Financial institutions under the supervisory purview of the CBN are the deposit money banks, the discount houses, primary mortgage institutions, community banks, finance companies, bureaux-de-change and development finance institutions. The supervisory function of the CBN is structured into two departments - Banking Supervision and Other Financial Institutions. Banking Supervision Department carries out the supervision of banks and discount houses while the Other Financial Institutions Department supervises community banks and other non-bank financial institutions. The supervisory process involves both on-site and off-site arrangements. The directors of these departments report to the Deputy Governor, Financial Sector Surveillance.
Banking Supervision Department
The on-site aspect of the department's function includes independent on-site assessment of banks' corporate governance, internal control system, reliability of information provided, etc. The field examinations carried out by the department are grouped into maiden, which is usually conducted within six months of commencement of operation by a new bank; routine which is the regular examination; target, which addresses specific areas of operation of a bank e.g. credit and special which is carried out as the need may arise as provided in section 32 of the Banks and Other Financial Institutions Act. The departments also conduct spot-checks for quick confirmations/verification.
The off-site aspect reviews and analyses the financial conditions of banks using prudential reports, statutory returns and other relevant information. It also monitors trends and developments for the banking sector as a whole. Industry reports are generated on monthly and quarterly basis.
Other Financial Institutions Department (OFID)
The department handles the supervision of community banks (CBs), primary mortgage institutions (PMIs) finance companies (FCs), bureaux de change (BDC) and development finance institutions (DFIs).