The Senate Committee on Banking, Insurance and Other Financial Institutions has reaffirmed its commitment to strengthening legislative oversight of Nigeria's financial system, even as it commended the Central Bank of Nigeria (CBN) for notable progress in stabilising the economy amid global uncertainties.

Chairman of the Committee, Senator Mukhail Adetokunbo Abiru, FCA, FCIB, stated this on Tuesday during the Committee's statutory engagement with the Governor of the Central Bank of Nigeria on Wednesday in Abuja.

The meeting, convened in accordance with Sections 8(4)(a) and 8(5) of the CBN Act, 2007, provided an opportunity for the apex bank to brief lawmakers on developments in monetary policy, the financial system and other issues relating to its statutory mandate.

Senator Abiru acknowledged that Nigeria had recorded encouraging improvements in macroeconomic stability since the Committee's last engagement with the CBN in December 2025.

He noted that inflation had moderated significantly in the early part of the year, reaching 15.06 per cent in February 2026, prompting the Monetary Policy Committee (MPC) to reduce the Monetary Policy Rate (MPR) from 27 per cent to 26.5 per cent.

According to him, the easing of inflation reflected the positive impact of the monetary tightening measures implemented over the preceding eighteen months.

The Senate Committee Chairman also commended the CBN for sustaining relative stability in the foreign exchange market through improved market transparency, stronger external reserve buffers and enhanced price discovery mechanisms.

He noted that the convergence between official and parallel market exchange rates had reduced distortions, improved business planning and strengthened investor confidence.

Abiru further applauded the apex bank's efforts in enhancing financial sector resilience through stricter prudential supervision, expansion of digital financial services, improvements in payment systems and the successful implementation of the banking sector recapitalisation programme.

He, however, stressed that recapitalisation should not merely result in stronger balance sheets for banks but must translate into increased lending to productive sectors of the economy.

"Ultimately, the true measure of a stronger banking system lies not merely in larger balance sheets, but in its capacity to mobilise savings efficiently and channel affordable credit to productive sectors such as agriculture, manufacturing, infrastructure, small and medium enterprises and technology," he said.

The Committee also commended the CBN for strengthening regulatory oversight, particularly its recent supervisory actions affecting 46 Microfinance Banks, describing the measures as necessary to safeguard the integrity and stability of the financial system.

While expressing support for the apex bank's exposure drafts on the revised regulatory framework for Financial Holding Companies and ring-fencing of closely linked entities, Abiru urged the CBN to strike a balance between robust prudential regulation and operational efficiency. He said regulatory reforms should strengthen resilience without imposing unnecessary compliance burdens that could undermine the competitiveness of Nigerian financial institutions.

The Committee also subjected the CBN's 2025 Audited Financial Statements to legislative scrutiny, acknowledging the Bank's return to profitability at the Group level, regularisation of historical Ways and Means advances and securitisation of legacy obligations.

Nevertheless, lawmakers requested further clarification on several issues, including the structure and implications of the securitisation arrangements, large expenditure items, foreign securities lending transactions, the rising cost of liquidity management and the treatment of statutory remittances to the Federal Government.

In his remarks, the CBN Governor, Dr. Olayemi Cardoso, said coordinated monetary and fiscal reforms had strengthened macroeconomic stability despite persistent global risks arising from geopolitical tensions, trade fragmentation and supply chain disruptions.

The CBN Governor said, “When I last appeared before this distinguished committee in December 2025, I reported encouraging progress in inflation moderation, foreign exchange market stabilisation, external reserves accumulation, reform of market infrastructure and significant advances in the banking sector recapitalisation programme.

“I am pleased to report that the first half of 2026 witnessed the consolidation of many of those gains”. Stressing that country’s external reserves stood at $52.73 billion on July 9, 2026, compared with $48.88 billion recorded in January.