The Nation Newspaper

Category: Money

  • ‘Reforms will impact long-term finance’

    The Financial Stability Board (FSB) has said key global financial system reforms including Basel III, OTC derivatives market reforms, and changes affecting the regulatory and accounting framework for institutional investors would reinforce confidence in the financial system and enhance the availability of long-term finance.

    In an update presented to the G20 Ministers and Central Bank Governors, FSB noted that while there may be some short-term adjustment effects, the most important contribution of the financial reform programme to long-term investment finance is to rebuild confidence and resilience in the global financial system.

    According to the FSB, these reforms should substantially enhance the financial system’s capacity to intermediate investment flows through the cycle at all investment horizons.

     

     

     

  • Firm launches on-line forex

    An on-line foreign exchange company has been launched to deepen trading in Nigeria. Known as Andrey Dashin Forex Time (FXTM) Limited, the firm named after its owner, trades inforex, precious metals, commodities, shares, among others.

    In a statement, the company said it is introducing solutions tailored specifically to meet different regions including Shariah compliant areas.

    It quoted its Managing Director, Mr Andrey Dashin, as saying that efforts would be made to meet the individual needs of the people.

    Dashin said the company boasts of a team of experts, who have garnered years of experience in forex trading, adding that they would bring their experiences to bear on the job.

    He said: “My 15 years of experience in the forex industry have helped me to understand what traders want and I have established Forex Time to challenge traders’ expectations. With Forex Time, you get the advantage of trading with sophisticated, reliable and industry-leading technology, partnered with support from a team hand-picked because of their experience and knowledge in the industry.”

     

  • NIBBS laments cash-less slow pace

    The Nigerian Inter-Bank Settlement System (NIBSS) Plc has lamented the slow pace of cash-less policy in Lagos.

    Executive Director, Business Development, NIBSS, Mrs. Christabel Onyejekwe, said efforts must be made to avoid similar problems in other states where the policy would be introduced. These include Rivers, Kaduna and the Federal Capital Territory (FCT).

    She said problems such as poor awareness, among the informal sector, lopsidedness in the programmes of the banking operators, have affected the policy.

    She called for more proactive measures in the implementation of the policy in Nigeria, adding that Nigerians would accept it well in future. She said there are challenges with interoperability of networks from the telecommunications operators, urging stakeholders to tackle those challenges.

     

  • e-clearing to raise banks’ operational risks

    The commencement of cheque truncation scheme in the nation’s financial system will raise banks’operational risks, an executive of Sybrin Systems Limited, a soft-ware technology firm based in South Africa, Daniel Parreira, has said.

    Sybrin Limited provides e-clearing and other payment solutions among Africa’s leading banks, clearing houses and corporations.

    For efficiency and reduction of operational risks, he advised that banks should invest in sophisticated payment solutions, adopt fully integrated management systems as well as anti-fraud mechanisms.

    He said forward-looking banks are getting set to decentralise the cheque truncation processes to their branches. According to him, such steps would further reduce the pressure on the clearing centres.

    The Central Bank of Nigeria (CBN) had after due consultation with the banks, issued fresh guidelines to assist banks clear their cheques online. The policy is expected to provide for the regulation and management of cheque truncation in Nigeria with the view to reducing cost and days of clearing instruments. It was also meant to articulate the rights and responsibilities of presenting and paying banks in the Cheque Truncation System.

    A circular from the CBN said the policy will provide minimum technical and operational standards for cheque truncation as well as facilitate the implementation of an effective and efficient payment system in the country.

    The apex bank said it acted based on powers conferred in it in section 47 of the CBN Act No. 7 of 2007, which charged CBN with the duty of facilitating the clearing of cheques, credit instruments for banks.

    The rules apply to clearing and settlement activities in the Nigeria Bankers Clearing Houses, which practice cheque truncation system. However, where there is a conflict between the provisions of the cheque truncation guidelines and revised Nigeria bankers’ clearing house rules, the former would prevail.

     

  • Experts hail govt on reserves

    Nigeria’s decision to put 10 per cent of its $46.5 billion reserves in Chinese Yuan has been described as a wise and strategic decision by global investment experts. Other currencies in the basket are in Euros, Pounds and Riyal.

    Speaking at a trade and investment in global market forum in Lagos, Amro Zakaria, Managing Director, Market Trader Academy (MTA), based in Dubai, United Arab Emirates, said China is one of the biggest trading partners of Nigeria and as such, diversification would protect the naira from currency war going on among Japan, Europe and America. Japan’s plan to devalue its currency to give its economy a boost is being opposed by Europe and America.

    Zakaria said aside reserves diversification, Nigeria should also diversify her economy away from oil, having discovered that its biggest buyer, United States of America will achieve energy independence by 2020. He said that although the country may identify new buyers of its crude oil, the most dependable and trusted buyer, the United States of America, may not be there anymore.

    He said Nigeria’s best resource remains its youthful population, adding that with proper education, the country’s development will no longer be dependent on oil.

    Zakaria said the company is committed to educating the youth on how the global market works. He said there was need to carry the campaign to schools and higher institutions. He said there was also the need for the youth to tap into the global market and explore opportunities there. He hinged this on improvement in education and communication among the youths.

    Zakaria explained that learning about global markets and economic trends through education will afford Nigerians the opportunity to diversify their investment portfolios and to compete effectively in an ever globalised world.

    Describing Nigeria as an emerging market with lots of potential, he advised that trading and investments in global equities, precious metals, forex, etc will further empower the people and improve their chances in mitigating adverse effects caused by current and future global events.

    Also, Chief Business Development Officer, World Wide Markets Limited (WWM), based in United States of America, Steven Santamouris, who spoke on Learn to trade and invest in global markets, described World Wide Markets as one of the leading brokerage firms offering access to global markets including “exchange traded US equities.”

    He noted that clients should be armed with a true and detailed understanding of how the FX Brokerage business operates from the inside out.

    He described WWM partnership with the Market Trader Academy as strategic, saying it would provide the Academy with necessary technical expertise for traders to navigate the volatility of the markets through knowledge of those markets as well as risk management strategies.

     

  • MfBs, insurers to explore N60b micro-insurance potential

    Ahead of the release of guidelines for micro-insurance operation, micro-finance banks (MfBs) and insurance companies are contemplating how to explore the potential of the subsector said to be worth N60 billion.

    The National Insurance Commission (NAICOM) is expected to release the frameworks for the implementation of micro insurance operation in a few weeks.

    Through micro insurance, MfBs would be able to sell insurance products to those at the bottom of the pyramid. The initiative is expected to bring in more revenue and expand the markets of the insurance firms and the banks for growth.

    Insurance Commissioner, Mr Fola Daniel, said plans were underway to release the micro insurance guidelines before the end of next month to enable operators benefit from scheme.

    He said the guidelines would enable insurance operators take micro insurance policy to the grassroots where microfinance banks are major players.

    He said when the micro insurance guidelines are out soon, poor Nigerians can buy insurance at a cheaper rate. He added that the idea would ensure insurance penetration, especially in the rural areas where underwriting firms have done little to capture.

    Chairman, National Association of Microfinance Banks (NAMBs), Southwest region, Mr Olufemi Babajide, said the association is waiting for the guidelines to enable its members key into the scheme.

    Babajide said when the guidelines are out, the banks would be able to help in selling insurance products to its customers.

    He said the banks were not new to insurance, adding that they have been rendering insurance advisory services to people. He advised MfBs to tap into the opportunities offered by the micro insurance scheme.

    Babajide urged insurance companies to come up with simplified products and services that will be affordable to microfinance clients, taken into consideration the nature of the market they want to play. He said when the guidelines are able to solve technical issues relating to micro insurance products, there would not be problems in selling them.

    He said: “The issue of micro insurance is a good one. It is a positive development, and no doubt, we will embrace it with our two hands. The idea of micro insurance will help in safeguarding the investments in microfinance banks, especially in lending. For instance, we always give loans to poor people, and if their businesses suffer mishap, it will affect their repayment flow, hence making low recovery difficult. But with micro insurance, we are rest assured that our money is safe because if our customers suffer fire outbreak, theft among other risks, the underwriting firm is there to compensate them, and as a result they can repay their loans.”

    Managing Director, LAPO Microfinance Bank, Mr Godwin Ehigiamusoe, said the poor were more vulnerable to risks, adding that the impacts on them are always severe. This, he said, means that they need insurance more than the wealthy people.

    “The poor needs insurance services than even the rich people. While a financially comfortable person can access medical care, the poor cannot and in the long run, may die from preventable diseases. Based on this, the micro insurance is needed for the poor, which form the basis of micro banking activities,” he added.

     

     

     

     

     

  • CBN’s lending facility drops from N6.5tr to N1.1tr

    The Standing Lending Facility (SLF) of the CentralBank of Nigeria (CBN) has dropped from N6.5 trillion to N1.1 trillion.

    Its fall followed the rising liquidity in the system and CBN’s restrictions on the discount window.

    SLF was N1.1 trillion in the fourth quarter of last year, compared to N6.5 trillion in the previous quarter.

    SLF is an overnight fund provided by CBN to support bank’s liquidity.

    The weighted average interbank call rate, which stood at 15.50 per cent in September fell to 11.72 per cent, reflecting improved liquidity condition in the interbank funds market.

    The SLF is granted to banks at 14 per cent in line with the Monetary Policy Rate (MPR). It is available only to banks and discount houses that have executed the Nigerian Master Repurchase Agreement (NMRA) with the banking watchdog.

    The apex bank had stipulated that discount window operations in overnight facilities will be backed by borrower-holdings of the government debt instruments and other eligible securities approved by the bank.

    It said banks, while computing their cost of funds, should employ the weighted average cost of funds computation framework. The applicable cost items will include banks’ interest cost on the different types of deposit liabilities, borrowings from the inter-bank funds market, payments in respect of deposit insurance premium and costs due to reserve requirements. These restrictions have affected banks’access to SLF in the last quarter.

    In its Economic Report for the last quarter that the monetary policy rate, Cash Reserve Ratio (CRR) and liquidity ratio were maintained at their previous levels of 12, 12 and 30 per cent.

    The Net Open Position (NOP) was also retained at one per cent; money market indicators, particularly short tenored instruments were relatively stable. The bank’s discount window also remained open to authorised dealers to access both the standing deposit facility (SDF) and SLF.

    The value of money market assets outstanding stood at N6.2 trillion, an increase of 3.1 per cent, compared with 3.6 per cent recorded at the previous quarter. The development was attributed to the 5.2 per cent increase in FGN Bonds outstanding.

    At N1.6 trillion, currency in circulation rose by 21 per cent, in contrast to a decline of 1.1 per cent at the end of the preceding quarter. The development was attributed, largely, to the 21.6 per cent rise in currency outside the banking system.

    Total deposits at the CBN amounted to N7.3 trillion, indicating an increase of 6.9 per cent, compared with 6.2 per cent at the end of the preceding quarter. The development reflected the 7.5, 14.6 and 5.7 per cent increase in the deposits of DMBs, private sector and Federal Government.

    Consistent with the trends in DMBs’ deposits with the CBN, reserve money (RM), increased by 13.3 per cent to N3.5 trillion, from N3.1 trillion at the end of the preceding quarter.

    Available data from the National Bureau of Statistics (NBS) showed that estimated gross domestic product (GDP) grew by 7.1 per cent, compared with 6.9 per cent in the preceding quarter. The development was attributed, largely, to the increase in the contribution of the non-oil sectors, particularly the industrial sector.

     

     

     

     

     

  • Ex-bank workers in court

    The National Industrial Court (NIC) has fixed May 6 for the hearing of the suit filed against Zenith Bank by some of its sacked workers.

    Justice Kola Olalere adjourned the case till that date to enable the defence counsel, Obafemi Oluwole, to make some corrections in the statement of defence.

    The judge reprimanded Oluwole for making the request when it took the defendant six months to file its defence. She awarded N15,000 cost against the defendant.

    She urged the defence counsel that all corrections are made and positions regularised by February 28 in preparation for the definite hearing of the case.

    Twenty-four former workers of the bank went to court to challenge the mode of their disengagement and the basis of the entitlements paid them. They are asking the court to compel the bank to pay them N550 million which they claim it owes them.

    The plaintiffs averred that they were notified of their disengagement via e-mail and SMS messages between April 24 and 25, last year. The defendant later gave the claimants their letters of disengagement which were back dated to March 24, last year.

    This, they said, negated their conditions of service as stipulated in the defendant’s staff handbook.

    They said: “It is a claimant’s condition of service while in the defendant’s employment and the policy of the defendant that three months’ notice should be given before the termination of employment of an employee by the bank or the employee should be paid three month’s salary in lieu of the notice. Prior to their said disengagement, the claimants were not given any notice of disengagement nor were they paid salary in lieu of notice as required by their conditions of service and policy of the defendant.”

    They claimed the bank failed to consult with them or with any trade union before terminating their employment and did not apply the principle “of last in, first out” as required by their conditions of service.

    The plaintiffs said the defendant arbitrarily computed what it paid them by using an erroneous template fraught with inconsistencies contrary to what is specified in the bank’s staff handbook.

    They urged the court to order the bank to pay them their “full entitlements” because what was paid to them after their disengagement fell short of their actual benefits as stipulated in the staff handbook.

  • e-fraud data storage coming

    The Central Bank of Nigeria (CBN) will, in collaboration with the Nigeria Electronic Fraud Forum (NeFF), introduce a standard template for e-fraud data storage this year.

    Speaking at the NeFF meeting in Lagos, CBN Director, Banking Payment & System, ‘Dapo Fatokun, said the template would assist banks to assemble e-fraud data for storage and accessibility within the sector. The sector was working hard to ensure, he said, that fraud is reduced in the financial system.

    The NeFF Chairman, Emmanuel Obaigbena, said at the forum’s monthly meeting in Lagos that there was ongoing plan by banks to partner with foreign lenders to fight fraud because of the global dimension of the acts.

    Obaigbena said: “It is advisable for banks to give accurate data on fraud cases. They should not be scared of sharing statistics with each other.”

    He said the forum has already set up a committee to sanction erring banks. “The objective of this forum is for banks and the relevant agencies to share data to eliminate fraud in the industry,” he added.

    According to him, fraud not only translates to operational risk losses to banks, it erodes the confidence of the public in electronic platforms/systems as a channel for transacting business.

    He reiterated the need to protect customers from fraud cannot be over-emphasised, adding that the electronic payment system is international in nature and requires to be approached from global perspective.

    Chief Technical Officer, Digital Encode, Seyi Akindeinde, said the internet and mobile banking constitute the most frequent avenues through, which frauds are perpetrated. Also, he said, the NeFF is collaborating with the Economic and Financial Crimes Commission (EFCC) and the judiciary to effectively fight the scourge. He added that the forum was also working with Nigeria Inter-Bank Settlement System (NIBSS) to enhance the fraud reporting format in banks.

     

     

     

     

     

  • Stakeholders chide mobile money firms

    Stakeholders have berated the 16 mobile money firms for not living up to expectation a year after they were licensed by the Central Bank of Nigeria (CBN). They said the mobile money companies were still battling with the problems relating to capacity building, agent networks, and strong outlays.

    The Managing Director, Nigerian Inter-Bank Settlement System (NIBSS), Ade Shonubi, said mobile money operators are yet to realise the huge potential in the country. He said with a market worth billions of naira, what they have on ground is a far cry from their targets.

    Speaking at a stakeholders’ meeting on cash-less programme in Lagos, he said the NIBSS would continue to do its best to make all the operators in the cash-less value chain achieve their set objectives.

    Also, the Managing Director, Mobile Money Africa, Emmanuel Okogwale, said the aggregate value of mobile money companies was about N150,000 billion, stressing that the market can boast of $2 billion if the potential are well harnessed in the sub-sector.

    He advised the operators to work harder to solve the teething problems that still affect their activities, arguing that the market has the capacity to produce billion of dollars like its counterpart in Kenya.