The Nation Newspaper

Category: Money

  • CBN recovers N5b wrong bank charges

    The Central Bank of Nigeria (CBN) has recovered over N5 billion which it said was wrongly taken from customers as bank charges.

    Deputy Governor of the CBN, Kingsley Moghalu, disclosed this during an interactive session with the Senate Committee on Banking, Insurance and Other Financial Institutions in Abuja.

    He said the CBN has worked out a strategic framework to prevent bank failures in the future.

    He listed the strategic priority of the CBN for the financial sector, between now and 2015, to include macro prudential framework, consumer protection and data integrity.

    Moghalu said: “Do the reforms mean that we have come to the end of history and there will no longer be any bank failures in Nigeria?

    “I will not be responsible if I give you that type of assurance because we do not know the future.

    “However the much we can see, we have tried to take care and in addition we have tried to put in place a number of safe guards to take care of contingent situations that may not be foreseen.

    “By putting in place systems of risk management and very importantly, moving to the area of macro prudential supervision and regulation of the banking system,” he said.

    According to him, the CBN believes that the consumers of financial products need a far higher level of protection that has been the case in the past, adding that the apex bank was aware of complaints of all sorts of inappropriate bank charges and had taken a number of steps to begin to address the problems, systemically.

    “I can tell you that in the last year or two, the CBN has been able to recover N5 billion in wrong charges to bank customers.

    “Those monies have been returned to Nigerians by their banks at the directive of the CBN in the course of our work in consumer protection,” he said.

    He added that the apex bank wants to ensure that all the data received from banks are completely accurate with no room for errors.

    He said the CBN has made significant progress in stabilising the financial sector.

    “The establishment of the Asset Management Corporation of Nigeria (AMCON) has helped in no small measure to stabilise the Nigerian banking system,” he said.

    He said the CBN has to stop banks from giving further loans to customers owing up to N5billion.

    He said the step was meant to prevent AMCON from becoming a moral hazard.

     

  • AMCON okays bridged banks’ performances

    DESPITE the delays in selling the three bridged banks to investors, the Asset Management Company of Nigeria (AMCON) has given them a clean bill of health.

    The banks are Mainstreet Bank Limited, Keystone Limited and Enterprise Bank Limited.

    Speaking to The Nation yesterday, AMCON Managing Director Chike-Obi said the banks are safe, adding that his organisation was making efforts to sell them and put them on a sound footing.

    He said the intention to list the banks on the floor of the Nigerian Stock Exchange (NSE), the appointment of Ctibank Nigeria and Rennaisance Capital as advisers, among other options prepared to facilitate the sale of the banks, did not mean the banks are not secured.

    He said: “As far as I’m concerned, there are no more problems in the three banks. The appointment of the two advisers to appraise the values of the three banks that were nationalised last year does not mean that they are still battling withc problems, such as assets/loan portfolios. We have done everything possible to ensure that the banks are free of problems. Our efforts have yielded results as the banks recovered huge toxic assets and provided sound risk management policies, among others.”

    He said AMCON was awaiting the results of the valuations of the banks before taking the next line of action.

    On the proposed listing of the banks, the AMCON boss said it was immaterial to think about whether the banks would be given considerations by investors in case they were listed on the NSE.

    He said it would amount to speculations to think about whether the investors would patronise the banks if they eventually get listed on the NSE, adding that there is no need of thinking about such issue now.

    “It is wrong to speculate about the banks. We have put in place several options to sell the banks, and one of them is proposed listing of the banks.

    “We appointed advisers for the banks three months ago. They would tell us what happen when they finish the evaluation of the banks. Right now, we do not know the fate of the banks,” he said.

    Similarly, a market analyst, Mr Tayo Bello, said nothing could be grevious than to say the banks that are still enmeshed in financial crisis. Bello, a lecturer at Babcock University, Ogun State said the balance sheets of the banks have been cleaned to prepare them for sale.

    He said the tendency is high that the three banks would get investors when the right time comes, adding that they appear to be in good financial position.

    He said the stock market is rebounding, arguing that it would not be difficult to get investors for the banks if the plans to list them scaled through.

  • CIBN honours CBN deputy governors, others

    Two Deputy Governors of Central Bank of Nigeria (CBN), Managing Director/Chief Executive, Nigeria Deposit Insurance Commission (NDIC) and eight bank executives are among key operators who would be conferred with the Fellowship of The Chartered Institute of Bankers of Nigeria (CIBN) on Saturday, October 20.

    Among eminent bankers to be honoured at the Institute’s Fellowship Investiture include, Sarah Alade and Suleiman Barau, both CBN Deputy Governors. Also to be honoured are NDIC boss, Umaru Ibrahim; Managing Director, Ecobank Transnational, Arnold Ekpe, First Bank CEO, Bisi Onosanya; Diamond Bank CEO, Alex Otti; Others are CEOs of Skye Bank, Sterling Bank Plc, Unity Bank, Union Bank, United Bank for Africa, among others.

    A statement from CIBN said out of the 79 awardees to be invested at the event, 11 would receive Honorary Fellowship award while 68 Associates of the Institute will be conferred with Fellowship.

    CIBN president, Segun Aina, will be the Chairman of the occasion while ‘Debola Osibogun First Vice President will be the Chief Host supported by Uju M. Ogubunka, Registrar.

  • Enterprise Bank CEO tasks inspectors on e-payment fraud

    THE confidence of Nigerians on the usage of electronic payment systems is dependent on the control measures taken by banks’ auditors to prevent e-fraud in the financial services sector, Managing Director, Enterprise Bank Limited, Ahmed Kuru has said.

    Speaking at the quarterly meeting of the Committee of Chief Inspectors of Banks in Nigeria (CCIBN), which the bank hosted in Lagos recently, Kuru, who was represented by Nneka Onyeali-Ikpe, an Executive Director of the bank, disclosed that more Nigerians would embrace the e-payment system as the country migrates to a cashless economy. However, he said that lenders should guarantee the safety customers’ money.

    Describing e-fraud as a crime that affects the society as a whole and impacting adversely on individuals, businesses and governments, the bank CEO maintained that recent studies showed that e-fraud has increased as more bank customers key into the cashless banking initiative.

    He challenged the CCIBN to always be a step ahead of fraudsters to check the rate of electronic fraud in the country. He also called for collaboration among stakeholders to check the menace.

    Kuru suggested that development of effective controls by banks especially in data security, maintenance of efficient joint industry database on e-fraud for knowledge sharing, collaboration with local and international agencies on fraud control mechanisms among other measures will assist banks address e-payment frauds in their respective institutions.

    He further charged the chief inspectors to regularly perform employee background checks, conduct fraud awareness trainings, make vacations mandatory for staff and segregate duties among staff members as these would assist banks check e-frauds in the financial services sector.

  • IMF approves $1.1b for low-income countries

    THE International Monetary Fund (IMF) has approved the distribution of SDR 700 million (about US$1.1 billion) in reserves attributed to windfall gold sales profits to its members in order to boost its concessional lending capacity for low-income countries during the global crisis.

    The distribution according to a statement from the Fund, is a key element of a 2009 plan to boost concessional lending capacity to US$17 billion over the five years to 2014. The decision authorising the distribution was taken by the Executive Board in February 2012. It will however, become effective only after IMF members have provided satisfactory assurances that new amounts equivalent to at least 90 per cent of the amount distributed—i.e. SDR 630 million—would be transferred or otherwise provided to the IMF’s concessional lending vehicle, the Poverty Reduction and Growth Trust (PRGT). The 90 per cent threshold has been reached with assurances received from the countries listed below, meaning the distribution can now take place.

    The IMF will continue to seek contributions from remaining members in order to maximise concessional lending capacity. In addition, as agreed on September 28, the Fund is starting a process for seeking assurances on a separate distribution of the remaining gold sales windfall profits of US$2.7 billion.

    “This is a wonderful achievement that demonstrates our members’ determination to ensure the IMF has the wherewithal to support its low-income members through this crisis,” IMF Managing Director Christine Lagarde stated. “For many countries this process has involved complex legal or legislative steps, and it is a tribute to our membership that we have arrived at the required level in just a few months.”

    Because gold sales profits are part of the IMF’s general resources available for the benefit of the entire membership, they cannot be placed directly in the PRGT, which is available only to low-income member countries. Accordingly, using these resources for PRGT financing required a distribution of the resources to all IMF member countries in proportion to their quota shares, on the expectation that members would direct the Fund to transfer these resources (or would provide broadly equivalent amounts) to the PRGT as subsidy contributions. The resources raised through the operation will count towards the 2009 package’s target of raising an additional SDR 1.5 billion (US$2.3 billion) in PRGT subsidies. The balance is being raised from other sources, including additional bilateral contributions which the IMF continues to seek from member countries.

    The IMF sold 403.3 metric tons of gold in 2009-10 as part of a plan to ensure the long-term financing of the IMF’s day-to-day operations through the creation of an endowment using anticipated gold sales profits of some SDR 4.4 billion (US$6.8 billion). High world gold prices during the sales period, over and above the US$850 an ounce envisaged when the sales were originally planned, generated “windfall” profits of some SDR 2.45 billion (about US$3.8 billion). The first SDR 700 million of those windfall profits will be now distributed to the membership in proportion to their IMF quota shares.

  • Revenue chief advocates harmonisation of tax laws

    Revenue chief advocates harmonisation of tax laws

    Director at the Federal Inland Revenue Service (FIRS), Samuel Ogungbesan, has called for the harmonisation and coordination of all tax legislations and their codification into one supreme document.

    Doing so, he said, means putting all tax issues on the same page. “Without this, there will always be uncertainty in the law and the implementation thereof. When a country has clear laws, it makes it easier for companies to want to come and invest because they know that there is certainty, fairness and trust between themselves and the law,’ Ogungbesan said at the Ernst & Young tax conference, held in South Africa.

    He said large multinational companies contribute 80 per cent to the country’s revenue and occupy only three per cent of the existing business space. This, he said, emphasises the need to strengthen the Transfer Pricing (TP) laws, as tax administrations are aware that effective transfer pricing rules are key to ensuring that multinationals report and pay tax on the correct proportion of profits they make.

    He disclosed that Nigeria has released the TP regulations and would soon be signed off by the Federal Minister of Finance and the Attorney-General for it to become law.

    The FIRS Director, also called for reforms in the Nigerian tax system to enhance stability of the sector.

    He said the FIRS is re-engineering Nigeria’s tax systems to ensure there is transparency, understanding and certainty on legislation and practice when doing business in the country.

    He explained that tax matters need to be made easy to administer, given the important role they play in the economic and national development of the country. “We need to increase our tax base and have an extensively high measure of predictability in order to attract investments,’ he said, in a statement.

    He said Nigeria, with its 37 state tax authorities, still has a lot to learn on taxation. However, he explained that Nigerian tax system has undergone significant changes in recent times, with the laws being reviewed for simplicity.

    He said a new National Tax policy has been drafted, awaiting government’s approval. “The policy, which will be enforced by the Federal Ministry of Finance, calls for standardisation between tax law and practice across all tiers of government. It also provides for exchange of information and statistics across all spheres in order to keep tabs on taxpayers, “he said.

    The policy, he stated, will facilitate coordination between all agencies of government and harmonise the laws and practices across State Internal Revenue Boards.

    On the rationale for the conference, Abass Adeniji, Partner, Tax, Ernst & Young, said the annual event was designed to showcase the firm’s strength and expertise as well as integration to its existing and potential clients, globally.

    According to him, Africa Tax Conference provides an opportunity to demonstrate how connected Ernst & Young is as a single firm through- out the sub area.

  • LCCI worries about influx of short-term investors

    The increasing number of short-term investors bringing in “hot money” is a risk for exchange rate volatility, the Lagos Chamber of Commerce and Industry (LCCI) has said.

    In a statement, LCCI President Goodie Ibru said the risk of sudden reversal or pull-out of such funds would adversely affect price and financial market stability. “Hot money” refers to funds that are controlled by investors who actively seek short-term returns.

    Ibru said there has been a steady decline in aggregate credit to the economy and the private sector, adding that the aggregate net credit by banks to the domestic economy fell by 2.7 per cent and 0.1 per cent in the first and second quarters of the year.

    This, he said, was largely due to the sustained monetary tightening, significant rise in government domestic borrowing, attractive yield of government bonds and treasury bills.

    “The tight monetary policy stance continues to keep funds out of the reach of the private sector. With the planned issue of Treasury Bills to absorb all maturing securities in the fourth quarter, liquidity is expected to remain tighter with the private sector at the receiving end,” he said, adding that in the last nine months, industrialists have seen a steady decline in discretionary spending by households and firms, weaker uptake from suppliers and distributors and softer operating performance, among consumer goods companies.

  • CIBN, regulators collaborate

    CIBN, regulators collaborate

    The Chartered Institute of Bankers of Nigeria (CIBN) is partnering with key stakeholders and institutions to ensure that the banking sector attains the highest level of professionalism.

    A statement from the Institute said it would continue to partner with the Central Bank of Nigeria (CBN), and Economic and Financial Crimes Commission (EFCC) to ensure that bankers do their work diligently.

    The Institute also said it was partnering with Unity Bank Plc and other government and private bodies within and outside the country to take the Institute and the banking profession to greater heights.

    The President/Chairman of Council of the Institute, Mr Segun Aina, stressed the need to partner with relevant stakeholders on capacity building and training of staff in the banking industry as well as other sectors of the economy in order to enable the country realise her millennium goals aspiration. Aina spoke during the Institute’s dialogue with key stakeholders in Abuja.

    He urged EFCC, CBN and Unity Bank to engage the services of the CIBN Practice Licence holders and other well experienced professional bankers for their consultancy services, debt recovery, forensic audit, training and other services.

    Aina asked EFCC to support the establishment of commercial courts to fast-track cases involving banks and their customers as well as enforce the Dud Cheque Offences Act to checkmate dud cheque crimes.

  • ‘Credit bureaux ’ll reduce loan default’

    ‘Credit bureaux ’ll reduce loan default’

    The services of credit bureaux are central to reducing the rate of non-performing loans, the Bank Director Associat-on of Nigeria (BDAN) has said.

    BDAN’s President, Sonny Kuku, said the bureaux would complement the on-going banking reforms of the Central Bank of Nigeria (CBN), adding that the increased use of services of credit bureaux will enable banks to create cleaner balance sheets.

    He said: “We have devoted the 2012 edition of the annual BDAN Stakeholders Forum to examine the linkage between credit bureaux and the banking industry, thus we have chosen the theme of the 2012 edition to be, ‘How Banks can leverage on Credit Bureax Services to accelerate growth.’

    Kuku said experiences of other countries showed that credit bureaux offer services, which if properly harnessed, can reduce banking sector crisis and facilitate industry growth.

    Banks, he said, should also tap into the opportunities offered by credit bureaux by ensuring that top decision makers are acquainted with them opportunities, thereby promoting the use of credit bureaux services.

    The association’s scribe, Yemi Idowu, said banks’ primary focus is growth, having overcome the challenges of the global financial crises, that led to the liquidation of some of their counterparts across the world. He said the group’s focus is not only how to achieve growth, but sustainable growth, assisted by services of credit bureaux.

    Idowu said the prevalence of non-performing loans constitute a major setback for banks, which could be addressed by the use of credit bureaux. “There is the need for industry mechanism to address this problem. With credit bureaus, the problem of non-performing loans will be minimised and nipped in the bud,” he said, adding that while the role of the Asset Management Company of Nigeria (AMCON) is critical in taking over non-performing loans of banks, the services of credit bureaux will however, ensure that the level of loan default is reduced.

    He explained that while AMCON is curative, the credit bureaux sub-sector is preventative, stating that BDAN wants banks to focus more on the services of credit bureaux, so as to achieve an improved credit culture in the country.

    The Forum, which is scheduled to hold in November, will feature a keynote address by the CBN Governor, Sanusi Lamido Sanusi.

  • Banks raise daily ATM withdrawal limit

    Banks raise daily ATM withdrawal limit

    Some banks have increased the limit of cash withdrawals from their Automated Teller Machines (ATMs) from N100,000 to N150,000 daily, The Nation has learnt. Their action may not be unconnected with the confidence gained on sucurity of the platform.

    Diamond Bank informed its customers that it has increased the withdrawal limit, but did not give reasons for its action. Findings showed that other banks, including GTBank and United Bank for Africa (UBA) and implement the new benchmark, sometimes on request.

    Many bank customers welcomed the move, saying it would not only save them time from visiting ATMs’ frequently, but also reduce the commission they pay for cash withdrawals, which is tied to the number of transactions. Some said they believed that banks should set even higher withdrawal limits.

    A customer, Michael Obinna, said the increased limit gives him more opportunity not to queue in banking halls trying to withdraw huge cash, adding that banks can actually raise the limits further, as security of the device is improving.

    Another customer, Biodun Aremu, said ATM has reduced the cost of banking operations, urging banks to drop the N100 charge by some banks on other lenders’ cards. He said deducting excessive charges on use of ATMs diminishes the gains of the device.

    Findings showed that the action, became exigent after the introduction of chip and pin payment cards which drastically reduced fraud in electronic payments. The cards, the Central Bank of Nigeria (CBN) said, have led to 99 per cent drop in ATM card related fraud.

    The CBN said it has assisted in the building secured technology that makes it difficult for fraudsters to hack into customers’ transactions, especially with the migration to EMV (Europay, MasterCard and VISA) which are more secured platform needed to prevent frauds.

    Its Deputy Governor, Operations, Tunde Lemo, who spoke on the sideline at a seminar organised by the Committee of E-Banking Industry Heads (CeBIH) in Lagos, said the bank and other relevant institutions have been able to reduce card fraud drastically.

    “The ATM Fraud Prevention Group convened earlier this year, has successfully driven down ATM fraud incidences by 99 per cent. It has enabled the introduction of the more secure chip and pin cards, versus the magnetic stripe cards that were formerly used in the industry. The success of this group, has demonstrated practically what can be achieved as an industry when we work together to address issues, for the good of the system and the public at large,” he said.

    ATM, which was introduced into Nigeria in 1989, has changed the face of electronic payment. The first ATM was installed by the National Cash Registers (NCR) that for the defunct Societe Generale Bank Nigeria (SGBN) in 1989. There is hardly any bank that has not adopted today technology because of its cost effectiveness.