The Nigeria Deposit Insurance Corporation (NDIC) on Tuesday said the country's banks remain stable in spite of a negative rating on Nigeria by global credit rating agency, Moody's.
NDIC Deputy Director for Bank Examination, Abdulhameed Aliu, said this at the ongoing workshop for business editors and finance correspondents by the corporation in Yola, the Adamawa State capital.
The theme of the workshop is, "Nigerian Banking System Stability: Tackling Emerging Issues".
The News Agency of Nigeria (NAN) reports that Moody's Investors Service (Moody's), one of the global credit rating agencies, on December 4 changed its outlook on Nigeria's ratings to negative from stable.
It said Nigeria's weak operating environment posed a challenge to the banking sector in maintaining the recent improving trend, particularly as regards asset quality, given the increasing bank lending.
Mr Aliu said the regulators, which included the NDIC and the Central Bank of Nigeria (CBN), had put in place frameworks that would continuously ensure that the banking industry remains strong.
He said the commercial banks' Capital Adequacy Ratio (CAR) had improved from 10 per cent to 15 per cent, higher than the right per cent threshold.
CAR is a measurement of bank's available capital expressed as a percentage of its weighted exposures.
The deputy director said the development meant that Nigerian banks were insulated against some level of risks.
Mr Aliu noted that the regulator had come up with electronic template that monitors excessive charges among banks.
He said: "Any bank that charges customers beyond what is approved, like I said, we'll go to these banks, it is just unfortunate that our reports are not public reports but we have a lot of circumstances where customers were refunded for excessive charges.
"We have even gone beyond doing these things manually; we have a template that we send to these banks, they are IT driven.
"It is a software that we developed. Once the bank slots in the variables, the results will come out and there is a red flag. So, anyone that has violated the articles, the system generates it.
"It is not the issue of doing manually, the tendency of which there will be mix up, but this is a template that we have been using. So, all those customers that are charged exorbitant charges are flagged off."
He said the idea behind the template is to ensure that banks do not overcharge customers.
"They will tell you it is based on their source of funds and we are talking of infrastructure also, one of the things that is making the banks drive their rate is infrastructure that we don't have.
"Like we said, CBN has customer protection desk, we also have it in NDIC and I can tell you the amount of complaints I receive.
"We don't just wait until customers complain, we request inputs from these banks, they tender their returns and we advise them.
"We don't wait for customers to complain, but where customers even complain, we investigate that," he added.
He said fixed deposit does not determine the bank charges but time value of money, inflation, interest rate as determinants.
On non-performing loans, Mr Aliu also disclosed that those days when insider-related abuse was rampant was over.
He said International Financial Reporting Standards (IFRS) has mandated the banks to always explain in their books facilities that are performing or not as classified or not classified.
He said bank shareholders also have a maximum limit they can borrow and a function of shareholders' funds and the regulator would continue to enforce it.
"On loan, what we usually emphasise when we go to these banks, we look at lapses, analyse how banks give out its loans. If we see infractions, we interject but sometimes some of these facilities go bad, not at the instance of the customers but economy.
Mr Aliu said: "And this sometimes affect the performance of these loans and we are talking about various sectors, you see a lot of customers making effort but the economy is not assisting them in servicing their loans as and when due because their businesses are not really moving."