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Tag: Bankers’ Committee

  • Bankers’ Committee earmarks N200b for agric export

    The Central Bank of Nigeria (CBN)-backed Bankers’ Committee yesterday approved N200 billion facility to support and standardize agricultural produce exportation.

    The funds will be disbursed by commercial banks at single digit interest rate and 10-year tenor.

    Speaking at the end of Bankers’ Committee meeting in Lagos, Managing Director, United Bank for Africa, Kennedy Uzoka, said since the Bankers’ Committee retreat last December, the committee has been looking for way of assisting Nigerian farmers in the area of exporting their farm produce.

    The products that will be targeted according to the committee, include, oil palm, cocoa, cashew nuts, sesame seeds and shea butter.

    He said the committee expects the exports of these products which is in abundant across the country to boost our foreign exchange earnings.

    The banks said at the end of the meeting in Lagos that they have come up with an immediate, medium and long term plans to address the issues.

    “Towards the end of last year, the banking community under the supervision of the Central Bank of Nigeria had our retreat at the theme of that retreat was how we can transform our economy through export.   We set up a sub-committee to look into issues and the members of that sub-committee consist of people who have operated in geographies in our continent where exports have done very well”.

    “We interrogated this and we worked with different government agencies across the African continent and also we came back home to check what we have and we found out that indeed we have a lot of policies but the challenge has been execution. And we narrowed this down to seven broad areas and typically people will say we don’t have money, which is true, finance is one of the major challenges but we also  saw logistic as a challenge and also policies. We believe that a lot of polices around exportation need to be changed if we want to really make and headway”, Uzoka said.

    Also speaking, CBN Director, Banking Supervision,  Ahmed Abdulahi, said the first three months in the year have been good for the country despite being period for general election as the country recorded an inflow of $6 billion.

    He said this must be attributed to the positive sentiment around the economy in the period despite headwinds recorded in major economies of the world.

    His words: “The first three months in the year have been very good to us as a country. $6 billion came into the economy between January and March this year and this was because of our insistence to conform to the import substitution programmes, the Anchor Borrowers Scheme and other new initiatives of the bankers committee”.

    The committee also disclosed plans to pay more attention to the creative industry. It said it will be a single digit facility with 10 years period. Pointing out that the collateral will be flexible base on their value chains.

    Managing Director, Access Bank, Herbert Wigwe, said the committee noted that emphasis will be on practitioners that are in the business full time. The areas are movie, music, fashion and information technology.

    He added that the committee after a lot of research identified the creative and IT sector as a critical sectors to support social and inclusive growth in Nigeria.

    He said the sector would generate a significant amount of employment given that Nigerians involved in the creative sector have done well in music and others.

     

     

  • Bankers’ Committee assures funding for creative, IT industries

    The Bakers’Committee, comprising the Central Bank of Nigeria and Deposit Money Bank (DMBs) have resolved to finance the creative, fashion and Information Technology (IT) sectors for economic growth and youth employment.

    Managing Director of Access Bank, Herbert Wigwe, told journalists  “after deliberations at the Bankers’ Committee Meeting yesterday, said the creative and ICT sectors have been identified as critical sectors to support social and inclusive growth in Nigeria.”

    He said the banks have found out that basically, these sectors will provide and generate significant number of employment and given how Nigerians in the creative sector have done well   in Nollywood, and music among others, “it will have significant impact on employment creation as well as GDP and of course Nigeria can be become the heart of tourism  if the whole sectors are handled very well. It could also be a source of foreign exchange earning if we invest significantly in these sectors.”

    facility. All the infrastructure to be created will be of world class standard because we are bringing people who have done this else where in the world to partner with our people for knowledge transfer.”

    “Naturally, funding would be by way of debt at reasonable interest rate in single digits which is quasi equity if you like” he explained.

    On his part, Dr. Mudasiru Olaitan: Director, Development Finance Department (DFD) of the CBN said “in Nigeria today we have almost 37.5 million SMEs and most critical factors that affect their growth apart from finance is power. The Bankers Committee is looking at how to work with Rural electrification authority and the CBN to see how power can be deployed to power service providers and provide power to the SMEs.”

    He added that “the process has commenced with pilot programmes at Ariaria market, Sabongeri and Iponri in Lagos. We are looking at how we can deploy about 10,000 mini orbits to the SMEs and is going to further boost our fashion industry and creative industry. If each SME can create about five jobs, multiplied by about 37 million, it is going to be of huge impact on job creation and it will reflect on economy growth.”

    Also speaking at the briefing Mrs. Tomi  Somefun, Managing Director of Unity Bank stated that “apart from creating jobs and increasing the GDP, this initiative is an avenue for youths empowerment. If you look at the demographic of those who contribute to the sectors that was mentioned, two of them are youths. This will further promote youth empowerment which is a  key driver of one of the key goals of the economy.”

    She added that “It will also promote knowledge sharing among these groups. When you put all of them together, they can exchange ideas thereby further improve the content. We are passionate about this as Bankers’ Committee and we think we can do this very very fast.”

    On his part, Mr. Isaac Okorafor, Director Corporate Communications of the CBN explained that “in the IT industry we have millions of Nigerian youths who are so creative with information technology and most of them are jobless. The impact of this, if this young people have the opportunity to unleash their creative energy, is that they will be able to start things on their own, they are able to go abroad even attract companies abroad, or work from Nigeria and earn foreign exchange, that is one basic thing that this economy needs.”

    He added that, “this will happen with the creation of technology hubs across the country. The fashion, music and movie industry, that trio of industries can really power the Nigeria economy much better than oil. With our music, our fashion and our movies the Bankers’Committee are saying with the CBN that you can forget oil if only we can provide these. Banks themselves are making provisions from their profits as part of 5% of their profits to be invested in these areas.”

     

  • Banks to revive funding for construction, says Bankers’ Committee

    Deposit Money Banks (DMBs) are taking a look at ways of raising the funding plans for the construction sector, which contributes three per cent to the Gross Domestic Product (GDP), the Bankers’ Committee has said.

    The committee says it will continue to create awareness around the banks’ efforts and educate the public on opportunities available to them to foster their participation in diversifying the economy.

    The committee explained that although the sector has been severely affected by macro-economic headwinds in the last few quarters, its capacity to contribute more to the GDP growth is not in doubt. The government’s focus on investing in infrastructure and the country’s demographic dynamic aptly reinforce this fact.

    It said that besides, Nigeria’s position as Africa’s second largest economy and the economic hub of West Africa makes its construction industry a promising market for activities such as residential construction, commercial construction, and infrastructure construction. Due to its large population, the high rate of urbanisation and the resulting perennial housing deficit, the demand for affordable housing is robust.

    “There is also latent demand for commercial and industrial construction such as standard office spaces in key states like Lagos and Abuja, and industries in the country’s Free Trade Zones and Business Parks. However, operating in Nigeria’s construction industry is not easy, given that the industry’s players have had to, and are continuing to rely on DMBs’ support to thrive.The construction companies often face challenges, some of which include high cost of land, expensive imported materials and machinery, protracted government documentation and certification processes, numerous fees and taxes, and cash-flow shortfalls due to the government’s delay in paying contractors. The list also includes funding mismatch, as contractors require medium to long-term funding to execute projects, as opposed to short term funding,” it said.

    It said that DMBs have continuously facilitated short term intervention funds, long term financing, and advisory services to the sector. The lenders have also provided clients with deep financial management and investment advice to promote sound investment decisions and efficient management of project finances. These would lead to significant cost savings and faster turnaround time.

    “Some banks that have continuously financed projects and partnered with private sector investors to deepen businesses in the construction sector include First City Monument Bank, FirstBank and Guaranty Trust Bank. The Lagos State government has also been a key participant especially in the development of the Nigeria International Commerce City, also known as Eko Atlantic City. The city will help meet the demand for world-class financial, commercial, residential and tourist real estate,” it added.

    According to the committee, the project was seen as a game changer, and will greatly enable Lagos State achieve its aspirations of becoming the financial capital of Africa. It is expected to attract at least 250,000 residents and a daily flow of around 150,000 commuters. It also contributes to saving the environment, as it will help in halting the erosion of Lagos State’s coastline.

    According to the project developer and Managing Director of South Energyx, David Frame, credit facilities from local banks have been increasing yearly, and this in turn has opened up confidence from the global community, causing international financiers to look to Nigeria as a viable opportunity for investment.

    Banks also participated in the provision of capital for the construction of a Jetty for Nigeria’s largest fertiliser plant Indorama Eleme Fertiliser Chemical Limited, which was built as part of the group’s expansion plan in Africa. As a result of the successful injection of capital for the required infrastructure investments, Nigeria is set to become a net exporter of fertiliser produced by the company. The company produces up to 4,000 metric tonnes of urea per day. Some of the participating banks in this infrastructure project are Stanbic IBTC, Standard Chartered Bank and Access Bank.

    The committee said DMBs have also contributed to the growth of the construction sector by providing the funding necessary for backward-integrating the sector with other key aspects of the construction value chain like quarrying, packaging and transportation.

    “Following the institution of the backward integration policy of the government, cement producers were required to invest in local production facilities. According to Oxford Business Group, a business intelligence consultancy, the result of this was more than $6 billion in investment in the sector, and a major uptick in domestic capacity,” it said.

    It said that from 2008 to 2012, the Nigerian cement industry posted a compound annual growth rate of 43.5 per cent, with domestic production surpassing consumption by 55 per cent, leading Nigeria to become a net exporter of cement.

    The committee said some DMBs that supported this drive include Access Bank, Fidelity Bank, First City Monument Bank,FirstBank, Guaranty Trust Bank, Stanbic IBTC, United Bank for Africa and Zenith Bank. FirstBank and Access Bank further provide flexible short term facilities to meet working capital needs of the distributors of major manufacturing cement companies in the country.

    “As an emerging economy, Nigeria is expected to make huge investments in infrastructure to help it transit into a developed economy. Private and public sector investing in the upgrade and expansion of critical social-economic infrastructure will help provide better lives for its citizens, as well as create significant opportunities for players in the sector. The construction industry will play a major role in ensuring that Nigeria achieves its infrastructural development goals. DMBs are well positioned and determined to continue to provide the right financial support required to jump start Nigeria’s construction boom,” the committee said.

  • Bankers Committee, CBN plan N1.7tr agric funding

    The Bankers’ Committee has unveiled plans by the Central Bank of Nigeria (CBN) to commit N1.7 trillion intervention funds into five agric sector projects to support the government’s economic diversification agenda.

    In a report released at the weekend, the committee said the funds, disbursed through commercial banks, were meant to stimulate development of various agricultural value chains from primary production to market access with multiplier effects on the economy.

    It also called for continuous awareness around Nigerian banks’ efforts and most importantly educating the public on available opportunities and gains of active participation in the ongoing efforts to support government’s drive to diversify the economy.

    The committee said the scheme also highlights its commitment to CBN’s economy diversification project. The funding plans, it added, would also support small, medium and commercial/large scale agriculture and help government achieve its economy diversification plans.

    The committee listed some of the schemes under the CBN’s intervention plans as the Agricultural Credit Guarantee Scheme (N69 billion), Commercial Agricultural Credit Guarantee Scheme (N200 billion), the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (N200 billion), and Small and Medium Enterprises Credit Guarantee Scheme (N200 billion) among others.

    It explained that aside the funds created by the CBN, the Deposit Money Banks (DMBs) have also set up agriculture desks in their respective organisations signaling a renewed commitment to support and sustain the growth of the sector.

    The committee report also said the Nigerian banking system plays the important role in promoting economic growth and development through the process of financial intermediation. “One of the more recognised ways of creating jobs, reducing poverty and achieving economic growth and development is by the timely extension of credit to the to the agricultural sector through the activities of Deposit Money Banks (DMBs),” it said.

  • Bankers Committee, CBN in N1.7tr funding plan for agric

    The Bankers’ Committee has disclosed plans by the Central Bank of Nigeria (CBN) to commit N1.7 trillion intervention funds into five agric sector projects to support government’s economy diversification agenda.

    In a statement at the weekend, the committee said the funds, disbursed through commercial banks, were meant to stimulate development of various agricultural value chains from primary production to market access with multiplier effects on the economy.

    It also called for continuous awareness around Nigerian banks’ efforts and most importantly educating the public on available opportunities and gains of active participation in the ongoing efforts to support government’s drive to diversify the economy.

    The committee said the scheme also highlights its commitment to CBN’s economy diversification project. The funding plans, it added, would also support small, medium and commercial/large scale agriculture and help government achieve its economy diversification plans.

    The committee listed some of the schemes under the CBN’s intervention plans as the Agricultural Credit Guarantee Scheme (N69 billion), Commercial Agricultural Credit Guarantee Scheme (N200 billion), the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (N200 billion), and Small and Medium Enterprises Credit Guarantee Scheme (N200 billion) among others.

    It explained that aside the funds created by the CBN, the Deposit Money Banks (DMBs) have also set up agriculture desks in their respective organisations signalling a renewed commitment to support and sustain the growth of the sector.

    The committee report also said the Nigerian banking system plays the important role in promoting economic growth and development through the process of financial intermediation. “One of the more recognised ways of creating jobs, reducing poverty and achieving economic growth and development is by the timely extension of credit to  the agricultural sector through the activities of Deposit Money Banks (DMBs),” it said.

    “The agriculture sector contributed 22.5 per cent to Nigeria’s overall Gross Domestic Product (GDP) in the second quarter of this year and real agricultural GDP growth for the period was 4.53 per cent (year-on- year), data from the National Bureau of Statistics (NBS) showed”.

    Continuing, it said the Commercial Agriculture Credit Scheme (CACS) showed that tremendous progress has been recorded under the scheme. For example, from inception in 2009, a sum of about N266.025 billion has so far been released to the economy through 20 participating banks funding about 347 projects.

    “The analysis of the number of projects financed under CACS by value chain showed that out of the 347 CACS-sponsored projects, production accounted for 57.06 per cent while processing accounted for 33.14 per cent, followed by marketing, storage and input supplies. A total of 29,046 jobs were also created comprising of 11,717 direct and 17,329 indirect jobs. Also, five out of the 310 private projects are owned and managed by women,” it said.

    The committee said Union Bank of Nigeria and United Bank for Africa (UBA) are some of the banks that have demonstrated huge commitments to agricultural financing, with both offering agricultural micro-loans to farmers in the country.

    “Union Bank has over a sustained period of time provided revolving micro credit to rural farmers as a means of driving investment in the agriculture sector while UBA in 2009, floated the largest private sector funding scheme of N50 billion to support agriculture and agro-processing industries in Nigeria and targeted at all segments of the agriculture chain, from small and medium scale farmers to large, industrial farming projects in poultry, fishery, crop cultivation, production, plantation, farm machinery, and hire services,” it said.

  • CBN increases forex limits to BDCs

    CBN increases forex limits to BDCs

    …To release special intervention fund for Agric and Manufacturing 

     

    The Central Bank of Nigeria (CBN) has moved the limit that banks can sell to Bureaus De Change (BDCs) from $30,000 to $50,000.

    Addressing journalists at the Bankers’ Committee meeting in Abuja Tuesday, the Managing Director of UBA Mr. Kennedy Uzoka disclosed that the decision to increase the amount that banks can sell to BDCs was taken to drive down the price and ensure that people get enough to pay school fees as schools are about to open and grieving that people who will be traveling at this period will require Basic Travel Allowance (BTA) and PTA.

    Members of the bankers’ committee urged BDCs to approach banks and apply for foreign exchange.

    By increasing the amount that BDCs can purchase from banks the bankers’ committee noted that the decision was not a reversal of earlier decision but a tweaking of the earlier decision because the country is battle a dollar crisis.

    Also speaking on the development, Mr Isaac Okorafor of the CBN said the apex bank “will now have to monitor strictly that people do not abuse the process.

    Managing director of Zenith Bank, Peter Amangbo in his address, told journalists that in keeping with the coming celebration of World Savings Day, all banks in Nigeria will break into different groups to cover all the Local Government Areas in the country to sensitize those at the grassroots on the need for people to save massively.

    Amangbo stated that the sensitization of the grassroots by all banks “is to grow the pool of funds available for lending and the need to save.”

    The Zenith Bank boss noted that “there will always be disparity in savings and interest rate stressing that the gap is not as wide as people think it is and the longer people save the more interest they will earn.”

    On the recent directive by the CBN to all banks to open savings account with zero amount, Amangbo said the decision was new and has been in effect for about two years now. According to him, “there are lots of accounts that can be opened with minimal documentation.”

    On the need to have bank branches in all the nooks and cranny of the country, Amangbo said “you don’t need brick and mortar branches anymore because mobile apps are now game changers as a result there is no need to have beaches in Local Government Areas (LGAs).

    The CBN’s director of Banking Supervision, Mrs Tokunbo Martins disclosed that a decision was taken at the end of the bankers’ committee meeting to start disbursing the special intervention fund to support primary agricultural projects and core manufacturing.

    According to Tokunbo Martins “the CBN took from the bank’s cash reserves called the special intervention fund, that fund has been with the CBN for some time.”

    This special intervention fund she said will be “for projects that support import substitution, projects that will help protect foreign exchange such that whatever we were importing before can be manufactured.”

    This fund she added “will be released to this kind of projects, it will not be released to any kind of project and once these funds are released there will be some ease on the system and there will be more liquidity so important projects will get financing at a lower single digit interest rate.”

    She also clarified that the decision to have banks write off their Non Performing Lao s (NPLs) was not an arbitrary decision but that the “only NPLs that have been fully provided for in the books for the banks are those that can be written off and not an arbitrary right off of NPLs.”

     

  • Bankers’ Committee flays banks for dishonouring APGs

    The Sub-Committee on Ethics and Professionalism of the Bankers’ Committee has deplored  the rate at which  banks dishonour their guarantees, particularly Advance Payment Guarantees (APGs)

    According to a document in the possession of The Nation, the Bankers’ Committee raised the alarm at its meeting in Abuja last month.

    The Sub-Committee said it “was alarmed at the frequency of default by banks on APGs. APGs are issued on certain terms and conditions and upon crystallisation, decisions should be based on such terms and conditions considering that guarantees are payable on demand”.

    The Sub-Committee’s worry over the refusal of banks to honour APGs is not unconnected with several cases before it involving banks petitioning other banks over their refusal to honour genuine APGs. Of the three cases adjudicated by the Sub-Committee at the  meeting, two involved default in one bank honouring a valid APG issued for contracts in which banks’customers failed to meet up to their own ends of the agreement.

    One case involved Sterling Bank Plc and Unity Bank Plc and the other Skye Bank Plc and Ecobank Plc.

    The Sub-Committee is also worried at the spate of litigations by customers of banks, especially on  guarantee, thereby frustrating the contract.

    The Sub-Committee observed that in some cases it is the banks that encourage their customers to go into litigation, a development, the Sub-Committee considers inimical to the growth of the banking industry.

  • Bad debts: Bankers’ Committee says Ecobank’s bahaviour is unethical

    •Rules in favour of Honeywell 

    The sub-committee on ethics and professionalism of the Bankers’ Committee has ruled that the agreement between Honeywell Group and Ecobank to pay N3.5 billion as full and final payment of the borrowers’ indebtedness is valid and should be complied with.

    The Committee which submitted its report to the Bankers’ Committee on the 2nd of June this year, said it found after investigations that the transaction involved a legacy (Oceanic Bank Ltd) and living bank Ecobank, and that the bank did not go through its Board for approval on the concession granted to Honeywell Group.

    According to the Committee’s findings, N3.5 billion paid by Honeywell Group was in line with the agreement reached by the two parties on 22nd July, 2013 and that Ecobank’s behaviour was “considered as unethical”.

    It was revealed that “based on the legal opinion and clarification sought from the Banking Supervision Department of the Central Bank of Nigeria (CBN), Chairman of Honeywell Group was not a ‘related party’ to the transactions as he was not a member of the board of Directors of Oceanic Bank at the time the transactions were consummated”.

    The Committee noted: “As at the time Ecobank Nigeria  acquired Oceanic Bank  and by implication the Honeywell Group’s loan facility, and commencement of discussions with Ecobank, the chairman, had left the Board of Ecobank Transnational Incorporated (ETI) as a Director.”

    In its defense before the Committee, Ecobank said it “was not attempting to renege on any agreement” because, “Honeywell Group did not meet the terms of the in-principle agreement”.

    Ecobank said at the meeting of July 22, 2013, there was an in-principle agreement/understanding for the payment of N3.5 billion, the initial payment was to be an immediate good faith payment of N500 million, while the balance of N3 billion was to be paid within two weeks of July 22, 2013 before the CBN examiners in the bank concluded their examinations and subject to the approval of its Board of Directors.

    The bank said its letter of July 22, 2013 reiterated the need for the in-principle proposed concessionary payment to be made before the conclusion of the CBN examination. As the examiners were at the point of concluding the examination, the bank projected that the payment of the sum of N3.5 billion on the three accounts within the two weeks might prevent the threatened downgrade.

    Although Honeywell Group made a payment of N500 million on July 25, 2013, the company did not pay the balance of N3 billion before the CBN examiners left the bank, adding that “the issue of calling or writing to establish the timeline was not necessary as it was confirmed in the bank’s letter of July 22, 2013.”

    Ecobank added that “the in-principle understanding of July 22, 2013 could not have been reiterated in December 2013, long after the CBN examiners had left the bank as it no longer existed since the fundamental conditions were not met, and that the completion of payment of N3.5 billion on January 30, 2014 was uneventful as it occurred long after the timeline and therefore was not considered as full and final settlement of the debt.”

    Ecobank said it duly acknowledged the cumulative payment of N3.5 billion in a letter dated February 2014, but never committed to issuing letter of discharge of the debt, or the removal of the debt from the Credit Bureau because the in-principle proposed concessionary payment had lapsed and was no longer in effect.

    The bank also added that it’s letter of November 14,, 2014 was a response to the letter of Honeywell dated September 01, 2104, reiterating the position of the Board of Directors of the bank on the Honeywell Group’s request for the proposed concession. Noting that “prior to the letter, the chairman of Honeywell Group had several discussions with management of the bank at which the management of the bank reiterated that the in-principle concessionary payment had lapsed.”

    It was equally stated that “the delay of Honeywell Group in taking advantage of the in-principle proposed concession and the timeline for same, led to the intervention of the CBN and its directives to the bank to recover the total outstanding amount. The CBN and NDIC had in their risk based supervisory report on the bank as at June 30, 2014, directed the bank as follows: facilities amounting to N5.3 billion owed to the defunct Oceanic bank by companies relating to Oba Otudeko, an ex director of Ecobank Transnational Incorporated (ETI) had not been fully paid. Only N3.5 billion had been paid thereby leaving a balance of N1.8 billion despite the following facts:

    . The customer has ability to pay

    . The agreed date of settlement had lapsed

    . The customer was an ex-director of ETI which is the parent company of Econbank Nigeria Limittd i.e., an insider whose facility can only be written off with the approval of the CBN, which has not been obtained and that  the customer is the current Chairman of FBN Holdings Plc.

    Based on these facts according to Ecobank, it’s “management was required to ensure that the obligor pays up the outstanding balance of N1.8 billion and forward an update to the Director BSD, CBN and Director BED NDIC, within 30 days of the receipt of this report.”

    Ecobank argued that the balance outstanding on the three accounts as at March 31, 2015 are: Anchorage Leisure N805,223,592.03; Siloam Global N2,812,361,174.69 and Honeywell Flour Mills N217,625,148.77

    Details of the debt revealed that Anchorage Leisure received a N450 million project facility granted it in 2006. The facility was used to fund the construction of the Raddison Blu Anchorage Hotel. Unfortunately, the project experienced significant delays due to factors which were out of  control of the management during the construction period and this led to considerable cost overruns. This became a heavy burden on the capital structure of the project and hampered the ability of the project to payback the capital taken.

    Secondly, Honeywell Flour Mills was in September 2008 granted a margin facility by Oceanic Bank to the tune of N9.3 billion. Following an agreement between the parties in March 2010, the underlying assets were disposed and the proceeds applied towards the facility. The balance of N2.5 billion was rescheduled after a bullet payment of N6 billion had been made by Honeywell into the account.

    Finally, Siloam Global Limited’s indebtedness was an underwriting commitment for the sum of N2.56 billion which was converted into loan in December, 2011, in line with a put option agreed between Oceanic Bank and Honeywell Flour Mills Plc. However, as a result of general downturn in the capital market, the underlying assets suffered significant diminution in value.

    In 2012, Honeywell commenced discussions with Ecobank with a view to agreeing to a full and final settlement of the indebtedness of three of its operating companies mentioned above.

     

     

  • Bankers’ Committee: interest rates reduction not immediate

    Bankers’ Committee: interest rates reduction not immediate

    The Bankers’ Committee has said interest rates will not be reduced anytime soon but will take a gradual process to realise.

    Addressing journalists at the end of the 316th Bankers’ Committee Meeting in Abuja yesterday, the Managaing Director of Guaranty Trust Bank (GTBank) Mr. Segun Agbaje said interest rate will remain the way it is in the short to medium term.

    He said: “On the issue of interest rate,  where we are today is that in the short to medium term, interest rates are likely to stay where they are as the fundamentals of the economies remain fixed.

    “There are many impediments to lower interest rates like rate of inflation, type of exchange rates desired, what the cost of funds of the banks are, cost of providing infrastructure, cost of providing personnel.”

    All these he said come into what is called cost of funding before the margin is determined. “Even macro economic factors of a country also affect what interest rates are charged. There are so many variables that determine interest rate. Whether you live in lower interest rate environment, we do not want interest rate that is below the rate of inflation,” Agbaje said.

    However, as the nation deals “with such things as interest rates and import substitution, you will start to see interest rates considerably move downwards” he said.

    “With price stability at the fore front of the new Central Bank of Nigeria (CBN) regime, it means exchange rate stability as an initiative of the CBN will continue to be pursued,”he added.

    He commended the CBN for maintaining inflation at a single digit and advised that “all the monetary policies should ensure that we continue to have single digit inflation.”

    Speaking for the CBN, Director, Banking Supervision, Mrs. Tokunbo Martins,   reiterated what Agbaje had earlier said that Emefiele is passionate about the reduction of interest rate She however agreed that “it will be done gradually; it is not something that can be done tomorrow. The CBN governor along with the banking industry will achieve this in the long run.”

    She said the CBN Governor Mr Godwin Emefiele is committed to financial system stability and as such “there will be zero tolerance for infractions no soft touch regulation or supervision.”

    Regulation and supervision by the CBN under Emefiele she said, will be very intense.

    For serial bank debtors who go from one bank to another with different names and guises taking money and not paying back Mrs. Martins said “such people will not be able to get credit anywhere in the system and will be blacklisted.”

    CEO, UBA, Philip Oduoza said the biometric gathering exercise which is a means of identifying bank customers has already started.

    So far about 10,000 customers he said have been enrolled for the biometric exercise and progress continues to be made as the roll out of customers started two days. The biometric exercise he said will assist in consumer lending to provide credit availability to people excluded from the banking system.