One of the core functions of the Central Bank of Nigeria (CBN) as enshrined in section 2(d) of the CBN Act 2007 is the promotion of a sound financial system in Nigeria. Implicit in this function is the promotion of the safety and stability of the financial system to among others, engender and sustain public confidence in it.
The CBN discharges this statutory mandate through the Financial System Stability Directorate.
In furtherance of its statutory responsibility to promote confidence in the financial system, the CBN had over the years implemented a measure of consumer protection mainly in the form of customer complaint management.
While this arrangement served to protect the rights of consumers of financial products and services, it was limited in scope as it did not address the poor level of financial literacy of some consumers of banking products and services in Nigeria. It was also handicapped by structural and manpower constraints, which limited its success. Thus, while a limited consumer protection framework did exist in the banking industry, it was inadequate. As a result, consumers’ rights were not sufficiently protected.