The Central Bank of Nigeria (CBN) on Thursday released an exposure draft guidelines on shared services arrangement for deposit money banks and Other Financial Institutions (OFIs).
The objectives of the guideline include to set out supervisory expectation in respect of shared services arrangements between a parent company and its subsidiary; and to ensure that fees received or paid are a reflection of the services rendered, taking into accounts the assets used and risks assumed, amongst other objectives.
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Nigerian banks with foreign parents and banks within the non-operating financial holding company (HoldCo) participate in centralised or shared services arrangements with their parent companies and other entities in the group.
The main drivers for sharing of services among group entities are the need to ensure cost efficiencies, leverage existing expertise, and maintain consistency throughout the group.
