Central Bank, Iran, Pakistan Adopt Common Banking Rules

The eight-member developing economies are adopting a common regulatory framework for their banking sectors.
Members of the D-8 are Nigeria, Egypt, Malaysia, Turkey, Iran, Bangladesh, Indonesia and Pakistan.
Nigeria has 24 banks, some of which are recovering from financial slowdown. Three of them are foreign banks.
Central Bank Governor Sanusi Lamido Sanusi said at the event that it is necessary to review and adopt common regulatory regimes to safeguard financial system and forestall a recurrence of the “recent experience in our countries.”
He said Nigeria would learn from the member countries their experiences in non-interest banking and microfinance.
He noted that the objective of the D-8 Governors’ Meeting was to provide the modalities and mechanism of economic and financial cooperation among member countries.
According to him, the D-8 central bank governors’ interaction is envisaged to deepen and broaden the exchange of ideas among individual countries for more effective policy implementation.
“As D-8 Governors, this meeting is expected to strengthen cooperation in our key areas of responsibility," he said.
In the same vein, Olusegun Aganga said, finance minister said: “The members in 2007 agreed on the roadmap for economic cooperation and among the key areas of the road map is the financial cooperation”.
According to him, the mandate of the meeting is to strengthen surveillance mechanisms, enhance domestic financial systems and develop an integrating market.
The minister also enjoined the governors to ensure that the role of central banks on economic policy and implementation were effectively implemented.
He commended the efforts of the D-8 Secretariat in bringing the central banks into mainstream of its activities.
“I must stress that the areas of cooperation of the D-8 central banks drawn up by the secretariat for your meetings are very important, especially for trade facilitations.
“As developing countries, we owe ourselves the duty to promote trade among ourselves in other to grow our economy at a faster rate that none South trade can ordinarily afford us,” he said.
On the local scene, Mr. Aganga said that the federal government is trying to identify sources of funding for the National Sovereign Wealth Fund it is setting up to replace the Excess Crude Account.
When it comes on board, the NSWF would be managed by local and international advisers and would not be subjected to direct control by the government.
“The Sovereign Wealth Fund that is not own by the government but by Nigerians”, he said.
Aganga said the Sovereign Wealth Fund was instituted to benefit the current and future generations.
“You should remember that oil is a depleting asset and when you sell it, you are selling your asset, it is not fair for the current generation only to benefit from it, you must save for the coming generation”, the minister said.
He said there are three objectives for which the Fund would be used:
“One is for the fund to have a box - a portion that is the stabilizing fund - to support whatever project that you have. The second is that you want to have a saving portion for the future generation and the large portion of that should run like infrastructural fund. Thirdly, It is going to serve as a catalyst for bringing in local and international investors,” he said.
Odein Ajumogobiam, minister of Foreign Affairs said at the event that the Federal Government will encourage private sector-led initiatives in all areas of economic development among member nations of the D-8 group.