The Director, Consumer Protection Department of Central Bank of Nigeria (CBN), Mrs Ummar Dutse, has urged financial institutions to encourage the use of bonds, indemnities and guarantees in contracts.
Dutse made the appeal yesterday in Lagos while delivering a keynote address at a workshop organised by the Chartered Institute of Bankers of Nigeria (CIBN).
She spoke on Bonds, Indemnities and Guarantees and Key Market Options in the Nigerian Banking Industry.
Dutse said that these financial instruments could provide comfort to parties when a contract was frustrated.
She said that the instruments should be encouraged given proper capacity improvement and ethical practice by financial institutions and consumers alike. She also said that these instruments should be embraced to support the efforts of the CBN in building and sustaining a stable financial industry.
The CBN official said that there was the need for sustained supervision by financial regulators to curb the disturbing trend of failure to honour due obligations.
She said that this situation in addition to the reputational risks it portended were capable of undermining important regulatory efforts aimed at promoting stability in the financial system. (NAN)