AN EXAMINATION OF THE REGULATORY STRUCTURE FOR ELECTRONIC BANKING IN NIGERIA
DOI:
https://doi.org/10.53704/fulaj.v1i1.517Abstract
There is no gainsaying the fact that financial activities are predominantly tailored by the banking sub-sector. Indeed, banking activities are substantially electronically driven in this age. As such, the quality and structure of regulation of these activities are important in determining their efficiency. The article, thus, sets out to examine the regulatory structure of electronic banking in Nigeria. It adopts the doctrinal legal research methodology and examines the legal framework founded on the Banks and Other Financial Institutions Act (BOFIA), 2020, the Central Bank of Nigeria Act (CBNA), and other subsidiary legislation made by the Central Bank of Nigeria (CBN), under these laws. It contends that both the BOFIA and CBNA do not directly provide for e-banking regulations, rather the CBN is empowered to issue guidelines. While this is a good approach, it exposes the framework to different forms of risks as a result of its flexibility. It further reveals that Nigeria’s approach to banking regulation is mainly focused on institutional regulation, making it difficult for the regulator to focus on unique electronic services offered by the banks and other service providers. The system is found to have been bedeviled by some challenges, ranging from adequacy gaps, and system exposure to risks such as fraud, hacking, and other criminal intrusions. It, thus, mainly recommends that the focus of regulation must be scaled down to cater to different e-banking products and services, rather than the banks and service providers themselves. This must be supported with strategies aiming to address intricate and overlapping risks, functions, and institutional portfolios. Caution must also be taken not to make the structure too complex to discourage competition or stifle growth as a result of the heavy compliance burden.
Keywords: E-banking, Central Bank of Nigeria, Regulation, Banks, Legal Framework, Guidelines.
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