The Nation Newspaper

Category: Money

  • Banks lower charges to reduce customers’ burden

    Banks lower charges to reduce customers’ burden

    In line with the Central Bank’s directive, banks have started reducing charges on customers’ accounts to reduce their burden.

    Known as ‘Guide to Bank Charges,’ the initiative by the Central Bank of Nigeria (CBN) is to reduce charges seen as exploitative.

    Findings showed that many banks charge overdraft protection fees for honouring cheques that exceed the amount in a customer’s account; bank transfer fee for the transfer of money from one bank to another; credit reference fee for providing a third party with information about a customer’s creditworthiness; fee for counting coins; teller fee for interacting with tellers; safe-deposit box fee for storing items in a safe-deposit box valuable.

    There are also, the money order/cashier’s cheques charges as well as maintenance fees charged by the month or year for the maintenance of an account and fees for services like overdraft coverage and returned cheques, among others.

    The United Bank for Africa (UBA) Plc, it was learnt, has begun implementing the guideline. It has removed access fees for all electronic channels and lowered transaction fees for its range of electronic products (e-products) and services. In a statement, the bank said its gesture is meant to drive the cashless initiative and provide value added services to customers during this festive season.

    Under the plan, the bank’s customers will be allowed access transactions at significantly lower rates, across its electronic platforms such as the UBA Debit and Prepaid Cards, U-Mobile (Your Bank on your Mobile ) and U-Direct (Your Bank on the Web).

    Head e-Banking, UBA Plc, Adeyinka Adedeji, said the lender has also cancelled the N100 monthly access charge to U-Mobile and U-Direct for retail customers and removed N150,000 enrollment fee for web payment gateway installation on merchant’s website.

    Also, First City Monument Bank (FCMB) recently communicated its decision to reduce charges on online transactions to its customers.

    In an email entitled: Reduction of transaction charges on FCMBOnline, the bank slashed charges on transfers by 50 per cent, with transactions costing N200 reduced to N100; N300 to N150 and N500 to N250.

    Diamond Bank had before the cancellation of interbank ATM withdrawal fee, stopped all such fees. The lender said the move was to demonstrate its commitment towards customer satisfaction as well as its resolve to drive innovation in the industry.

    Last week’s stopping of N100 transaction fee on other banks’ ATMs by banks was seen as an initial test for the guideline, which is at its final stage of approval, a top executive in one of the commercial banks said.

    The apex bank said the guide would make it more difficult for banks to set high fees and charges without having reasons acceptable to the regulator. The CBN said banks’ drive to make inroads into the legions of the unbanked, financially illiterate and those isolated from traditional banking services through distance and hard terrain will be hampered by excessive charges.

    The source said the guideline was meant to address complaints arising from bank tariffs and other miscellaneous fees charged by banks on their customers’ accounts. He said the review was, among other things, discussed during the last Bankers’ Committee meeting in Abuja.

    He said the review was at ‘advanced stage’ and that the apex bank was working on harmonising areas to end the review.

    In a statement the CBN said complaints arising from high bank tariffs could threaten confidence in the banking system. It said in reviewing and updating the document on the charges, the CBN will be guided by, among other factors, financial inclusion, with emphasis on consumer protection, unit cost of banks, and contemporary developments in Nigeria’s banking industry.

    The banking watchdog said the guideline, which was issued to the industry several years ago, is being reviewed to protect bank customers’ interest. It lamented the practices in some banks, where products and services are deployed at exorbitant costs to the customers, saying that the high costs have helped in discouraging many people from assessing financial services.

    According to the apex bank, commercial and other banks need to be key partners in its drive for financial inclusion, even if for reasons of enlightened self-interest. In this context, there is a need to take a different approach to bank charges and fees to customers.

    Analysts said financial inclusion satisfies CBN’s needs to see a previously ignored sector of the public economy catered for and nurtured, and takes some of the heat off costs levied elsewhere on the banks’ clientele. It also opens a new sector that might be unprofitable for now but which will pay future dividends. The banks consider the time, money and effort invested in developing the so-called ‘unbanked’ market well-spent.

  • Govt to recapitalise BoA

    Bank of Agriculture (BoA) will be recapitalised by the Federal Government, the Minister of Agriculture and Rural Development, Adesina Akin-wunmi, has said.

    Speaking at a workshop on ‘Financing Nigeria’s agricultural revolution’ in Lagos, he said the bank was critical in achieving government’s agenda for the sector, especially concerning adequate funding.

    He explained that public equity funds also need to do more in funding agriculture. According to him, the World Bank has invested $500 million; African Development Bank, $250 million while Bill Gates Foundation is working with the Federal Government on advisory role to strengthen agricultural financing in the country.

    The minister said agricultural lending is promising and has moved from one per cent to over three per cent in the last one year, adding that there is an increasing demand and opportunities for agriculture funding for banks.

    He said there is need to unlock the potential in the agricultural sector adding that banks should see agricultural financing as a serious business that can impact positively on their balance sheets. He saidpublic equity funds also need to increase their stake in agricultural financing.

    Information obtained from the website of BoA described it as Nigeria’s premier agricultural and rural development finance institution, 100 per cent wholly owned by the Federal Government of Nigeria.

    The ownership structure is: Central Bank of Nigeria (CBN) 40 per cent and Federal Ministry of Finance Incorporated 60 per cent. BoA Limited is supervised by the Federal Ministry of Agriculture.

    “We provide affordable credit facilities to segments of the Nigerian society who have little access to the services of conventional banks. We accept savings deposit from customers and encourage banking habits at the grass-roots,” the bank said.

  • Approved oil benchmark to strengthen exchange rate

    The exchange rate for the naira will be strengthened by the approved oil benchmark, analysts have said. The FBN Capital, an investment and research firm explained in a report that if the oil price remains stable, which is expected, a lower threshold strengthens the defences and underpins the naira exchange rate.

    The naira at the weekend, advanced after investor inflows into a Nigerian bond auction pushed yields to a record low. The naira rose 0.2 per cent to 157.5 a dollar and has gained 3.1 per cent this year, the second best performance of African currencies tracked by Bloomberg.

    Managing Director, Blue Wall Bureau De Change (BDC), Lucky Aiyedatiwa said the naira hans been relatively stable since the beginning of the year and is expected to maintain that status in 2013.

    However, higher budget threshold would reduce the transfers to the excess crude account (ECA) and the sovereign wealth fund (SWF), which are expected to provide sufficient buffers for the economy. The National Assembly on Thursday approved an oil price threshold of $79 per barrel for the term of the 2013 to 15 medium term expenditure framework. The legislators approved a N4.98 trillion budget for next year, raising the Executive’s N4.92 trillion proposal by N63 billion.

    President Goodluck Jonathan had sent a N4.92 trillion Appropriation Bill to the lawmakers. “The House of Representatives had previously argued for $80 per barrel and the Senate for $78 per barrel. The FGN had assumed a threshold of $75 per barrel in its proposals for 2013. This was an increase from the level of $72 per barrel in the 2012 budget, an unusual step by the executive which we attributed at the time to its determination to secure a relatively swift passage into law of the finance bill,” FBN Capital said.

     

    Interbank

    Ezun Olukunle, Fixed Income & Currency Analyst, Ecobank Nigeria, said inter-bank rate fell 20 basis points to 10.5 per cent on December 19, despite provisions made for Central Bank of Nigeria (CBN’s) Wholesale Dutch Auction System (WDAS), treasury bills and the monthly government bonds auction.

    According to him, recent rise in interbank rate was due to ongoing CBN’s liquidity management adding that Open Market Operations (OMO) bills of N273.1 billion were sold between 10 and 13 December. He said the CBN’s liquidity management remains active and supported by the circular issued on 1 August tightened currency and the MPC’s decision to leave the MPR unchanged at 12 per cent on 20 November. However, call/overnight and 7-day money market rates fell 10.5 per cent and 10.95 per cent respectively while the 3-month Nigeria Interbank Offered Rate (NIBOR) also fell 12.87 per cent, though less activities were done on the tenor.

     

    SWF

    Nigeria’s $1 billion sovereign wealth fund will start making investments in March after receiving board approval. “We’ll start all the securities investing by March” for the Fiscal Stabilization Fund and the Future Generations Fund, Uche Orji, chief executive officer of the Nigeria Sovereign Investment Authority, told Bloomberg. For the Infrastructure Fund, “we’ll start investing in the second half of 2013.”

    Nigeria set up a wealth fund in May last year to invest savings made from the difference between budgeted oil prices and actual market prices. Africa’s most populous country of more than 160 million people relies on crude exports for more than 90 per cent of foreign income and about 80 per cent of government revenue, making it vulnerable to swings in prices.

    The wealth fund will help meet budget shortfalls in the future, provide dedicated funding for development of infrastructure and keep some savings for the future generation, according to the law establishing it.

     

    Fraud control

    Come next year, the Central Bank of Nigeria (CBN) in collaboration with the Nigeria Electronic Fraud Forum (NeFF) will be introducing industry-wide software that will assist banks control frauds.

    Speaking at the NeFF Annual General Meeting held in Lagos, CBN governor, Sanusi Lamido Sanusi said taming frauds in the banking system is critical to development of the sector adding that the Forum was set up for that purpose. Sanusi, who was represented by CBN Director, Banking and Payment Systems, ‘Dipo Fatokun said the software will be domiciled at Nigeria Interbank Settlement System (NIBSS) adding that the software is the regulator’s way of achieving a proactive tactics in addressing frauds.

    “The Neff is a collaborative effort. The purpose of this forum is to reduce frauds in the banking system. The CBN is working with NIBSS and other operators to ensure that come next year, we will have a software that is domiciled at NIBSS that will proactively, address the issue of fraud in the entire industry. It will not only be preventive but proactive. We want industry-wide software to address frauds,” he said.

     

    ATM charges

    Deposit Money Banks last week, stopped all interbank charges for Automated Teller Machines (ATMs). The CBN had last month, agreed to put a stop to all charges associated with the use of ATMs. The agreement was the highpoint of a meeting between the Bankers Committee made up of Chief Executive Officers of commercial banks, directors and top officials of the CBN and NDIC. Before now, account holders had been made to pay a flat rate of N100 per withAdrawal any time they used other banks’ ATMs.

    Some of the banks visited by The Nation last week had complied with the directive. At Ecobank Nigeria, FirstBank, Diamond Bank, Access Bank, Guaranty Trust Bank, branches in Lagos there were full compliance.

     

    Unified currency

    The central banks of West and Central Africa are considering combining their currencies, Lucas Abaga Nchama, governor of the Bank of Central African States, has said.

    According to the West African and Central African CFA francs are currently separate currencies that are both pegged to the euro. Merging them would boost trade and help fight money laundering, Nchama said. The franc zone covers 14 African countries, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo Republic, Equatorial Guinea, Gabon, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.

    Six other West African nations namely Nigeria, Ghana, Sierra Leone, Gambia, Guinea and Liberia — plan to enact a common currency, known as the Eco, by January 2015, 12 years behind an initial target, Temitope Oshikoya, chief executive officer of the West African Monetary Institute, said.

     

    Tenure for audit committee

    The tenure for audit committee should be increased from one year to three years of two terms to achieve better result and promote continuity, National Coordinator, Independent Shareholders of Nigeria (ISAN), Sir Sunny Nwosu has said.

    He spoke at the 2012 Annual Audit Committee Roundtable held in Lagos. According to him, those elected into the audit committee should report to the shareholders adding that some companies discourage people that can interpret account statements from joining the committee where there are sinister motives.

    He also said that the Companies and Allied Matters Act (CAMA) needs to be amended to address pressing issues that hinder auditors from carrying out their responsibilities effectively

    Chairman, Audit Committee Institute of Nigeria, Christian Ekeigwe also said that CAMA has to be reviewed to check management excesses and protect the interest of all shareholders and other stakeholders.

    He advised investors to be careful in choosing companies to invest in, saying they should choose those companies that have developed the right governance environment. “Good governance is a control against fraudulent financial reporting. Firms with good governance would have enterprise risk management framework that helps deter and detect fraudulent financial reporting,” he said.

     

    Agric funding

    The Nigerian agricultural sector has attracted $8 billion foreign direct investment (FDI) in the last one year, Minister of Agriculture and Rural Development, Adesina Akinwunmi has said.

    Speaking at a workshop on Financing Nigeria’s Agricultural Revolution organised by the Securities and Exchange Commission (SEC), he said that agricultural lending is promising and has moved from one per cent to over three per cent in the last one year.

    He said there is need to unlock the potentials in the agricultural sector adding that banks should see agricultural financing as a serious business that can impact positively on their balance sheets.

    He said that public equity funds also need to increase their stake in agricultural financing.

    He said that Nigeria Incentive Based Risk Sharing for Agricultural Lending (NIRSAL) which allows bank to share the risk associated with lending to the sector as provided by the Central Bank of Nigeria (CBN).

    The apex bank is equally considering an intensive performance rating for all commercial banks to determine their effectiveness of lending to agriculture. To achieve this, the apex bank has set aside, N75 billion allocated for the full implementation of the NIRSAL project.

    The CBN has also recently set new rules for lending to the agricultural sector of the economy. The apex bank took the decision after reports from banks and discount houses indicated that lending to the subsector remains a high-risk, which should be followed with caution.

     

    Cashless policy

    With an estimate of N3.5 trillion circulating yearly within the unbanked and under-banked (constituting over 10 million traders), the Institute of Chartered Accountants of Nigeria(ICAN) has urged the Central Bank of Nigeria to extend the cashless policy outside Lagos to bring more cash into the system.

    In addition, the institute said spreading the policy outside of Lagos will help the government in its anticorruption and anti-money laundering campaign. Addressing the institute’s 17th Association of Accounting Technicians (AAT) annual conference, ICAN President, Mr Adedoyin Owolabi said when cash remains outside the banking system ,the ability of banks to create credit and supply productive capital to the economy will diminish.

    His words: “Bringing cash into the banking system produces an equal increase in bank reserves, enabling banks to facilitate more consumer and commercial loans, thereby stimulating consumption and business growth.”He stressed that the institute supports the cashless policy not only because it can promote transparency of transactions through the provisions of audit trails but also because it can increase the size of the informal economy and access by government to loanable funds.

     

    Bank to bank report

    First Bank of Nigeria Limited (FirstBank) assured its customers of enhanced services across its networks nationwide. In a customers’ forum held in Lagos, the bank had highlighted its new products and services, including e-business services, alternative channels, and the various transformational initiatives of the Bank over the past one year.

     

  • SWF will hasten infrastructure devt

    SWF will hasten infrastructure devt

    The creation of the Sovereign Wealth Fund (SWF) presents an opportunity for the government to fund infrastructure, the Managing Director, Stanbic IBTC Holdings Plc, Mrs Sola David-Borha, has said.

    Speaking at the Fourth Christopher Kolade Symposium hosted by the Nigerian Leadership Initiative (NLI) in Lagos, she said infrastructure stimulate growth.

    The Federal Government requires N16 trillion to provide infrastructure in the country, she said.

    According to her, the economy is growing but not as fast as expected because of inadequate infrastructure.

    Mrs David-Borha said Nigeria can achieve 30 per cent efficiency by getting the power sector right. “Infrastructure is enabler for growth and the sooner we learn about that the better,” she said.

    She said that corporate governance in the banking system has improved, adding that there is no country with a perfect system.

    The Central Bank of Nigeria (CBN), she said, took bold steps in that direction, adding that more still needs to be done to get better results.

    “Corporate governance practice has improved in the country. Although more work still needs to be done, there has been great improvement,” she said.

  • Framework on agency banking coming

    A framework that will define the mode of operation for agency banking would be out before year end, The Nation has learnt.

    Speaking at the Enhancing Financial Innovation and Access (EFInA) forum in Lagos, Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi said the CBN Committee of Governors was fine-tuning the draft exposure of the agency banking.

    He said issues relating to some agents, type and nature of agents including considerations for super agents are critical areas being considered in the draft exposure.

    He said the processes for this line of banking to become functional will be finalised by this year-end.

    Sanusi said there have been improvements in the payment system, including the drive for financial inclusion.

    He said lenders have to address the need for special products that consider women and the handicapped to ensure that everyone is carried along.

    Sanusi said agency banking provides financial services to the widely dispersed population at affordable price and has assisted some countries in decongesting existing customers from crowded branches.

    He added that it would serve the same purpose in Nigeria.

    According to him, agency banking provides financial services by a third-party agent to customers on behalf of a licenced, prudentially-regulated financial institution.

  • Experts decry slow pace of mobile money market

    EXPERTS have attributed the slow pace of growth of the mobile money market system to the poor commitment by operators and regulators.

    The experts, drawn from the banking, and telecoms industry, identified lack of commitment as bane of the industry.

    Head of Payments and Mobility, Accenture Nigeria, Mrs. Henrietta Bankole-Olusina, said mobile money operators and their regulators need to show more commitment, to attract investment and drive the industry.

    She said one year after the Central Bank of Nigeria (CBN) licensed the 16 mobile money operators, the sector is yet to appreciate the policy.

    She stated that the success of mobile money services, acceptance of the services by the rural dwellers and investment in mobile payment infrastructure, would only come when people realise the opportunities inherent in that industry.

    “Capital would always go to where there is an opportunity. Mobile money subscribers far outnumber Personal Computer users and the banked in Nigeria; a great opportunity the providers have failed to utilised,” she added.

    She decried the approach of the operators, noting that if they continued to target only the banked, then the unbanked that were the main crux of the initiative would not be captured.

    Also, Pagatech’s Chief Executive Officer, Mr Tayo Oviosu, observed that in view of the poor and unbanked number of Nigerians, the mobile money payment should have a wider coverage than it does now.

    He, however, linked the inability of some mobile money firms to roll out services to poor funding, technology challenges and limited distribution channels, among others.

    The President, Institute of Software Practitioners of Nigeria, Mr Chris Uwaje, also said certain loopholes must be addressed for the mobile money service to be successful.

    “There are lots of things we cannot go to the market and buy, one of those things are good policy and strategy instrument. We need them. We always find ourselves running without equipment, so we need to equip ourselves with what we need to run with,” he said.

  • ICAN harps on credible data

    Accountants have been urged to generate credible financial reports that will present a true state of public and private institutions.

    In a communiqué at the 42nd Annual Accountants’ Conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja, participants also noted that the economy would function properly when participants have trust in the financial statements that drive activities and decisions in the capital market.

    It noted that the problems of the nation‘s uninspiring pace of development, is attributed to the absence of strong institutions and professionals who give high regards to corporate governance.

    The conference recommended that accountants should play a more active role in public governance. It urged the Institute to regularly relevant stakeholders in advocating good governance, principled leadership, institution-building and fiscal discipline.

    It urged the institute to ensure that its members hold to the highest level of professional standards and integrity and apply big stick where members act fail to adhere to rules.

  • ‘Review audit committee tenure’

    ‘Review audit committee tenure’

    The tenure for audit committee should be increased from one to three years of two terms to promote continuity, National Coordinator, Independent Shareholders of Nigeria (ISAN), Sir Sunny Nwosu, has said.

    He spoke at the Annual Audit Committee Roundtable in Lagos. According to him, audit committee members should report to the shareholders, adding that some firms discourage people who can interpret account statements from joining the committee where there are sinister motives.

    He also said the Companies and Allied Matters Act (CAMA) needs to be amended to address pressing issues that hinder auditors from carrying out their responsibilities effectively

    Chairman, Audit Committee Institute of Nigeria,Christian Ekeigwe, also said CAMA has to be reviewed to check management excesses and protect the interest of shareholders and other stakeholders.

    He advised investors to be careful in choosing companies to invest in, saying they should choose those companies that have developed the right governance environment. “Good governance is a control against fraudulent financial reporting. Firms with good governance would have enterprise risk management framework that helps deter and detect fraudulent financial reporting,” he said.

    He said the Audit Committee Institute is spearheading initiatives to improve the committee effectiveness with the establishment of its Centre for Audit Quality, which will focus on helping organisations and their internal n external auditors to improve the quality of audit judgments as a means of improving the quality of financial reporting process.

    Ekeigwe said audit committee is a key pillar of corporate governance, explaining that in advanced capital markets, regulators have imposed heavy gate-keeping responsibilities on audit committees. He said the Financial Reporting Council Act 2011 recognises the importance of Audit Committees in cooperate governance and there is need to explore the dimensions of audit committee responsibilities to ensure they fulfill their duties diligently.

    He added that shareholders have a right to expect that Audit Committees are working for their interests because when that happens, shareholder value is protected.

    He said when shareholders’interests are protected, it becomes easier to attract investments that create jobs and wealth for the economy. He called for reforms in many aspects of corporate governance and audit committees regime, financial reporting value chain as well as audit firm governance.

    Soon, professional bodies and audit firms will be invited to affiliate with the CAQ, in the quest for reassuring audit quality and preventing audit failure.

    Nwosu said there is need to ensure that those elected into the audit committee report to the shareholders.

    He said the CAMA should be reviewed and brought up to date for companies to make progress.

  • MDAs to implement new accounting rules in 2013

    Ministries, Departments and Agencies (MDAs) will start implementing the International Public Sectors Accounting Standards (ISPAS) from January next year, the Accountant-General of the Federation Mr Jonah Otunla has said.

    Speaking during the Ninth Financial Reporting Council (FRC) Summit in Lagos, Otunla said the aim is to reduce abuse of public funds and encourage the good corporate governance.

    He said with the new accounting standards, the government will be able to know and record income when it is received, adding that It will also help in recording expenses when cash is paid out for certain developmental projects.

    ISPAS is a set of high quality independently developed accounting standards aimed at meeting the financial reporting needs of the public sector.

    The idea, he said, would serve as an alternative to the International Financial Reporting Standards (IFRS) conceived for privately quoted entities globally.

    He said the International Public Sectors Accounting Standards Board (ISPASB), United States developed the standards, adding that it has been adopted by governments in the developed economies to ensure uniform, strong and effective management of public funds.

    Also, a partner with Deloitte, an accounting firm, Mr Uwadiae Oduware, said the government is committed to the implementation of the international public sectors accounting standards to encourage good fiscal management and subsequently block loopholes through which funds are stolen from the public purse.

    He said the government through the Office of the Accountant-General of the Federation (AGF) has communicated the issue to agencies of the Federal Government.

    He said the adoption of the standards was long overdue because other countries, including Benin Republic, Ghana, and Kenya had long adopted ISPAS to foster growth.

    He said at the end of the implementation of the standards, the government hopes to deliver to the nation, a Standardised Uniform Chart of Accounts, Budget and General Purpose Financial Statements that will meet international best practices as required by ISPAS.

    Oduware said users of government’s financial statements would see more transparency, accountability and integrity in the statements when the standards would have been adopted next year.

    He said the ISPAS cash basis will be implemented with effect from the 2013 financial year, while the ISPAS accrual basis will come into operations in 2015.

    ISPAS accrual basis is the accounting method that in which each item is entered as it is earned or incurred regardless of when actual payments are received.

    He said the standards would build confidence of donor agencies, improve service delivery, enhance public-private partnership, and boost peer review mechanism of financial reports of the three-tiers of governments and governments of other countries.

    Other benefits of the adoption are better access to financing through either bond releases or international financing from organisations, such as the International Monetary Fund (IMF) and the World Bank.

  • ASO Savings donates to Ogoniland

    ASO Savings & Loans Plc, has donated N15 million to the Hydrocarbon Pollution Restoration Project (HYPREP) to support the proposed clean-up exercise of oil spills in the Ogoniland, Rivers State.

    The cheque, which was presented by the Managing Director of ASO Savings & Loans Plc, Mr Hassan Musa Usman, was received by the Permanent Secretary, Federal Ministry of Petroleum Resources, Ambassador Abdulkadir A.Musa at his office in Abuja.

    Usman said the donation is for the erection of a Call Center and procurement of Overhead Tanks specifically in the affected areas in Ogoni land. “This is to help support the ongoing plans for the cleanup of oil spills in Ogoni, Rivers State. I pledged my organisation’s commitment to supporting HYPREP in their noble initiative of ridding the region of the degradation and pollution caused by oil spills in the State,” the mortgage finance expert explained.

    Expressing gratitude at the gesture, Ambassador Abdulkadir A.Musa commended ASO for their support and called on other Corporate Organisations to support the government’s initiative by joining the cleanup campaign.

    Explaining how the funds will be expended, the National Coordinator for the project, Mrs Joy Nunieh-Okunnu, said out of the N15 million donated by the bank, N10 million would be spent on overhead tanks while the balance would be used to construct an emergency call centre for HYPREP.