# CENTRAL BANK OF NIGERIA

Financial Policy & Regulation Department
Central Business District
P.M.B. 0187
Garki, Abuja.

Tel: 09-46237404
E-mail: fprd@cbn.gov.ng

FPR/DIR/CIR/GEN/01/035
November 26, 2012

## LETTER TO ALL DEPOSIT MONEY BANKS AND STAKEHOLDERS

### COMPETENCY FRAMEWORK FOR THE NIGERIAN BANKING INDUSTRY

Further to the Exposure Draft on the Competency Framework, subsequent correspondence and the contributions of the Bankers’ Committee on the above subject, we formally forward herewith, the finalized version of the COMPETENCY FRAMEWORK FOR THE NIGERIAN BANKING INDUSTRY for implementation.

We also wish to remind you that the timeline for full compliance with the Framework is 24 months as provided under the gestation period. Bank Examiners will be required from their next examination visit to report on the efforts being made by each institution to ensure compliance with the provisions of the Framework.

Chris O. Chukwu
DIRECTOR, FINANCIAL POLICY & REGULATION DEPARTMENT

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NOVEMBER 26, 2012

CENTRAL BANK OF NIGERIA
COMPETENCY FRAMEWORK FOR THE NIGERIAN BANKING INDUSTRY

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Contents

1.0 Introduction
2.0 Objectives
3.0 Country Experiences
4.0 Banking Industry Job Families/Roles/ Controlled Functions
5.0 Approved Persons Database
6.0 Code of Practice for Approved Persons
7.0 Training and Certification
8.0 Accreditation of Training Service Providers
9.0 Role of the Other Relevant Stakeholders
10.0 Appendices

1.0 INTRODUCTION

The recent global financial crisis exposed the inadequacy of skills and dearth of executive capacity in the banking industry. The skill gap manifested in, among others:

• The lack of in-depth knowledge of core banking functions and poor understanding of basic banking operations;
• Poor understanding of banking regulations;
• Unethical conduct and unprofessional practices;
• Poor risk management and corporate governance practices;
• Knowledge gaps in financial markets and treasury management;
• Knowledge gaps in business development practices; and
• Poor relationship management techniques.

Reasons advanced for these inadequacies include the lack of:

i. A coordinated industry-recognised training accreditation and certification system; and
ii. Competency standards for practitioners in the industry.

From the foregoing, the development of staff competencies has become important in addressing these inadequacies, underscoring the need to train a new generation of banking professionals that is knowledgeable, skilled and competent to develop and deliver satisfactory banking products and services to the consumers.

With stability now restored to the Nigerian banking system following several measures and initiatives taken by the CBN under the on-going banking sector reforms, it is imperative that immediate steps be taken to consciously re-direct the banking industry towards the path of entrenching a sequenced competency development programme.

The development of a competency framework for the Nigerian banking industry is predicated on the need for banks to accord high priority to the continuous enhancement of human capital and lifelong learning. This will imbue banking professionals with the requisite knowledge, skills and expertise not only at the strategic and management levels, but also at the technical and operational levels.

The availability of appropriately trained and competent human resources is a critical factor in supporting the effective performance of the banking industry. This, in essence, implies that continuous strengthening of intellectual resources and capabilities must be undertaken to create a pool of talented and high calibre professionals in the banking industry.

The framework is expected to address the competency challenges in the banking industry, explore growth opportunities as well as critically facilitate improvement in the quality of the industry’s human capital. Under the framework, successful banks will be those that distinguish themselves by according high priority to continuous enhancement of human capital and lifelong learning. However, the framework is not intended to eliminate the training programmes of banks as banks are encouraged to continue to explore opportunities for enhancing the quality of their human capital.

At the commencement of the implementation of this Framework, it is expected that occupants of some job roles may not meet the requirements in this Framework. Such occupants may continue to perform those roles but can only advance beyond the roles upon satisfying the requirements of the Framework as they pertain to their current positions. However, full compliance with the framework would take effect 24 months from the date of the issuance of the framework.

The proposed framework leverages on the practices in other jurisdictions such as Singapore, Hong Kong, Malaysia and Dubai which provide a useful guide and template for the Nigerian banking industry.

2.0 OBJECTIVES OF THE FRAMEWORK

The objectives of the competency framework are to:

i. Define the minimum knowledge, skills and competencies needed for operators and regulators to perform optimally on their various jobs/tasks.

ii. To standardize capacity and competency development with a view to nurturing and producing a knowledgeable, skilled and competent workforce for the Nigerian banking industry.

iii. To establish standard competency requirements for each job role to serve as a guide to Nigerian banks for their talent recruitment and development programs.

iv. To provide standards for training certification, evaluation and accreditation to ensure the provision of quality training in the Nigerian banking industry.

v. To ensure that practitioners continually update their knowledge and skills in line with the dictates of their assignments.

vi. Serve as a tool for banks to assess their overall human capital capabilities;

vii. Identify competency gaps and develop required learning interventions to bridge identified gaps.

viii. Provide a basis for sustaining career development in the Nigerian banking industry.

ix. Establish a system of assessing and tracking compliance to defined standards.

3.0 BANKING INDUSTRY JOB FAMILIES/ROLES/CONTROLLED FUNCTIONS

In this framework, jobs in the banking industry have been classified into job families, roles and controlled functions.

For each class of banking (commercial, merchant, or specialised), there exists generic job families. These are occupational groups or clusters of closely-related jobs that capture the essence of an underlying business function; while job roles capture the essence of what must be done and how it should be done to achieve the required level of performance.

On the other hand, controlled functions are roles within a business that have a particular operational and/or regulatory significance. A function may be designated as a controlled function if an individual exerts significant influence on the conduct of the financial institution's affairs, in relation to controlled activities.

Controlled functions are further classified into Significant Influence Functions and Customer Functions.

3.1 Significant influence functions

Significant influence functions are those functions that materially impact on the activities of the financial institutions. These can be divided into the following sub-groups:

i. Governing functions: These include entity significant influence roles such as Chairman, Managing Director, Deputy Managing Director, Executive Directors, Non-executive Directors, Independent Directors.

ii. Regulatory functions: These include the Audit and Compliance functions.

iii. System and control functions: These include Finance, Risk, Internal Audit and Information Technology functions.

iv. Significant management functions: These include key management functions such as company secretariat, investment business, financial resources functions, settlement and other key business operations functions.

v. Parent entity significant influence functions: This is applicable where a financial institution is a subsidiary and there are directors or employees of the parent company whose decisions or actions significantly impact the decisions of the board and management of the financial institution.

vi. Significant shareholders: These are investors with shareholding of 5% or more in the financial institution.

3.2 Customer Functions

These are functions that can influence customers' decisions on investments and service adoption. They apply to advisers who communicate with the customers or deal with their assets. They include:

i. Specialized lending officers,

ii. Ombudsman,

iii. Branch managers,

iv. Private banking adviser,

v. Customer service/contact centre managers, and

vi. Retail advisory officers.

Table 1: List of Controlled Functions

Code	Function	Category
CFC0a	Significant parent entity functions	Significant Influence Function
CFC0b	Significant shareholders	Significant Influence Function
CFC1	Chairman of the Board	Significant Influence Function
CFC2	Chairman of Board Risk Committee	Significant Influence Function
CFC3	Chairman of Board Audit committee	Significant Influence Function
CFC4	Chairman of Board Human Resource, or equivalent, Committee	Significant Influence Function
CFC5	Chief Executive Officer/Managing Director	Significant Influence Function
CFC6	Deputy Managing Director	Significant Influence Function
CFC7	Executive Director	Significant Influence Function
CFC8	Non-Executive Director	Significant Influence Function
CFC9	Chief Risk Officer	Significant Influence Function
CFC10	Chief Financial Officer	Significant Influence Function
CFC11	Chief Internal Auditor	Significant Influence Function
CFC12	Chief Compliance Officer	Significant Influence Function
CFC13	Head, Human Resources	Significant Influence Function
CFC14	Head, Credit Risk Officer	Significant Influence Function
CFC15	Head, Operational Risk Officer	Significant Influence Function
CFC16	Head, Market Risk/ALM Officer	Significant Influence Function
CFC17	IT Auditor	Significant Influence Function
CFC18	Chief Information Officer	Significant Influence Function
CFC19	Business Information Security Officer	Significant Influence Function
CFC20	Company Secretary	Significant Influence Function
CFC21	Treasurer	Significant Influence Function
CFC22	21 a. Chief Dealer/Financial Markets Officer<br>21 b. Dealers	Significant Influence Function
CFC23	Senior Corporate Finance Officer	Significant Influence Function
CFC24	Chief Economist /Senior Economist	Significant Influence Function
CFC25	Senior Lending Officer – Retail	Customer Function
CFC26	Senior Lending Officer – Corporate	Customer Function
CFC27	Senior specialized Lending Officer	Customer Function
CFC28	Senior Agricultural Lending Officer	Customer Function
CFC29	Senior Operations Officer - Trade Finance	Significant Influence Function
CFC30	Senior Operations Officer - Electronic Banking	Significant Influence Function
CFC31	Senior Operations Officer (General)	Significant Influence Function
CFC32	Ombudsman	Customer Function
CFC33	Private Banking Adviser	Customer Function
CFC34	Branch Manager	Customer Function
CFC35	Retail Advisory Officer	Customer Function

Details of the banking industry job families\roles\functions and their minimum qualifications are provided in Appendix A.

# 4.0 APPROVED PERSONS DATABASE

## 4.1
To ensure that only Fit and Proper persons man the different job roles and control functions within the banking industry, all persons for the position of Assistant General Manager and above as well as key positions that have significant impact on the resources and operations of a bank shall be approved for appointment in line with the Assessment Criteria for Approved Persons Regime issued and reviewed from time to time by the CBN.

## 4.2
In furtherance of this objective, a central database for approved persons shall be created and maintained at the CBN. All banks as reporting institutions shall update the database with details of approved persons and access it as part of their due diligence prior to the engagement and appointment of persons within the industry.

## 4.3
The database will:
- i. Assign a unique identifier to each banking practitioner.
- ii. Be accessed prior to the engagement or appointment of persons to board, top management or critical operational positions in the banking industry.
- iii. Provide reference information to relevant stakeholders – regulators, employers, employees, auditors, business partners, etc – for the assessment of the continuous Fitness and Propriety of approved persons in the industry
- iv. Encourage transparency in the recruitment and appointment process.

## 4.4
Details in the database will include:
- Full Names - surname, other names
- Commonly known names/alias names
- Identification number – National ID, International passport, drivers’ licence number
- Passport photograph
- Biometric finger prints
- Professional qualification and educational background
- Controlled functions currently being performed
- The institution’s reference number
- History of previous approvals for the individual
- Disciplinary history
- Career history
- Credit points garnered from attendance and certification at accredited training programmes.

# 5.0 CODE OF PRACTICE FOR APPROVED PERSONS

## 5.1
An approved person, performing a controlled function, must act with integrity, due skill, care and diligence. He/she must observe proper standards of market conduct and deal with regulators in an open and cooperative way, disclosing any information of which regulators would reasonably expect to be notified.

## 5.2
An approved person performing a significant influence function must:
- i. Take reasonable steps to ensure that the business of the financial institution for which he is responsible is organized so that it can be controlled effectively.
- ii. Exercise due skill, care and diligence in managing the business of the financial institution for which he is responsible in his controlled function.

## 5.3
Take reasonable steps to ensure that the business of the financial institution for which he is responsible complies with relevant laws, rules, guidelines and other regulatory requirements.

Details of the proposed code of practice for approved persons under this framework are provided in Appendix B.

# 6.0 TRAINING AND CERTIFICATION

## 6.1
The framework seeks to ensure that persons engaged in the various job families/controlled functions have adequate skills and competencies to carry out the roles for which they have been certified.

## 6.2
There shall be structured generic and function or role-specific training and certification process that provides a reliable and objective assessment of an employee’s competence and ability to perform and meet the demands of a job consistently over time. Competencies and their related certifications will be based on job roles rather than job titles.

## 6.3
Training and certification will be provided by accredited local and overseas education and training service providers. Accredited training service providers may administer online or classroom-based training. However, only accredited programmes will qualify for credit points under the framework. The minimum requirements for certification of each job role/control function are as indicated in Appendix B.

## 6.4
A training service provider could be any of the following:
- An individual
- A profit-oriented consultancy outfit or commercial entity
- A not-for-profit entity
- The training/learning centres of banks
- Relevant professional bodies
- A university, polytechnic or other relevant educational institutions of higher learning.

## 6.5
Banks are expected to put in place policies that ensure quality and equitable training for all their staff. In this regard, training programmes

attended by bank personnel over a period will be evaluated on the basis of total credit points obtained within a given period of time.

6.6 To attain and maintain competency in a particular job role, the individual responsible for a controlled function is expected to accumulate a minimum number of predetermined credit points, through attendance at and successful completion of accredited training programmes.

6.7 The credit points for training programmes attended shall be awarded by designated accreditation agencies, taking into cognisance such factors as:

• Programme curriculum
• Duration of Programme
• The Faculty
• Quality and relevance of the programme.
• The pedigree of the training provider.

6.8 To ensure objectivity and credibility in accumulating the required credit points, not more than 60 per cent shall be obtainable through an institution's in-house training programmes.

In-house training shall be deemed to be accredited training programmes conducted by the internal faculty of an institution and or by accredited external facilitators solely for the institution.

6.9 The number of relevant accredited training attended and credit points accumulated shall be one of the assessment criteria in determining the suitability of approved persons for specific job roles/functions. Consequently, banks shall be required to populate the Approved Persons Database with details of credit points earned by approved persons in their employ.

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7.0 ACCREDITATION OF TRAINING SERVICE PROVIDERS

7.1 The accreditation of a training service provider will be conducted by an industry-recognized accreditation agency. The agency will carry out extensive review and evaluation in order to ascertain if the provider has the competence to conduct the training programme(s) envisaged under the Framework.

7.2 An agency shall be designated as an accreditation agency, subject to meeting the qualifying criteria to be prescribed by the Bankers' Committee and approved by the CBN from time to time.

7.3 An accreditation agency could be any of the following:

i. A recognized professional institute/body
ii. A recognized educational institution of higher learning
iii. A recognized training consultancy outfit
iv. Other duly recognized body, institution or company.

An accreditation agency shall not render any training service under the Framework.

7.4 The accreditation of training providers is a quality assurance mechanism to ensure that the training provider is qualified to provide the desired training and the programmes of the training provider meet the learning objectives and will impact the requisite knowledge, skills and competencies required for each job role.

7.5 The accreditation agency shall be responsible for accrediting training service providers. This will involve the endorsement of the training provider and its programmes based on an assessment of its curricula, competence, capacity, capability, faculty, resources, facilities, credibility,

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independence and integrity among other criteria, in carrying out specific training programme(s).

The accreditation agency shall, among other things, register training service providers. Accreditation of a training service provider shall be valid for a period not exceeding three years. However, the accreditation agency shall continually monitor programmes to ensure that they meet set requirements at all times.

The accreditation agency shall also present a report of its activities annually to the Bankers’ Committee.

7.6 There shall be two types of accreditation of training service providers, namely Solicited or Unsolicited.

7.7 Accreditation may not be solicited in respect of:

• Well-established and/or Industry-recognized training and certification programmes offered by qualified and eligible training service providers under this framework.
• A training service provider duly accredited by a competent accreditation agency in Nigeria.

7.8 In every other case, training service providers wishing to offer their services in the Nigerian banking industry shall solicit and be duly accredited by a competent accreditation agency under this framework. Where accreditation is solicited, the cost of accreditation shall non-refunded and borne by the service provider.

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8.0 ROLE OF STAKEHOLDERS

The following stakeholders are expected to play various roles under the framework:

i. Central Bank of Nigeria

The CBN will provide supervisory oversight, monitoring and regulatory guidance to ensure banks' compliance with the framework. In addition, the CBN will perform the following roles:

• Coordinate the development of the Framework;
• Approve and supervise subsequent periodic upgrades of the framework;
• Maintain the database of approved persons and financial institutions;
• Withdrawal of approvals where necessary;
• Application of sanctions for breaches by approved persons.

ii. Nigeria Deposit Insurance Corporation

The Corporation will provide supervisory oversight in the implementation of the framework.

iii. The Bankers' Committee

The Bankers' Committee would act as a coordinator alongside the CBN for the development and implementation of the framework.

iv. Financial Institutions (FIs)

The financial institutions will provide specification of minimum competencies needed for each job role along with inputs for the specification of career paths, job descriptions and training curriculum needed for the development of the framework.

Furthermore they are shall:

• Comply with data protection requirements.
• Update the database with details of training programmes and credit points obtained by each officer performing a controlled function.
• Periodically review the requirements of each controlled function.

Financial institutions are expected to continually satisfy themselves that the persons performing controlled functions have the necessary qualifications, experience, competence and capacity to carry out their duties.

v. Financial Institutions Training Centre (FITC)

FITC is expected to provide inputs for the specification of competencies for job roles, career paths, job descriptions, and training curriculum. It will also act as a training service provider under the Framework, subject to certification by the accreditation agency.

vi. Chartered Institute of Bankers of Nigeria (CIBN)

CIBN shall be the Accreditation Agency under this Framework.

It is expected to provide inputs for the specification of minimum competencies for job roles, career paths, job descriptions, and training curriculum. It will also issue ethical and professional guidance as well as monitor the conduct of its members. It will also monitor the performance of the accredited training services providers.

vii. Other Professional Bodies and Associations

These include professional bodies such as the Institute of Chartered Accountants of Nigeria (ICAN), Chartered Institute of Stockbrokers (CIS), Chartered Institute of Management (CIM), Risk Management Association of Nigeria (RIMAN) and Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN), etc. They will also issue ethical and professional guidance and monitor the conduct of their members. They are also expected to develop training curricula and provide professional and other relevant training to their members and practitioners in the banking industry.

viii. Accreditation Agency

The accreditation agency will be responsible for registering/deregistering, accrediting, supervising/monitoring and evaluating training service providers in the industry.

ix. Training Service Providers

These are entities accredited to provide training services under the framework. These include professional bodies, educational institutions and other entities that are expected to design appropriate curricula oriented to the talent and skills needs of the Nigerian banking industry.