The Nation Newspaper

Category: Money

  • Firm sues AMCON to New York Supreme Court

    Firm sues AMCON to New York Supreme Court

    The US firmclaiming that its interests will be jeopadised ifthe Asset Management Company of Nigeria  (AMCON) proceeds to sell Mainstreet Bank Limited, Intangis Holdings, has filed a complaint for damages for tortuous interference with contract against  AMCON in the Supreme Court of the State of New York.

    In a statement yesterday, Africa Media Agency acting on behalf of Intangis Holdings, said the firm’s dispute with AMCON over the sale of Mainstreet Bank Limited and its collateral interest in Afribank, have already been adjudicated upon by the International Court of Arbitration.

    Earlier on Tuesday, Intangis Holdings, in a reaction to the issue, saidit expected AMCON, in its desire to divest from Mainstreet Bank, to allow for proper accounting procesure, by adopting the InternationalFinancial Reporting Standards (IFRS).

    In its earlier statement, it said: “This liquidation, concluded between five and eight August, 2011, harmed all Afribank’s shareholders and creditors, including Intangis Holdings. Intangis Holdings referred the matter to the International Court of Arbitration, on 29 April 2011, which issued a preliminary decision in its favour in September 2013 and took the view that Mainstreet Bank was party to the contract between Intangis Holdings and Afribank.”

    It said since that decision, AMCON has taken steps to divest from Mainstreet Bank, while omitting to make provision as required by the international accounting rules (IFRS) for certain liabilities of the bank, estimated by Intangis Holdings at $1.4 billion, adding that Intangis Holdings called for compliance with IFRS.

    However, AMCON had since distanced itself from Intangis Holdings assertion, saying its investment and interests in Mainstreet Bank Limited have no linkage whatsoever with Afribank that Intangis claimed it invested in.

  • NDIC urges banks to enhance consumer protection

    NDIC urges banks to enhance consumer protection

    Chief Executive Officer of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim has advised Deposit > Money Banks (DMBs) to give priority attention to the issue of consumer protection to promote better service delivery and increase confidence in the financial system.

    Alhaji Umaru Ibrahim gave the advice in his remarks during a courtesy visit by the new Managing Director/Chief Executive Officer of Fidelity Bank Plc., Nnamdi Okonkwo to the NDIC.

    The NDIC boss maintained that as a deposit insurer and bank supervisor, the NDIC placed great premium on consumer protection, adding that the NDIC had taken many steps to promote consumer protection through the establishment of a dedicated 24-hour toll-free Help Desk in the Corporation to enable depositors and other bank customers lodge their enquiries and or complaints for prompt investigation.

    He also informed the meeting that a Complaints Unit had been established in the Bank Examination and Special Insured Institutions Departments of the Corporation to cater for the customers of Deposit Money Banks and Microfinance/Primary Mortgage Banks (MFBs/PMBs). While advocating for conscious and concerted efforts to improve consumer protection, Ibrahim advised all the insured banks to establish consumer complaints desks at their Head Office and branches to facilitate and promote prompt response to consumer protection issues.

    He also tasked the insured banks, as members of the Bankers Committee, to show more commitment towards the adoption and promotion of initiatives such as Financial Literacy, Financial Inclusion and Sustainable Banking to engender confidence in the entire financial sector.

  • Customers file 4,142 fraud petitions against banks

    Customers file 4,142 fraud petitions against banks

    • CBN: depositors’ right to fair treatment breached

    Depositors filed 4,142 fraud related petitions against banks between March 2010 and last May, the Central Bank of Nigeria (CBN) has said.

    Director, Consumer Protection Department (CPD), CBN, Umma Dutse, said the petitions bordered on excess charges, unauthorised deductions, dishonoured cheques, cheque conversion, foreign remittances andAutomated Teller Machine (ATM) frauds.

    He was delivering a paper on “Banker/customer relationship: Expectations and Realities,” at a summit organised by the Banks Customers’ Association of Nigeria (BCAN) in Lagos.
    The theme was Value based banking: Banks and their customers.

    Dutse said the petitions were received from inception of the office when it was known as the Financial Policy and Regulation Department in March 2010 to May, this year.

    He said excess charges constituted over 50 per cent of cumulative petitions it received last month.
    Greed, poor service delivery and failure to adhere to the provisions of extant guidelines and agreements, he noted, were some of the factors that led to the petititons.

    Dutse said: “We have received many petitions where banks charged Commission on Turnover in excess of the provisions of the CBN guidelines, or where banks introduced fees that were not initially in the agreement between them and their customers. In these, and similar cases, the banks involved invariably breached the customer’s right to fair treatment.”

    BCAN President Uju Ogbunika said there was the need for banking to be conducted based on values and best practices. He explained that banking should go beyond promoting products and services, to taking steps that will boost the economy.

    Head, Consumer Protection Council, Lagos Office Tam Tamunokonbia regretted that customers often became victims of excess charges because they could not read the conditions attached to contracts. He advised lenders to respect customer’s rights to disclosure, provide written terms and conditions in simple language and legible words, adding that charges and fees should be made known to customers before opening their accounts.

  • 30 months after, cash-less banking yet to fly

    30 months after, cash-less banking yet to fly

    It came with a lot of promise, but two-and-a-half years after, cash-less banking is yet to fly. It is faced with erratic Automated Teller Machines (ATMs), Point of Sale (PoS) and internet banking downtime challenges. These, among others, have eroded customers’ confidence in the scheme, writes COLLINS NWEZE.

    Cash-less banking is two-and-a-half years old today, but the challenges confron-ting it are still there. The policy was meant to change the cash-driven economy and reduce operational costs usually passed on to customers through other means. The policy’s implementation began nationwide yesterday.

    The policy is designed to promote financial intermediation, financial inclusion, minimise revenue leakages, eliminate robbery and high cash payment and encourage electronic payment. However, feedback from customers shows that these objectives are far from being met.

    From non-working Automated Teller Machines (ATMs), debiting of customers’ accounts without payment, and poor network in the use of Point of Sale (PoS) terminals, customers have stories to tell.

    Analysts said aside campaigning for the use of alternative channels, such as the PoS and ATMs, in settling bills, the banks and CBN need to get the platforms in good working condition.

    They said Nigerians were being denied the convenience and efficiency experienced by other countries in bills payment using alternative banking channels.

     

    Banks react

    In an emailed statement to its customers, GTBank said the policy would drive the development and modernisation of Nigeria’s payments system. It said all individuals and corporate outfits will be encouraged to adopt electronic payment and other banking options.

    The policy, it added, is aimed at promoting the use of electronic-based transactions instead of cash for payments for goods, services, transfers, among other services.

    Skye Bank Plc has underscored the importance of deploying innovative technology to provide a secured and more convenient direct banking solution to its customers. In a statement, the bank said such action is to promote the cash-less policy.

    The lender has also unveiled its ‘SkyePLus’ to support the initiative.

    Speaking at the unveiling of the product, the Chairman, Skye Bank Plc, Olatunde Ayeni, said the bank had remained ahead in the area of deploying the right technology to engender seamless and flexible banking transactions for Nigerians.

    His words:“We deploy technology as best as we can as available, because we believe that banking today and tomorrow will continue to be dependent on technology. It is our belief that we need to deploy technology to be able to grow our economy as part of member of Information and Communication Technology-driven global economy.

    Also, Heritage Bank introduced the first transparent MasterCard in Nigeria to demonstrate its commitment to offering innovative e-payment services to its customers.

    Its Managing Director/Chief Executive, Ifie Sekibo said the Heritage Bank transparent MasterCard  was borne out of the bank’s commitment to offering innovative banking services in a more convenient and efficient manner to customers.

    Sekibo said: “This is the philosophy behind our e-payment services. There is more to e-payment than Nigerians are currently enjoying. We are determined to take Nigerians to new heights of e-payment services that deliver unparalleled convenience and security. That is why we introduced the first transparent MasterCard in Nigeria.”

    Group Head, e-Bank, Heritage Bank, Mr. Tobe Nnadozie, said the  MasterCard is available to new and existing customers of the bank.  “To own a Heritage Bank Transparent MasterCard is easy,” he said, adding that the card comes with no additional cost beyond the cost of applying for the average MasterCard.

     

    e-payment operators’

    position

    Visa’s Group Executive, Central and Eastern Europe, Middle East and Africa, Kamran Siddiqi, said the cash-less banking initiative is modernising the payment system and creating economic development for the country. He was in Nigeria last year to support Visa’s financial literacy and cashless payments drive.

    “Nigeria is a very important market for us. It is exciting for me to be here to support the progress Visa has made in driving financial inclusion and making electronic payments more accessible to everyone everywhere,” he said.

    He said Visa is dedicated to increasing financial literacy among the unbanked through strategic partnerships and educational programmes.

    “This was the motivation behind the recent highly successful Financial Literacy Challenge with the Co-Creation Hub. It was geared at stimulating the development of innovative web and mobile applications to teach money management skills and support the advancement of financial literacy in Nigeria,” he said.

    He noted that another of Visa’s focus areas in Nigeria and the West African region is to continue to boost tourism and cross border spend. Nigeria enjoyed a 25 per cent increase in spending by international travellers using their Visa cards in 2012.

    Also, international Visa cardholders increased tourism spending from $95.2 million in 2011 to $119.5 million in 2012. Total transactions rose 31.1 per cent from 553 747 to 727 113.

    Interswitch said the direct cost of handling, processing and managing cash across the nation as at 2009, stood at N114 billion and could have increased if the cashless policy had not been introduced.

    “The good thing we have also done as stakeholders in the e-payment industry are to also introduce solutions that would drive adoption of the cash-less policy. These solutions have been designed to address the specific needs of the ordinary Nigerian towards the adoption of e-payment,” it said.

     

    Default charges on

    deposits

    The CBN has ended the charges on excess deposits imposed by the cash-less policy. CBN Governor, Godwin Emefiele said many bank customers device means to avoid the charges, such as opening multiple accounts, a move he described as detrimental to the cashless policy.

    Consequently, he had directed that all charges on excess deposits be stopped with immediate effect, while charges on withdrawals in view of their elimination will remain sustained at the current three per cent for individual transactions exceeding N500,000 and five per cent for corporate transactions exceeding N3 million.

     

    Stakeholders’ stand

    The Association of Bureaux De Change Operators of Nigeria (ABCON) has said the removal of three percent charge  on cash deposits above N500,000 for individuals and  N3 million for corporate customers will boost depositors’ confidence on the banking sector.

    ABCON President, Aminu Gwadabe, said the CBN governor, Godwin Emefiele did the right thing by abolishing the charges during the World Press Conference on his Agenda last week.

    “The cancelation of the charges is good for the economy, will boost customers’ confidence and also enhance the achievement of the objectives of the cashless policy,” Gwadabe said.

    Under the cashless policy, the CBN imposed three percent charge  on cash deposits above N500,000 for individuals and  cash deposit above N3 million for corporate customers. However, Governor Emefiele on Thursday ordered the stoppage of the charges.

    “We have become aware of complaints by customers particularly regarding the charges being imposed for cash deposits. This has resulted in customers devising various means to avoid the charges through opening of multiplicity of accounts and other disingenuous behavior all aimed at undermining the objective of this policy. Given these outcomes and to better reflect our goal of having more cash under our control, all charges on deposits are hereby stopped with immediate effect,” Emefiele said.

    Also, banks and the Nigeria Interbank Settlement System (NIBSS) have urged Nigerians to embrace e-payment platform as the best option for settlement of business transactions.

    The NIBSS said the e-payment platforms – PoS and Instant Payment platforms have benefits of convenience safety and receipt of instant value to enable people make payments for their transactions.

    It said such transactions can be carried out using the ATMs, mobile phones, Laptops, desktops, notebooks, I-Pads, among others.

    The banks and NIBSS have also commenced a communication awareness campaign to enlighten Nigerians on the benefits of these e-payment platforms, encourage usage and adoption of these payment options.

    “Nigerians are enjoined to embrace the e-payment platforms due to their safety, reliability and efficiency. This is also coupled with the attendant security issues with making payments through cash transactions. These e-payment platforms have become globally acceptable means for financial transactions and encouraged Nigerians to adopt same for their transactions,” it said.

  • MfBs seek ways to deepen operation

    Microfinance Banks (MfBs) are looking at ways of improving their fortunes, Managing Director and Chief Executive Officer of Global Initiative Microfinance Bank Valentine Whensu has said.

    He spoke during the Nigeria Association of Microfinance Banks (NAMB) Annual General Meeting (AGM) in Lagos where he was elected the group’s president. He said capacity building, advocacy and self regulation were some of the issues to focus on during his tenure.

    The MfB chief said the group would focus on building relationships with organisations that have the capacity to either assist in ensuring proper funding or directly fund the subsector with the aim of mitigating the risk exposures.

    He said: “We will be proactive in our responses to our regulators. Our coming on board at this time also will witness the end of the delayed release of the Micro Small and Medium Enterprise fund made available to MfBs by the Central Bank of Nigeria. Our task will be to lay down the needed structure on which the funds can be accessed by any MfBs in Nigeria.”

    Director, Other Financial Institutions Department (OFID), CBN, Olufemi Fabanwo challenged the new executive to ensure that it work in the interest of its members.

    He advised the association to ensure that it worked based on its constitution as well as improve on capacity building for its members.

    Immediate past president of NAMB, Jethro Akun expressed  satisfaction with  the choice of his successor.

    Fabanwo said: “The first challenge for him is to build on what we have done, by doing more than us. Also, there is a liquidity problem that he has to face up to and overcome. He has to build on the existing relationship with our regulators.”

  • Nigeria gets GIABA’s nod to join FATF

    The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) has recommended Nigeria for membership of the Financial Action Task Force (FATF). The Ad Hoc Group on Membership (AHGM), in its report presented to the FATF Plenary for this year in Paris, recommended Nigeria, Israel, Malaysia and Saudi Arabia for membership.

    Nigeria, the only candidate from Africa, was recommended based on the size of its economy, extent of implementation of Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) measures, involvement in GIABA work and high political commitment to advancing the implementation of AML/CFT regime of acceptable international standard.

    GIABA Director-General  Adama Coulibaly expressed appreciation to the AHGM for recommending Nigeria. He said the country plays a major role in the affairs of GIABA and has been one of the regional champions mentoring other member states in the development of their AML/CFT systems.

    According to him, Nigeria is the largest contributor to the budget of Economic Community of West African States (ECOWAS), the parent body from which GIABA derives its budget, thus facilitating the effective operation of GIABA.

    He said: “GIABA is fully convinced that Nigeria’s membership of the FATF will definitely assist in advancing the frontiers of robust AML/CFT measures in West Africa. GIABA has been in constant engagement with Nigeria and the country has demonstrated commitment at all levels (political, operational/technical) to ensure that its AML/CFT regime is in line with acceptable international standards.”

    In a  statement endorsed by Stephen Oronsaye, Chairman, Nigeria Presidential Committee on FATF on behalf of the Honourable Minister of Justice/Attorney General of the Federation of Nigeria, Mr. Mohammed Adoke, Nigeria pledged its political commitment towards the ideals of FATF and the continued involvement of Nigeria in the global fight against money laundering and terrorist financing.

    The FATF will engage with Nigeria to ensure its admission. FATF is the global body that sets standard for AML/CFT efforts.

  • PayPal accepts Fidelity Bank’s cards

    Fidelity Bank Plc has announced the acceptance of its payment cards on the PayPal platform. With this development, the lender’s cardholders can now shop from the world’s major international retailers with more flexibility and convenience.

    PayPal is a global payment firm that recently entered the Nigerian market.

    Coming on the heels of the proposed nationwide adoption of the CBN’s cash-less initiative, this move is seen as part of the bank’s efforts to boost electronic payments and foster ease of transactions.

    PayPal, a global player in the e-commerce industry, offers a faster and effective means of conducting transactions over the internet and is being used by millions of customers across the world.

    Divisional Head, Electronic Banking, Adedeji Olowe who spoke on behalf of the Managing Director and Chief Executive Officer, Fidelity Bank Plc, Nnamdi Okonkwo said the introduction of PayPal is a deliberate attempt by the bank to make financial services easy and accessible to its customers.

    Olowe said that the development is in line with the bank’s commitment to consistently deploy innovative strategies to make life easier for its Customers. “We believe that our Customers will benefit immensely from this innovation, and the registration process is straightforward.

    He, however, explained that the bank would adopt a phased approach to deployment “Only shopping on international websites is available at this time, other services will be introduced in the coming months.

    While the surge in e-commerce has given rise to concerns about online security, the bank has allayed the fears of its Customers by confirming that its Cards are protected with top-notch security tools. In addition to the in-built security mechanism, Fidelity Bank’s MasterCard and VISA Cards are protected with the MasterCard SecureCode and Verified by VISA features.

  • Analysts back new capital for BDCs

    Financial market analysts have endorsed the central bank’s new capital requirements for bureaux de change (BDCs).

    According to them, the policy would help in bridging the gap between the official market and other segments of the foreign exchange (forex) market, especially the BDCs. It is also expected to strengthen the naira and halt the seeming dollarisation of the economy.
    Last week, Central Bank of Nigeria (CBN) announced a minimum capital requirement of N35 million for BDCs, up from N10 million. It also reviewed the mandatory cautionary deposit for BDCs upward to N35 million.

    The money shall be deposited in a non-interest yielding account in the CBN after the grant of approval-in-principle.

    But, the House of Representatives kicked against the policy, and invited the CBN Governor, Mr Godwin Emefiele, to appear before its Banking and Currency Committee to provide a “full brief on the policy somersault”.

    To the Head of Research at Sterling Capital Limited, Sewa Wusu, the policy would help in sanitising the BDC sub-sector.

    “What the CBN is trying to do is to monitor and ascertain the legitimate demand in the BDC segment so that they will not be spending so much in defending the naira. The premium between the BDC and official rate is still very wide and the CBN wants to bridge the gap and curtail the excesses of operators. Also, the CBN is being proactive in monitoring money laundering ahead of the 2015 elections,” Wusu explained.

    He noted that the move by the regulator clearly shows its resolve to defend the naira at all cost, saying the depletion of the forex reserves called for serious concern by all stakeholders.

    “If our forex reserves continue to come down, the international rating agencies may downgrade Nigeria’s rating which may affect us negatively,” he added.
    The Head of Investment Research at Afrinvest Securities Limited, Ayodeji Ebo, said the policy was long over due, describing it as a welcome development. To him, the move by the CBN will help in curbing infractions at the BDC segment. “In view of the capital requirement, it will reduce the number of BDCs. When you look at how the spread between the BDC and interbank has narrowed down, with the policy it is going to reduce further,” he said.

  • Jaiz Bank Board visits Emir of Kano

    Jaiz Bank Board visits Emir of Kano

    The Board of Directors and Management of Jaiz Bank Plc have visited the Emir of Kano, Muhammad Sanusi II, to congratulate him on his assumption of the throne and  extend their condolences to him over the death of  Emir Ado Bayero.

    The team was led by the lender’s  Chairman, Alhaji Umaru Abdul Mutallab, who expressed the bank’s confidence in the ability of the new Emir to help bring about needed peace and development of Kano.

    A statement from the bank quoted Mutallab as saying: “We are at the Emir’s palace to pay our homage, first to condole his royal highness over the demise of the late Emir, Alhaji Ado Bayero and to very importantly congratulate you on your new position.

    Mutallab said the team is “extremely grateful to his Royal Highness during his tenure as governor of Central Bank of Nigeria. You are instrumental in the establishment of Jaiz Bank Plc. Today, Jaiz Bank is in existence and we would continue to work stronger to deliver our unique services to all our customers irrespective of their regional or religious background.”

    He said the lender is currently witnessing acceptance, particularly from potential customers who are showing willingness to explore the services of the bank.

    Its Managing Director,   Muhammad Nurul Islam, said:  “The bank has concluded plans to advance its operational licence, spreading the banking services across the 36 states of the federation, before the end of 2014.”

    He said the bank has submitted application to the Central Bank of Nigeria for a National License and is waiting for the finally approval.

    In his words, “we have submitted our application in December 2013, it has to follow the rudiment and the normal regulations. Hopefully, we would secure the national operation license very soon.”

  • CBN to enforce zero-tolerance policy on fraudulent borrowers

    CBN to enforce zero-tolerance policy on fraudulent borrowers

    The Central Bank of Nigeria (CBN) said it will pursue and enforce zero tolerance policy on fraudulent borrowers by enhancing the operation of credit bureaux and establishing a National Credit Scoring System for the financial sector.

    Its Governor, Godwin Emefiele, who disclosed this yesterday at the Finance Correspondents and Business Editors conference in Kaduna, said such exercises remain viable means of ensuring financial stability and achieving growth in the sector.

    Represented by its Head of Research, Charles Mordi, the governor said the apex bank is equally committed to strengthening the risk-base supervision framework for the banking system.

    He said the Financial System Strategy (FSS) 2020, which is part of the Vision 20: 2020 initiative of the Federal Government is aimed at developing a coherent and internally consistent blueprint for the financial system. Such, he said, would help in achieving the vision to make the country, a major international financial hub, and one of the top 20 largest economies in the world by 2020.

    The CBN boss, however, said the key indicator in determining the pace of growth of any economy remained the Gross Domestic Product (GDP), which is the standard measure of the value of final goods and services produced in the country by firms, government and households within a specific time.

    He explained that overtime, changes in the structure of the economy as well as pattern of relative prices in the base period could render the GDP irrelevant as a gauge of economic activities in a given year.

    Emefiele said to ensure that GDP indicator approximates economic realities of the period, statisticians needed to review the weights assigned to the various component sectors that make up the GDP in the base period. This, scenario, he said, makes it imperative to update the base period, a process commonly refered to as ‘rebasing’.

    He said data from the Nigeria Bureau of Statistics shows that real GDP stands at 1990 basic prices with 19-year lag considering 2010 as new base year. He said this lag poses a significant challenge in recording the accurate economic realities over a period of time.

    “It was discovered that within the 19-year lag, tremendous growth was recorded in the telecommunication, information technology and distributive trade sectors of the economy. It will therefore be unrealistic to stick to the 1999 base year figures given such structural changes and changes in price structure over these years,” he said.

    He said the CBN has incorporated unemployment as a target variable in the monetary policy formulation. This, he added, has exposed the scope of the Monetary Policy Committee (MPC) target variables beyond the conventional price and financial stability to include gauging the misery indices of poverty and unemployment.

    He said the CBN will, henceforth, target employment-generating sectors like agriculture, Small and Medium Enterprise (SMEs), oil and gas, power and health sectors as such would confront the weak production sectors, and the embarrassing youth unemployment and huge infrastructure gap.