Regulatory Alerts2019-04-12 | BSD/DIR/GEN/LAB/12/011/6Guidance Notes on Supervisory Review Process for Non-Interest Financial Institutions in Nigeria
The Central Bank of Nigeria's Guidance Notes outline the supervisory review process for non-interest financial institutions, adopting a risk-based approach in line with Basel 2 Pillar 2. The notes cover internal capital adequacy assessment, supervisory review and evaluation, and regulatory capital requirements. NIFIs must identify and manage risks, including credit, market, liquidity, and operational risks, and maintain adequate capital. The CBN may intervene if capital falls below adequate levels. Corporate governance, risk management, and internal controls are vital, with independent Shari'ah governance and internal audit functions. NIFIs engaging in securitization must assess risk exposures, and windows must maintain notional capital funds. The supervisory review examines windows as units and on a consolidated basis.