Learn more about the Central Bank of Nigeria and their functions in quick and easy steps. We are all familiar with the CBN but only a few of us truly understand the full functions of the CBN. I will show you everything about them.
The Central Bank of Nigeria (CBN)
The Central Bank of Nigeria is the highest authority in terms of banking in Nigeria and was established in the year 1958 and began its operations on the 1st of July, 1959.
Objectives of the CBN
- To maintain the external reserves of the country
- To Improve and maintain monetary stability within the country
- To create a sound financial environment
- It acts as a banker if all else fails and financial adviser to the federal government
History of the Central Bank of Nigeria
Central Bank of Nigeria was established in 1958 as a result of an inquiry established in 1948 to checkmate the banking practices in Nigeria at that time. Since at that time, banking practices were uncontrolled, banks opened and closed up so easily. the functions of the Central bank at that time was just to supervise the banking sector but his has expanded since then.
The first Governor of Central Bank was Roy Pentelow Fenton and he began his tenure on the 24th of July 1958. The present Governor of Central Bank is Godwin Emefiele and he began his tenure on the 3rd of June, 2014.
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Functions of the Central Bank of Nigeria
- The Central bank keeps an account for all the commercial banks and financial institutions in the country
- It serves as the financial adviser to the Federal Government
- The Central bank of Nigeria provides means of foreign exchange for payments of debts or purchase of goods for the government
- It maintains the account of the federal government
- The Central bank maintains all current accounts for commercial banks
- It manages the debt of the country in compliance with the regulations of the Federal Ministry of Finance
- It is the clearinghouse for all the accounts of the different commercial banks
- The Central Bank regulates the direction and volume of bank loans collected by consumers
- The Central bank of Nigeria serves as the custodian of the reserves of Gold and other international currencies.
- It is the sole responsibility of the Central bank to issue currency notes and coins
- It regulates the financial laws and ensures a balance between inflation and deflation in the economy of Nigeria
- The CBN keeps surveillance of all banking halls and issues regulations to be adhered to by all the banks in Nigeria
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The CBN is at the centre of all banking and financial activities in the country. Without the Central Bank of Nigeria, the country could get into financial crisis as a result of uncontrolled banking activities.
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