Corporate governance: CBN limits family influence on BDCs
The Central Bank of Nigeria has limited the number of family members that can be admitted into the board of Bureaux De Change, BDC, operating in the country.
In a new code of corporate governance rules for BDCs, the apex bank stipulates that with effect from December 1, 2018, only a maximum of two family members can be on the management of BDCs.
A circular signed by Mr. Kevin Amugo, Director Financial Policy and Regulation Department, the apex bank said the new corporate governance regulation is to further strengthen the institutions and reposition them to perform their statutory roles.
The regulation also specifies that the Board shall be accountable and responsible for the performance and affairs of the BDC and members of the Board are severally and jointly liable for the activities for the BDC.
The new regulation states that “the positions of the Board Chairman and the MD/CEO 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.”
It said “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.”
The new regulation also said “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” and that “no two members of a family shall occupy the positions of Chairman and MD/CEO of a BDC.”
Also in a new guidelines for licensing and regulation of the Payment Service Banks, PSBs, the Central Bank fixed N5billion minimum capital requirement for the PSBs in the country.
In a circular to all stakeholders, the CBN also gave N500,000 as non-refundable application fee, N2million non-refundable licensing fee, and N1million change of name fee.
In the circular, it stated that the CBN might vary the requirements from time to time.
“Promoters should note that in compliance with Banks and Other Financial Institutions Act, the investment of the share capital deposit shall be subject to availability of investment instruments. Upon the grant of licence or otherwise, the CBN shall refund the sum deposited to the applicant, together with the investment income, if any, after deducting administrative expenses and tax on the income.”
The regulator also said the PSBs were envisioned to facilitate high volume low-value transactions in remittance services, micro-savings and withdrawal services in a secured technology-driven environment to further deepen financial inclusion and help in attaining the policy objective of 20percent exclusion rate by 2020.