Capital and Reserve

1. (1) There shall continue to be for Nigeria a body known as the Central Bank of Nigeria (hereafter in this Decree referred to as "the Bank").

 

(2) The Bank shall continue to be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

 

(3) Subject to the limitations in this decree, the Bank may acquire, hold and dispose of movable and immovable property for the purpose of its functions.

 

 

2. The principal objects of the Bank shall be to -

 

(a) issue legal tender currency in Nigeria;

(b) maintain external reserves to safeguard the international value of the legal tender currency;

 

(c) promote monetary stability and a sound financial systems in Nigeria; and

 

(d) act as banker and financial adviser to the Federal Government.

 

 

3. The Bank shall have its head office in any location which is by law the capital of the Federal Republic of Nigeria, and may open branches in any part of Nigeria and appoint agents and correspondents abroad in accordance with the decisions of the Board.

 

 

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Part II

Capital and Reserve.

 

 

4. (1) The authorised capital of the Bank shall be three hundred million naira.

 

(2) All the capital of the Bank shall be subscribed and held only by the Federal Government.

 

(3) The paid-up capital may be increased by such amount as the Board may, from time to time, resolve with the approval of the President, and shall be subscribed by the Federal Government and paid up at par.

 

 

5. (1) The Bank shall -

 

(a) in respect of each financial year, determine its operating surplus which shall be the remaining sum from its income and other receipts after meeting all current expenditures;

(b) as approved by the Board for that year, make provision for the contribution to staff superannuation fund and for any other purpose specifically approved by the President.

 

(2) The Bank shall establish a general reserve fund and shall allocate thereto at the end of each financial year one-sixth of its operating surplus for the year.

 

(3) The balance of the operating surplus shall be paid to the Federal Government half-yearly.

 

 

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Part III

Administration

 

 

 

6. (1) There shall be for the Bank, a Board of Directors (hereafter in this Decree referred to as "the Board") which shall be responsible for the policy and general administration of the affairs and business of the Bank.

 

(2) The Board shall consist of a Governor, five Deputy Governors and five Directors.

 

 

7. (1) The Governor or in his absence of the Deputy Governors nominated by him, shall be in charge of the day-to day management of the Bank and shall be answerable to the Board for his acts and decisions.

 

(2) The provisions of subsection (1) of section 6 of this Decree shall apply in relation to the general policy pursued or intended to be pursued on any administrative matters, including staff pensions, salaries, allowances and any other similar matters.

 

 

8. (1) The Governor shall keep the President informed of the monetary and banking policy pursued or intended to be pursued by the Bank.

 

(2) The President after due consideration may, in writing, direct the Bank as to the monetary and banking policy pursued or intended to be pursued and the directive shall be binding on the Board which shall forthwith take all steps necessary or expedient to give effect thereto.

 

 

9. (1) The Governor and Deputy Governors shall be persons of recognised financial experience and shall be appointed by the President by instrument under the public seal and on such terms and conditions as may be set out in their respective letters of appointment.

 

(2) The Governor and Deputy Governors shall be appointed in the first instance for a term of five years and shall each be eligible for re-appointment for another term not exceeding 5 years.

 

(3) Notwithstanding subsection (1) or (2) of this section, the President may extend the tenure of office of the Governor, any Deputy Governor or any other Director of the Bank whose term of office has expired until a successor to such Governor, Deputy Governor or Director is appointed.

 

 

10. The Governor and the Deputy Governors shall devote the whole of their time to the service of the Bank and while holding office shall not occupy any other office or employment whether remunerated or not:

 

Provided that the Governor or any of the Deputy Governors may by virtue of his office be appointed with the approval of the Board to -

 

(a) act as member of any commission established by the Federal Government to enquire into any matter affecting currency or banking in Nigeria;

 

(b) become Governor, Director or member of the Board or by whatever name called, of any international bank r international monetary institution to which the Federal Government shall have interest or given support or approval;

 

(c) become Director of any corporation in Nigeria in which the Bank may participate under paragraph (i) of subsection (1) of section 27 of this Decree.

 

 

11. (1) The five Directors of the Bank shall be appointed by the President.

 

(2) A Director appointed pursuant to this section shall be a person of recognised standing and experience in financial or banking affairs, but whilst a Director of the Bank, he shall not be regarded or act as a delegate on the board of any Federal, State or Local Government or of any commercial, financial, agricultural, industrial, or other interest with which he may have been connected before his appointment as a Director of the Bank.

 

(3) A Director appointed pursuant to this section shall -

 

(a) hold office for three years and shall be eligible for re-appointment for another term of three years only;

 

(b) be entitled to such fees and allowances as may be prescribed by rules made in that behalf by the Board and approved by the President.

 

 

12. (1) No person shall be appointed or shall remain Governor, Deputy Governor or Director of the Bank if he is

 

(a) a member of any Federal or State legislative house;

 

(b) a Director, officer or employee of any bank licensed under the Banks and Other Financial Institutions Decree 1991.

 

(2) The Governor, any Deputy Governor or any Director shall cease to hold office in the Bank if he -

 

(a) becomes of unsound mind or, owing to ill health, is incapable of carrying out his duties;

 

(b) is convicted of any offence involving dishonesty or any other offence the maximum penalty of which exceeds imprisonment for six months;

 

(c) is guilty of a serious misconduct in relation to his duties under this Decree;

 

(d) is disqualified or suspended from practising his profession in Nigeria by order of a competent authority made in respect of him personally;

 

(e) becomes bankrupt or suspends payments or compounds with his creditors.

 

(3) The Governor or any Deputy Governor may resign his office by giving at least three months notice in writing to the President of his intention to do so; and any Director may similarly resign by giving at least one month's notice in writing to the President of his intention to do so.

 

(4) If the Governor, any Deputy Governor or any Director of the Bank dies, resigns or otherwise vacates his office before the expiry of the term for which he has been appointed, there shall be appointed a fit and proper person to take his place on the Board for the unexpired period of the term of appointment in the first instance -

 

(a) if the vacancy is that of the Governor or a Deputy Governor, the appointment shall be made in the manner prescribed by section 9(1) of this Decree; and

 

(b) if the vacancy is that of any Director, the appointment shall be made in the manner prescribed by section 11(1) of this Decree.

 

 

13. (1) Meetings of the Board shall take place as often as may be required, but not less than six times in every financial year of the Bank.

 

(2) The Governor shall preside at every meeting of the Board and in his absence, a Deputy Governor designated by him shall preside at such meeting.

 

(3) Five members of the Board, two of whom shall be Directors other than the Governor or the Deputy Governors, shall form a quorum at any meeting.

 

(4) Unless otherwise provided in this Decree, decisions shall be a simple majority of the votes of the members present, but in case of any equality of votes, the person presiding shall have a casting vote.

 

 

14. (1) Appointment of employees of the Bank shall only be to positions created by decisions of the Board and on such terms and conditions as may be laid down by the Board.

 

(2) No salary, fee, wage, allowance or other remuneration paid by the Bank shall be computed by reference to the operating surplus of the Bank.

 

(3) The salaries, fees, wages or other remuneration or allowances (including pensions and other retirement benefits) payable to or in respect of employees of the Bank, other than the Governor or Deputy Governors, shall be as stipulated, from time to time, by the Board.

 

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Part IV

Currency

 

 

 

 

15. The unit of currency in Nigeria shall be the naira which shall be divided into one hundred kobo.

 

16. The exchange rate of the naira shall be determined, from time to time, by a suitable mechanism devised by the Bank for that purpose.

 

17. The Bank shall have the sole right of issuing currency notes and coins throughout Nigeria and neither the Federal Government nor any State Government nor any Local Government nor any other person or authority shall issue currency notes, bank notes or coins or any documents or tokens payable to bearer on demand being documents or tokens which are likely to pass as legal tender.

 

18. The Bank shall -

 

(a) arrange for the printing of currency notes and the minting of coins

 

(b) issue, re-issue and exchange currency notes and coins at the Bank's offices and at such agencies as it may, from time to time, establish or appoint;

 

(c) arrange for the safe custody of un-issued stocks of currency notes and for the preparation, safe custody and destruction of plates and paper for the printing of currency notes and disc for the minting of coins;

 

(d) arrange for the destruction of currency notes and coins withdrawn from circulation under the provisions of section 20 (3) of this Decree or otherwise found by the Bank to be unit for use.

 

 

19. (1) Currency notes and coins issued by the Bank shall be -

 

(a) in such denominations of the naira or fractions thereof as shall be approved by the President on the recommendation of the Board;

 

(b) of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.

 

(2) The standard weights and composition of coins issued by the Bank and the amount of remedy and variation shall be determined by the President on the recommendation of the Board.

 

 

20. (1) Currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.

 

(2) Coins issued by the Bank shall, if such coins have not been tampered with, be legal tender in Nigeria at their face value up to -

 

(a) an amount not exceeding forty naira in the case of coins of denomination of 10k or less;

 

(b) an amount not exceeding one hundred naira in the case of coins of denomination above 10k but not more than 50k;

 

(c) an amount not exceeding two hundred naira in the case of coins of denomination above 50k but not more than N1.

 

(3) Notwithstanding subsections (1) and (2) of this section, the Bank shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any notes of coins with respect to which a notice has been given under this subsection, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Decree, shall be redeemed by the Bank upon demand.

 

(4) It shall be an offence punishable under the provisions of subsection (1) and (2) of section 1 of the Counterfeit (Special Provisions) Decree 1984 for any person to falsify, make or counterfeit any bank note or coin issued by the Bank which is legal tender in Nigeria.

 

 

21. A coin shall be deemed to have been tampered with if the coin has been impaired, diminished or lightened otherwise than by fair wear and tear or has been defaced by stamping, engraving, mutilating or piercing whether the coin has or has not been thereby diminished or lightened.

 

 

22. (1) No person shall be entitled to recover from the Bank the value of any lost, stolen, mutilated or imperfect note or coin.

 

(2) The circumstances in which and the conditions and limitations subject to which the value of the lost, stolen, mutilated or imperfect note or coins may be refunded ex gratia shall be within the absolute discretion of the Bank.

 

 

23. The Bank shall not be liable for the payment of any stamp duty under the Stamp Duties Act in respect of its notes issued as currency.

 

 

24. The Bank shall at all times maintain a reserve of external assets consisting of all or any of the following -

 

(a) gold coin or bullion;

 

(b) balance at any bank outside Nigeria where the currency is freely convertible and in such currency, notes, coins, money at call any bill of exchange bearing at least two valid and authorised signatures and having a maturity not exceeding ninety days exclusive of days of grace;

 

(c) treasury bills having a maturity not exceeding one year issued by the Government of any country outside Nigeria whose currency is freely convertible;

 

(d) securities of or guarantees by, a government of any country outside Nigeria whose currency is freely convertible and the securities shall mature in a period not exceeding ten years from the date of acquisition;

 

(e) securities of, or guarantees by, international financial institutions of which Nigeria is a member if such securities are expressed in currency freely convertible and maturity of the securities shall not exceed five years;

 

(f) Nigeria's gold trance in the International Monetary Fund;

 

(g) allocation of Special Drawing Rights made to Nigeria by the International Monetary Fund.

 

 

25. The Bank shall use its best endeavour to maintain external reserves at level considered by the Bank to be appropriate for the monetary system of Nigeria.

 

 

26. Unless otherwise prohibited by law relating to the control of exchange, the Bank shall issue and redeem on demand at its head office, Nigeria currency against other currencies eligible for inclusion in the reserve of external assets under this Decree.

 

 

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Part V

Operations

 

 

 

27. (1) The Bank may -

 

(a) issue demand drafts and effect other kinds of remittance payable at its own offices or at the offices of agencies or correspondents;

 

(b) purchase and sell good coin or bullion;

 

(c) open accounts for and accepts deposits from the Federal, State and Local Government, and from funds, institutions and corporations of Local Government, and from funds institutions and corporation of all such Governments, banks and other credit or financial institutions;

 

(d) purchase, sell, discount and rediscount inland bills of exchange and promissory notes arising out of bona fide commercial transactions bearing two or more valid and authorised signatures and maturing within ninety days, exclusive of days of grace, from the date of acquisition;

 

(e) purchase, sell discount and rediscount inland bills of exchange and promissory notes bearing two or more valid and authorised signature drawn or issued for the purpose of financing seasonal agricultural operation or the marketing of crops, semi-manufacturing or manufacturing operation designed for export or the marketing of these products and maturing within 180 days, exclusive of days of grace, from the date of acquisition;

 

(f) (i) purchase, sell, discount or rediscount treasury bills of the Federal Government which have been publicly offered for sale and are to mature within 184 days;

(ii) purchase, sell, discount or rediscount treasury certificates maturing within such a period as may be determined by the Federal Government and specified by an instrument made by the Federal Government;

(iii) discount and rediscount project-tried bonds issued by State Governments, Local Governments, corporations owned by the Federal or State Government, being bonds which have been publicly offered for sale and with maturity not exceeding three years;

 

(g) purchase and sell securities of the Federal Government maturing in not more than twenty-five years which have been publicly offered for sale or form part of an issue which is being made to the public at the time of acquisition, so however that the total amount of such securities of maturity exceeding two years in the ownership of the Bank other than securities held in terms of paragraph (h) or held by the Bank as collateral under sub-paragraph (ii) of paragraph (k) of this subsection shall not together at any time exceeding seventy-five per cent of the total demand liabilities of the Bank;

 

(h) invest in securities of the Federal Government for any amount; and to mature at any time, on behalf of staff superannuation funds and other internal funds of the Bank;

 

(i) subscribe to, hold and sell shares of any corporation or company or debentures thereof set up with the approval of or under the authority of the Federal Government for the purposes of -

 

(i) promoting the development of money or capital markets in Nigeria or of stimulating financial or economic development;

(ii) promoting or undertaking financial, industrial, agricultural and public utility enterprises, so however that in any such case, the total value of the holdings of shares or, as the case may be, debentures to which this paragraph applies shall not at any time exceed ten times the aggregate of the Bank's paid-up capital and the general reserve fund of the Bank;

 

( j) grant advances for fixed periods not exceeding three months against publicly issued treasury bills of the Federal Government;

 

(k) grant advances for fixed periods not exceeding one year at a minimum rate of interest of at least one per cent above the Bank's minimum rediscount rate against -

 

(i) gold coin or bullion;

(ii) securities of the Federal Government which have been publicly offered for sale and are to mature within a period of twenty-five years;

Provided that no advance so secured shall at any time exceed seventy-five per cent of the market value of the security pledged and that the total of such securities held by the Bank's is within the limitation imposed by paragraph (g) of this subsection;

(iii) such bills of exchange and promissory notes as are eligible for purchase, discount or rediscount by the Bank up to seventy-five per cent of their nominal value;

(iv) warehouse warrants or their equivalent (securing possession of goods), in respect of staple commodities or other goods duly insured and with a letter of hypothecation from the owner;

Provided that no such advances shall exceed seventy-five per cent of the current market value of the commodities in question;

(v) treasury certificates issued by the Federal Government;

Provided that no advances so secured shall at any time exceed seventy-five per cent of the market value of the certificates pledged;

 

(l) purchase and sell foreign currencies and purchase, sell, discount and rediscount bills of exchange and treasury bills drawn in or on places abroad and maturing within 184 days exclusive of days of grace from the date of acquisition;

 

(m) borrow specifically under the provisions of a refinancing agreement or for any other purchase;

 

(n) issue naira-denominated notes or other forms of securities or make any arrangement in respect of outstanding foreign obligations of the Federal Government in the course of rescheduling and restructuring such obligations and for this purpose naira-denominated notes issued by the Bank shall bear the signature of the Governor of the Bank and shall, when issued bind the Federal Government to pay the principal sum mentioned in that note and the interests thereon;

 

(o) maintain accounts with central banks and other banks outside Nigeria;

 

(p) purchase and sell securities of or guaranteed by any government whose currency is freely convertible or securities issued by international financial institutions, of which Nigeria is a member, which are also expressed in currencies which are freely convertible;

 

(q) act as correspondent, banker or agent for any central bank or other monetary authority established under government auspices;

 

(r) undertake the issue and management of loans publicly issued in Nigeria by the Federal or State Governments or by Federal or State public bodies;

 

(s) accept from customers, for custody, securities and other articles of value;

 

(t) undertake on behalf of customers and correspondents, the purchase, sale, collection and payment of securities, currencies and credit instruments in Nigeria or abroad, and the purchase or sale of gold or silver;

 

(u) promote the establishment of bank clearing systems and provide facilities for the conduct of clearing business in premises belonging to the Bank;

 

(v) notwithstanding paragraph (d) of section 29 of this Decree, grant temporary advances to commercial banks within the meaning of the Banks and Other Financial Institutions Decree 1991 which participate in bank clearing in respect of temporary debit balances on their accounts at such rate of interest and under terms as the Bank may, from time to time determine;

 

(w) hold redeemable bonds for the purpose of regularising any currency exchange exercise;

 

(x) subject as is expressly provided in this Decree, generally conduct Business as a bank, and do all such things as are incidental to or consequential upon the exercise of its power or the discharge of its duties under this Decree.

 

(2) The Governor may, at any time in his discretion and by previous notice in writing lodged with the Board, decide that the powers conferred by subsection (1) of this section in accordance with the provisions of paragraph (f), (g), (h), (j) or sub-paragraph (ii) of paragraph (k) of that subsection be extended to the treasury bills and treasury certificates or the securities, as the case may be, of any State Government with which the Bank appears, as substantially to have established relationship or of banker, or to any specified treasury bills and treasury bills and treasury certificates or securities of such a State Government subject to limitation specified in paragraph (g) of subsection (l) of this section which limitations shall then apply to the aggregate value of the Federal and State Government security so dealt with.

 

(3) The bank shall have power-

 

(a) to carry out open market operations for the purpose of maintaining monetary stability in the economy of the country, and without prejudice to the generality of the foregoing, the Bank may also for the purpose issue, place, sell, repurchase, amortise or redeem securities to be known as '' stabilisation securities'' (which shall constitute is obligations) and the securities shall be issued at such rate of interest and under such conditions of maturity, amortisation, negotiability and redemption as the Bank may deem appropriate;

 

(b) to issue other forms of securities as it deems necessary for open market operations.

 

(4) The Bank shall have power-

 

(a) to sell or place by allocation to each bank any stabilisation securities issued under subsections (3) of this section;

 

(b) to repurchase, amortise or redeem in such manner as the Bank may deem appropriate, any such stabilisation securities, and any stabilisation securities repurchased by the Bank shall be extinguished and shall not constitute the assets of the Bank.

 

(5) Without prejudice to subsections (1) to (4) of this section as relates to the powers of the Bank to grant advances and make provisions for securities, the Bank may, without the exclusion of other banks, grant advances to any authority-

 

(a) for fixed periods not exceeding one year at a rate of interest which shall be at least one per-cent above the Bank's minimum rediscount rate; and

 

(b) except as prescribed in subsection (6) of this section, upon such conditions as the Bank may specify or as prescribed to ensure payment thereof with interest.

 

(6) The advances referred to in subsection (5) of this section may be granted in any particular case where a guarantee in writing is given by the Federal Government to the Bank on behalf of any such authority so however that-

 

(a) the total advances which may, subject to the provisions of this section, be granted shall not exceed an amount considered by the Bank to be adequate for the authority to commence its operations at the beginning of the crop or produce season;

 

(b) any such advances shall be secured so soon after the advances have been granted as may be agreed by the Bank (either in part or in whole) as prescribed in paragraph (j) or (k) of this subsection and the said provisions shall be so construed.

 

(7) Any advances which may be granted by virtue of the provisions of subsections (5) and (6) of this section shall be issued solely for the purpose of financing

 

(a) the purchasing and marketing operations authorised to be undertaken by any such authority by law under which the authority was established or as may be approved by the Bank; and

 

(b) with the approved of the Bank, other operations as may be incidental thereto:

Provided that any such authority may, if it so wishes, make advances to any licensed buying agent (within the meaning of any law under which the authority was established) for the purchase of produce for sale to the said authority, and provided also that the quantity of produce to be so purchased is included in the estimated tonnage of crop against which total advances are to be made by the Bank.

 

(8) Subsections (5) to (8) of this section relate to at any authority of the Federal Government or State Government or two or more State Governments including an interim authority for such purpose by any law in operation in Nigeria.

 

(9) The reference in subsections (5) to (8) of this section to the granting of advances includes a reference to the provision of credit facilities.

 

28. (1) In addition to any its powers under this Decree, the Bank may -

 

(a) require persons and institutions having access thereto, at all reasonable times, to supply in such forms as the Bank may from time to time direct, information relating to or touching or concerning matters affecting the economy of Nigeria;

 

(b) issue guidelines to any person and any institution that engages in the provision of financial services, including operators of bureaux de change, development banks, community banks, discount houses and insurance companies.

 

(2) The Bank shall take account of matters of confidential nature supplied to the Bank under this section, but where the Bank is satisfied that it is in the national interest and that the person supplying the information does not object to a proposal to publish it within a reasonable time of becoming aware of it, the Bank may, from any information in its possession, compile and publish statistical data, and anything relevant thereto, on the national economy.

 

(3) Where any person lawfully required to supply information for the purposes of this section -

 

(a) supplies information which he knows to be false or supplies the information recklessly as to its truth or falsity; or

 

(b) without reasonable excuse (the proof of the reasonableness to lie on him) fails to comply with any requirement of the Bank under paragraph (a) of subsection (1) of this section;

 

the supply or failure to supply, as the case may be, as therein provided, shall be an offence under this section.

 

 

(4) An offence under this section is punishable on conviction by -

 

(a) imprisonment not exceeding three years or with a fine not less than N100,000 or more than N1,000,000 for every false information or with both such imprisonment and line;

 

(b) a fine of not less than N5,000 or more than N20,000 for every day during which the failure to comply with any requirement of the Bank continues.

(5) A person or institution that fails to comply with any guideline issued under paragraph (b) of subsection (1) of this section shall be liable on conviction -

 

(a) in the case of an institution, to a fine of not less  than N100,000 or more than N1,000,000; and

 

(b) in the case of a person, to imprisonment for a term not exceeding three years or to a fine of not less than N50,000 or more than N100,000 or to both such imprisonment and fine.

29. The Bank shall not -

 

(a) engage in trade or otherwise have a direct interest in any commercial agricultural or industrial undertaking, except as provided in subsection (1) of section 27 of this Decree, or in any other undertaking, except such interest which the Bank may in any way acquire in the course of the satisfaction of debts due to it, and pro