implementation of prudent regulations to promote financial system stability for Non Interest Financial Institutions (NIFIs). He said in light of the global impact of the COVID-19 pandemic on the financial system, it is critical for industry operators to strictly monitor their Credit, Market and Operation Risks for operational resilience as well as come up with a coordinated policy response for both domestic and international financial institutions.
Highlights of the recommendations include the need for regulators, especially the CBN to address the Liquidity challenges faced by the NIFIs on investible instruments particularly short-term investible windows; the adoption of Social Financing in collaboration with religious bodies that have the mandate to collect zakat (Islamic obligatory charity) and protect Waqf (Islamic charitable endowment) that could be channeled towards projects targeted at poverty alleviation; the extension of Sukuk to include the corporate private sector and the use of its proceeds in developmental initiatives such as healthcare; and the establishment of Non-Interest Microfinance Banks to target the financially excluded and underserved segments of the population in line with the financial inclusion drive of the Federal Government.