Nigeria Bank, Moneymart Disagree

By Eddyson Lugangwa Posted 19 April 2006 @ 12:47 pm EET     Print     Reprint     E-Mail     Comments

Nairobi (IBTimes.com) - The Central Bank of Nigeria (CBN) and the Money Market Association of Nigeria (MMAN) have disagreed over the need for the establishment of an association of foreign exchange dealers in the country.

Apex bank recently indicated its desire for an association of foreign exchange dealers in the country. It was gathered that MMAN, which is the umbrella body of banks' treasury is however indisposed to the idea of establishing such a body saying it is not necessary.

A top official of CBN who confirmed this to Vanguard said there is need for such a group to monitor and regulate foreign exchange dealers in the country. MMAN also known as moneymart however insist that it already serve the purpose for which the association been clamored for.

The apex bank it was gathered believes that an association of foreign exchange dealers is necessary to set the rules, code of conduct and professionalism for foreign exchange dealers. In addition to this the association will also grant licence to practice to foreign exchange dealers and sanction them when they are found culpable of malpractice.

According to the CBN official, the association will be run by top officials, from executive director of banks and other authorised dealers hence it will command the necessary respect and executive powers to implement and enforce compliance to its rules and codes.

The official said presently there is no body or group performing such functions and that the moneymart only has rules and codes for local currency dealers while it pays little attention to the practice of foreign exchange dealing.

"With the liberalisation of the foreign exchange market vis-a-vis importation of foreign exchange by banks, there is need to have a body to ensure that foreign exchange dealers play by the rules rather than wait till the CBN found them culpable and impose sanctions on the organisations", the official explained, adding that it is for the market to decide on creating such association and not for the CBN to decide for them.

Reacting to this at the inauguration of the new executives of moneymart, the association's new president, Mr Bolaji Senjobi said that there is no need to have a parallel group to regulate practice of foreign exchange dealing as foreign exchange dealing is part of the functions of its members.

He noted that foreign exchange dealing is a treasury function hence in all financial institutions, both foreign exchange dealers and local currency dealers report to the treasurer of the organisation. He said in addition to this foreign exchange dealing is included in the Treasury Dealership Certificate (TDC) course which is the criteria for anybody who is going to be a member of the association.

Moneymart started as an informal body in 1976/77. It was formalized on May 12, 1989 as an Association incorporated under the Land (Perpetual Succession) Act 1962 .The name of the company is Money Market Association Ltd. by Guarantee.

The objectives for which the company is established are: To provide a meeting forum for all members in financial institutions or financial related occupations. To provide a meeting forum for members dealing in the money and foreign exchange market.

To establish and maintain an association of licensed operating universal and specialized banks, discount houses, other financial institutions and individuals concerned with money and foreign exchange market operations.

To serve as a professional body for those engaged in treasury or financial management whether corporate, individuals, self employed or otherwise. To act as a chartered body for all money and foreign exchange market operators.

Others objectives include: To promote and protect the interest of members of the company in the exercise of their business in the money and foreign exchange market. To establish and maintain standards of conduct for members and to encourage honourable professional practice in money and foreign exchange dealings.

To provide a forum for presenting the views of members on any matter that may affect money and foreign exchange market dealings. To provide facilities for the flow of information among members, engage in research into money and foreign exchange market operation and related issues and to disseminate the finding in such manner as may be thought fit. To increase awareness of the money and foreign