The Nation Newspaper

Category: Money

  • Prepaid credit cards used for money laundering, CBN, EFCC, others allege

    Prepaid credit cards used for money laundering, CBN, EFCC, others allege

    Prepaid credit cards are being deployed in borders for money laundering, the Nigeria Electronic Fraud Forum (NeFF), has said.

    The NeFF, comprising the Central Bank of Nigeria (CBN), the Economic and Financial Crimes Commission (EFCC) and commercial banks, spoke in Lagos.

    The laundered money is often used for terrorist financing. The planning, logistics and acquisition of objects for terrorist actions often require cross-border transfer of funds to the country of destination.

    Digital Encode Limited, NeFF partner, said money laundering is an intentionally-committed crime that signifies the conversion and transfer of assets of an illicit origin. The objective of this action consists of disguising the true origin, location, nature, disposition, movements and transfer of assets acquired from illegal activities.

    Participation, support or facilitation of illegal activities, such as transfer of money of illicit origin to several bank accounts and afterwards their conversion into legal financial products, are regarded also as money laundering actions.

    NeFF said: “Direct importing of cash will be avoided for the reason of strict border control; more sophisticated techniques will rather be applied for quick and mostly complex transfer of funds through existing legal and illegal transfer systems and financial instruments.”

    The money laundering techniques involving direct use of electronic payment systems is often linked to terrorism financing and it is used only as a transporting instrument in one of the three phases of the money laundering cycle.

    “Money wire transfers can be characterised as the easiest transfer method within the money laundering activities. Transfers are financial transactions by which values are transported from the payer to the payee electronically over telecommunication networks,” it said.

    Chief Technical Officer, Digital Encode Seyi Akindeinde said the laundered fund is detrimental to economies of nations, including Nigeria.

    He said prepaid card services have a unique ’domino effect, which brings the unbanked into the formal financial system, but it has to be guided against being hijacked by money launderers because of its simplicity in usage.

    “The expansion of e-payment platforms is an exciting opportunity to reduce the cash economy, making the market safe while simultaneously improving the lives of the poor. We insist that it is only through a careful analysis of the actual risks posed that appropriate proportionate regulation and controls can be developed,” he said.

    Other features that make prepaid cards vulnerable to money laundering include anonymity, elusiveness (untraceable transactions), rapidity and lack of oversight.

    He however, explained that even in the worst-case scenario where a mobile customer is not registered, transactions are less anonymous than with cash, since they can be linked to a unique mobile number and since transactions (sender’s mobile number, amount, receiver’s mobile number, date) are recorded and traceable. This differs from cash where there is neither a unique identifier for the user nor a recorded trace of the payment.

    He said whilst cash transactions are untraceable, mobile money transactions are clearly traceable in the system of mobile operators as part of usual business practice.  For instance, telephone number (sending and receiving), time and the amount of the transaction are known to the mobile operator.

    According to him, over a distance, the electronic character of mobile technology can make transactions much more rapid and effortless than cash. Rapidity is therefore a bigger risk factor for mobile money services than for cash. In the case where there are no automated internal controls, this can provide efficient means for criminals to launder money.

    He added that while the cash economy lacks oversight, a mobile operator offering mobile money services is regulated. He explained that where laundered money is loaded onto a prepaid debit card that is given to another individual for use, it could look very much like any normal transaction with no observable loss to the card issuer. Therefore, prepaid cards he explained are an example of a payment method that provides a potentially attractive vehicle for enabling money laundering transactions.

    According to him, payment providers and others in the card industry have reacted by putting restrictions on load limits and requiring cardholder identification to help eliminate the potential for using prepaid cards in money laundering.

  • MfBs groan under huge tax burden

    Microfinance banks are battling MfBs huge tax burdens and botched attempts to get tax holidays from the government, The Nation has learnt. According to the annual reports of some of the banks, huge taxes is common to all the entities.

    For instance, Lift Above Poverty Organisation (LAPO) Microfinance Bank Limited paid N1.1 billion tax to government in 18 months. Also, Unical Microfinance Bank Limited, Calabar, Cross River, paid N7 million tax per annum to government.

    Many of the operators in Lagos, who spoke under cover, said they have tried to meet the government on the issue, but to no avail. They said MfB operators were mostly affected, due to various taxes imposed on them by the government.

    The Managing Director of LAPO Microfinance Bank Limited, Godwin Ehigiamusoe, said quite a large number of the banks were having problems with taxes. He urged the Federal Government to consider microfinance banks in terms of tax payment so they could reach a good number of the low income earners.

    He said: “Microfinance banks that are supposed to support poor people are subjected to the same tax regime of an oil and gas company. If you look at our financials, we paid a tax of N1.1 billion cash for 18 months to the Federal Government, because of what tax people call tax commencement or tax registration.

    “Our appeal is that because of the peculiar nature of microfinance, and because of the peculiar nature of those who benefit from microfinance banks, they should be given some consideration or rebate in terms of tax. This can translate to a bigger loan to reach a large number of people,” he added.

    Also, the Managing Director/CEO of Unical Microfinance Bank, Edim Obim, advocated that government should grant microfinance banks tax relief to consolidate and provide financial services to those at the grassroots.

    Reacting to the development, Chairman, National Association of Microfinance Banks, South West Lagos (NAMLAG), chapter, Olufemi Babajide, confirmed that microfinance banks have not enjoyed tax holiday from the governments, adding that the sub-sector had approached government but nothing positive came out of it.

    He said: “Microfinance banking is a new business. We should have tax holiday for at least 10 years so that we can establish well and serve the low income earners better. The government of Western Australia recently granted payroll tax rebate to small businesses operating in that country.

    “Such small businesses with nationwide group payrolls of up to $1.5 million in the 2012/13 financial year would receive a full rebate of their WA payroll tax liabilities, with a maximum value of $41,250.

    “The rebate is part of the measures the Western Australian government has put in place to reduce the tax burden on small businesses, which are the backbone of the economy. This will help ensure that the country remains an attractive place to do business.

    “If this is replicated in Nigeria, particularly in the microfinance sub-sector, the same advantage or benefit will be achieved,” he said.

  • Enterprise Bank celebrates Customer Service Week

    Enterprise Bank celebrates Customer Service Week

    Enterprise Bank Limited (EBL) will join the rest of the world to mark the annual Customer Service Week themed “Be the One.”

    The bank said in a statement that the move was meant to appreciate its customers for their loyalty over the period.

    The event, which is celebrated in the first week of October every year, according to a statement from the bank, is a unique period when service organisations and global agencies extol the patronage and loyalty virtues of their esteemed customers by introducing several unique and special activities to appreciate the customers.

    As a way of making this year’s edition a memorable one for its customers, the bank said it has lined up a number of activities to celebrate and appreciate them. Some of the activities, which will be implemented during the period, include elaborate decoration of branches, complimentary candies, sweets, chocolates and branded writing pens among others for walk-in-customers during the period.

    The bank said that the Customer Service Week has again provided a good opportunity for every staff, unit, department, group and region of the bank to delight its customers.

    The statement added that this objective will be fully accomplished during the week because every staff has been primed to do no less than deliver the best during the period as is the Enterprise Bank tradition.

     

  • CIBN partners regulators, banks on professionalism

    CIBN partners regulators, banks on professionalism

    The Chartered Institute of Bankers of Nigeria (CIBN), is partnering with key stakeholders and institutions in the country to ensure that the Nigerian 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), the Economic and Financial Crime Commission (EFCC) to ensure that bankers carry out their work diligently.

    The institute also said that it was partnering with Unity Bank Plc and other government and private bodies within and outside the country with a view to taking 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. Mr. Aina stated this during the Institute’s dialogue with key stakeholders held in Abuja.

    He encouraged 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.

    He urged 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 incidences of dud cheque crimes in banks.

     

     

     

    “EFCC should collaborate with the Institute on the enforcement of the Dud cheque Act and the Commission should ensure that banks get timely feedback on their returns to the regulatory agencies,” it added.

    While noting the Institute’s proposals, The Chairman of EFCC Mr. Ibrahim Lamorde, observed that the banking profession has improved tremendously. “The banks have done a lot in the area of know your customer (KYC) and there is need for them to also improve in other areas in other to sustain confidence in the industry”, he said.

    CBN Governor, Sanusi Lamido Sanusi, said both parties should work closely by harmonising ideas and efforts in order to ensure that the industry is not divided on approach on issues affecting it and the economy.

    “There is the need to bring in people with sound knowledge on critical financial market issues”, Sanusi said.

    On the other hand, the Managing Director/Chief Executive of Unity Bank Plc, Mr. Ado Wanka, noted that the Institute’s initiatives, especially capacity building, staff training and competency framework would go a long way in closing the gaps in the banking industry. “It will make the industry more responsive and competent for the good of the economy, said Wanka.

  • FBN Capital backs CBN’s credit ban on debtors

    FBN Capital backs CBN’s credit ban on debtors

    The decision taken by Central Bank of Nigeria (CBN) to restrain debtors owing Asset Management Corporation of Nigeria (AMCON) from further access to credit is plausible, FBN Capital, an investment and research firm has said.

    The CBN had in a circular issued last on September 17, barred banks from extending credit to more than 100 companies, which owed the AMCON. This, FBN Capital said, was relevant because the full list, published in the local media, includes some members of successful consortia bidding for power plants.

    The investment firm said that AMCON, which acquired the debts under its bond exchanges, has suggested that the power sector bids will not be derailed as a result.

    It said that the National Council on Privatisation (NCP) has already indicated that the preferred bidders for five power generation companies (GENCOs) for sale offered a total of N110 billion.

    According to the report, a cursory look at the lists of successful bidding consortia reveals household names in the Nigerian banking, oil and gas, and conglomerate sectors as well as one state government and a state owned Chinese electricity utility.

    However, it observed that the preferred bids are still subject to due diligence by five public bodies and a final go-ahead by the NCP. They then have 15 business days after signing the appropriate concession agreement to pay 25 per cent of the total consideration.

    It recalled the unsuccessful privatisation of NITEL where one approved bidder paid the deposit but failed to produce the balance while another failed to make any payments and so forfeited its bid. However, the firm insisted that the strength and reputation of the consortia bidding for the GENCOs suggest this is an unlikely outcome.

    “There have already been delays in the sale of the GENCOs and more may follow. That said, we would stress that the process has attracted bids from consortia with technical expertise and financial clout. The exercise was never fiscal in nature but was designed to deliver power to the population,” it said.

    On the Excess Crude Account (ECA), it said the accounting treatment may still be affected by the dispute between the state governors and the Federal Government over ECA and the Sovereign Wealth Fund (SWF).

    It said the governors are now arguing that signature bonuses and dividends from Nigeria Liquefied Natural Gas (NLNG) should be paid into the federation account, adding that the governors may also broaden their demands as negotiations unfold.

    Besides, the research firm noted that analysis of the draft 2013 budget has shown that only N10 billion earnings are targeted from asset sales.

    The firm said that although the Bureau of Public Enterprises (BPE) suggested a figure of N200 billion in June, the N10 billion appears more plausible, given that bids for the electricity distribution companies (DISCOs) will not be opened until 16 October.

  • I ‘ll protect capital market, says Dangote

    I ‘ll protect capital market, says Dangote

    Alhaji Aliko Dangote has said he would use his tenure at the helms of affairs at the Nigerian Stock Exchange (NSE) to protect the entire capital market.

    Addressing members at the Annual General Meeting (AGM) of the Exchange at the weekend, Dangote, who is chairing his first general meeting after the Court of Appeals restored his election as president of the NSE, said the council of the Exchange under his leadership would devote its attention to promoting interests of the market.

    According to him, the new NSE provides a vehicle for long-term savings and borrowing, and hence, efficient use of financial resources.

    He noted that the market presents incredible opportunity for investors’ pointing out that as the reforms at the NSE continue, the market will be well on its way to recovering its vibrancy and regaining investor confidence by the end of the year.

    “The Exchange will intensify advocacy efforts around public policy formulation that affects investors, listed companies, the broker-dealer community, and other stakeholders in the capital market at large. Increased collaboration with relevant government agencies will facilitate alignment between the needs of the capital market and existing and future policy that can propel market growth, especially in terms of local institutional participation and prospective issuer incentives,” Dangote said.

    He outlined that the NSE would work to broaden local participation in the capital market to create a base for stable and steady market.

    According to him, as the pressure mounts for faster and deeper reforms, liquidity and local investor participation remain key areas of focus.

    He said: “With foreign investors carrying the market, volatility is a lingering concern. Despite the relatively low prices of shares, lack of local investor participation continues to impede market recovery.

    “The Exchange will embark on a massive investor education effort designed to increase financial literacy among retail investors and engage brokerage firms to pick up and improve the advisory services arms of their businesses, to align with international best practices.”

    He added that the NSE would support efforts to achieve full dematerialisation of share certificates as well as electronic allotment of new capital issues by engaging all relevant stakeholders in the realisation of these initiatives.

    Meanwhile, Dangote offered himself for re-election and was re-elected at the meeting. Seven other institutional members including Partnership Investment Company Limited, Reward Investments & Services Limited, WSTC Financial Services Limited, Apt Securities and Funds Limited, City-Code Trust & Investment Limited, ICON Stockbrokers Limited and Stanbic IBTC Stockbrokers were also re-elected.

    Seven persons that were appointed to the council by the Securities and Exchange Commission (SEC) exited the council. These included Mr. Emmanuel Ikazoboh; Mrs. Yemisi Ayeni; Mr. Abubakar Mahmoud, SAN; Mr. Bimbo Ogunbanjo; Mr. Bismarck Rewane; Mrs. Dorothy Ufot, SAN and Mr. Hassan Usman.

    Alhaji Bello Maccido and Katsina State Investment & Property Development Company Limited who were co-opted onto the Council in March 2009 had ceased to be members of council in April 2012. Mallam Ballama Manu, the interim head of council appointed by SEC, had also tendered his resignation on July 25, 2012, effective on that date. Mr. Nsa Harrison tendered his resignation on August 2, 2012 and it took effect at the general meeting. Dr. Oba Otudeko retired as an ex-officio member of the council and was not eligible for re-election.

    Audited report and accounts of the NSE for the year ended December 31, 2011 showed a deficit of N358.7 million in 2011 as against surplus of N357.95 million. Gross fees had dropped from N4.01 billion to N3.17 billion while gross income reduced from N4.80 billion to N3.99 billion. Total assets declined to N14.91 billion as against N15.71 billion.

  • ‘Financial intelligence key to wealth creation’

    ‘Financial intelligence key to wealth creation’

    Chief Executive Officer,Set Group Nigeria Limited,Mr. Sanmi Akindipe, has emphasised the need for sound knowledge of money management principles. This, he said, would lead to sustainable wealth creation.

    Speaking at a forum heralding its forthcoming Christian Financial Seminar, Akindipe, who is also a financial consultant in money and capital market issues, said, “Money without financial intelligence will not be long lasting.”

    Financial intelligence, according to him, involves the ability to manage money judiciously and being able to make good investment decisions among others.

    He said that financial education is the key to financial stability, wealth creation and fight against corruption.

    Akindipe blamed the high rate of corruption, stealing and crimes on lack of poor money management skills and lack of financial intelligence.

    According to him, the high rate of poverty in Nigeria can only be solved by financial intelligence and not by making money available to people.

    He said financial intelligence, which involves mastering the workings of money, will go a long in helping people overcome the problem of dwindling income, poverty. It also ensures the increased inflow of funds over a long period of time.He said: “Financial Illiteracy has created a situation whereby people with fat salary end up borrowing. Poor money management skill has also been the major factor responsible for the prevalence of corruption and stealing.”

    He disclosed that one of the best money management skills is living under one’s means.

    He said: “In aiming for wealth, an individual should endeavor to live under one’s means. There are three ways of living; living above one’s means, living within one’s mean and living under one’s means.

  • ‘Nigeria’ll overcome economic woes’

    ‘Nigeria’ll overcome economic woes’

    Economic expansion in the 25 leading Rapid-Growth Markets (RGMs), including Nigeria, has started to slow sharply since the beginning of this year but this will only be a temporary setback, according to Ernst & Young’s quarterly report.

    Senior Economic Adviser to Ernst & Young Carl Astorri said RGMs are well placed to weather the major risks facing the global economy at the present time, given that they have the space to relax fiscal and monetary policy.

    This, he said, has already happened in some RGMs, adding that there will be further easing of monetary policy in the months ahead, particularly if the global economy deteriorates further.

    Alexis Karklins-Marchay, Co-Leader of the Emerging Markets Centre, said although slower expansion in the rapid-growth markets is likely this year, it will only be a blip and we will see a return to significant growth towards the end of the year.

    “Soaring domestic demand in economies starved, for some time, of investment and consumption will offer business exciting new markets for goods and services in the years ahead,” he said.

    Bisi Sanda, Senior Partner, Transaction Advisory Services, believes that power sector holds the key to the Nigeria’s economic growth and development.

    He says: “If the government of Nigeria completes its privatisation of the power sector assets in 2012, it will provide much required fresh breath to the much delayed reactivation of stimulus of the manufacturing sector, including the reactivation of over 100 textile mills that closed down or relocated from Nigeria between 2000 and 2007. Power is an enabler in Nigeria.”

     

  • CBN, stakeholders fine-tune financial inclusion strategy

    The Central Bank of Nigeria (CBN) has said it is working with stakeholders in the financial sector to fine tune a strategy on ways to drive financial inclusion in the country.

    Financial inclusion, alternatively characterised as ‘access to finance’ has been defined as ‘universal access at reasonable cost, to a wide range of financial services to everyone needing them, provided by a diversity of sound and sustainable institutions.’

    A report from the apex bank indicated that going forward, the regulator will synthesize the schemes and programmes of stakeholders in the area of financial inclusion; establish weaknesses and causes of failure of these programmes and how to address them; define work and action plans of stakeholders to address financial inclusion in Nigeria.

    “The CBN will also promote workable models for fostering financial inclusion in Nigeria and who will own and drive them and set up special funds for promoting and developing a financial inclusion agenda for Nigeria,” it said.

    The apex bank noted that it will , in addition to some of its reforms, adopt some specific models to help drive financial inclusion, such as agent banking, mobile banking, financial literacy and consumer protection, model Point of Sales (POS) services and specialised banking, such as mortgage banking and non-Interest banking among others.

  • Banks slash online transaction charges

    Banks slash online transaction charges

    Banks have begun reducing transaction charges on their online deals ahead of final implementation of the ‘Guide to Bank Charges’, being reviewed by the Central Bank of Nigeria (CBN).

    Findings by The Nation showed that banks have started a piecemeal implementation of the draft guidelines, which is at the final stage of approval by the apex bank. The document was circulated for stakeholders’ input last July. Checks also showed that the review is to address complaints arising from bank tariffs and other miscellaneous fees charged on their customers’ accounts.

    For instance, First City Monument Bank (FCMB) last week communicated its decision to reduce charges on online transactions to its customers. In a mail tagged: Reduction of transaction charges on FCMBOnline, the bank slashed charges on transfers by 50 per cent. Transactions which cost N200 has reduced to N100; N300 slashed N150 and N500 reduced N250 respectively.

    “In a bid to ensure you are well informed, please be reminded of the reduction in our transaction fees for funds transferred to other banks on the FCMBOnline platform. Please note that you can also transfer funds up to a limit of N1 million daily, with N500, 000 per transfer,” it said in an emailed statement. The platform, it added further offers customers the opportunity to perform other banking transactions, such as Funds transfer, Forex transfer, Bills payment, Statement download, Cheque book /draft requests among others.

    Diamond Bank also said that deductions will no longer be made on account of customers that use the Diamond Debit cards for withdrawals on other banks’ Automated Teller Machines (ATMs). The lender said the move was to demonstrate its commitment towards customer satisfaction as well as its resolve to drive innovation in the industry.

    United Bank for Africa Plc has equally reduced charges associated with ATMs, significantly lowering the cost of transactions, particularly for its Verve debit card customers. The bank had introduced a pay-as-you-go charge structure instead of the monthly charge of N100, which a flat fee was charged to all ATM card holders. The Divisional Head, e-banking, UBA, Dr. Yinka Adedeji, said the move was aimed at delighting customers, following recent complaints and feedback as well as foster the cash-less initiative of the CBN to the mass market.

    Findings also showed that there have been slashes on Commission on Turnover (COTs) in many banks and downward review of SMS alert fees.

    The CBN said the ‘Guide to Bank Charges’, which was issued to the industry several years ago is being reviewed to protect bank customers’ interest. The review, which is at advanced stage is expected to be harmonised before final approval and implementation by banks.

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

    It lamented the current practices in a number of banks, where products and services are deployed at exorbitant costs to the customers, saying that the high costs have helped in no small measure in discouraging a large number of the population from assessing financial services.

    Dissatisfaction of banks’ customers could lead to loss of confidence in not only the affected banks but the entire system, and subsequently, could trigger run on the affected banks as well as the system.