The Nation Newspaper

Tag: Banks

  • Senate tackles banks for $63b capital flight by IOCs

    •Lawmakers accuse banks of colluding with IOCs to defraud Nigeria

    The Senate is investigating some banks for alleged collusion with some international oil companies (IOCs) to defraud the country.

    Over $62,909,716,417 is said to have been taken out of the country under suspicious circumstances between August 2009 and December 2014.

    The “Investigation of the pre-shipment inspection of export activities in Nigeria” is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

    A document obtained by The Nation showed  the affected banks were asked to submit copies of certified Nigeria Export Proceed (NXP) issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company ltd, Chevron Nigerian Limited, Shell Petroleum Dev. Co. Nig. Ltd and their affiliates between April 1996 to December, 2016.

    The affected banks were also asked to submit all domiciliary accounts opened and /or closed within the period specified for crude oil and gas exported.

    Two banks – Citibank and Standard Chartered Bank – appeared at the investigative joint committee on Thursday while other banks said to be associated with the export of oil and gas will also appear.

    A member of the committee, Senator Yusuf Yusuf (Taraba State), queried why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought.

    He said the probe became necessary because the banks should have ensure petroleum products exporters do the right thing by obeying the guidelines and laws of the country.

    Yusuf said: “It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through statement of account submitted by the banks. The oil companies bring in $20 billion today and tomorrow $20 billion is taken out from the account.

    “The banks are colluding with multi-national oil companies to defraud the country. The government relies on the banks; the banks are now colluding with the multi-national oil companies.”

    He noted that it was obvious the country is not getting the correct export proceeds from oil and gas exports.

    The lawmaker, who insisted that banks have the responsibility to abide by the law, said it was worrisome no indications were made about who pays for oil exports.

    He noted that the committee is interested in why same company exports and pays for products without an indication of who actually buys the products and the corresponding bank.

    Chairman of the joint committee, Senator John Enoh, said the committee was interested to ensure that banks are not colluding with IOCs to flout the laws of the country.

    Enoh said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.

    A document submitted to the committee, which was obtained by The Nation, showed that Citibank Nigeria operates domiciliary export proceed accounts for ENI Group (three accounts), Chevron Group (six accounts) and Shell Group (two accounts).

    The document also showed that Nigerian Agip Oil Company recorded a total export inflow valued at $15,372, 882,703.36

    Chevron Group recorded a total inflow valued at $44,020,596,289.99. Shell group made a total inflow valued at $3,516,237,425.79 giving total of $62,909,716,417 billion.

    The committee resolved to go through documents submitted by the banks before coming up with its recommendations.

    The committee expressed its determination to get to the root of  pre-shipment inspection of export activities.

     

  • Banks not in distress, says NDIC

    Banks not in distress, says NDIC

    The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, has urged the public to ignore rumours of financial distress in some banks.

    A statement by the NDIC said that rumours were being circulated via text messages and social media to de-market those banks and destabilise depositors’ confidence in the banking system.

    The statement, signed by its spokesman, Hadi Birchi, said that the NDIC boss made the call when the Alumni Association of the National Institute (AANI) paid him a courtesy in Abuja.

    He said the NDIC had over the years played critical role in ensuring that Nigerian banks were safe and sound through effective supervision and assistance to deserving financial institutions.

    Ibrahim said the NDIC had continued to closely monitor the challenges facing the industry in order to further safeguard depositors’ interest in the banking system.

    He listed challenges affecting the banking industry      to include, poor corporate governance, insider loans and non-performing loans.

    He said that with NDIC’s strict supervision and regulation of the banking industry in collaboration with CBN, depositors should have full confidence in the safety and security of their funds in licensed banks.

  • Ignore rumours of financial distress in banks, says NDIC

    Ignore rumours of financial distress in banks, says NDIC

    The Nigeria Deposit Insurance Corporation (NDIC), has called on members of the public to ignore rumours of financial distress in some banks that are being circulated through text messages and social media.

    Such rumours the NDIC said are designed to “de market those banks and destabilise depositors’ confidence in the banking system.”

    A statement from the NDIC said the Managing Director/Chief Executive of NDIC Alhaji Ibrahim Umaru made this call during a courtesy call on the Corporation at the NDIC head office in Abuja by the Executive Members of the Alumni Association of the National Institute (AANI), Abuja chapter led by its Chairman, Arc. Bola A. Balogun.

    The NDIC boss noted that “the Corporation had over the years played a very critical role towards ensuring that banks were safe and sound through effective supervision of the banks, financial and technical assistance to deserving financial institutions and adoption of timely failure resolution options to problem banks.

    Alhaji Ibrahim said “the Corporation, since its inception, had continued to closely monitor the challenges affecting the banking industry such as poor corporate governance, insider loans and non-performing loans in order to further safeguard depositors’ interest in the banking system.”

    He added that with the NDIC’s strict supervision and regulation of the banking industry in collaboration with the CBN, depositors should have full confidence in the safety and security of their funds in the licensed banks.

    He further said that the NDIC “had enhanced the effectiveness of its mandate as well as its vast experience in the complex exercise of failure resolution and sought to share the experience through documentation and publication of the failure resolution of twenty (20) cases of failed insured Deposit Money Banks (DMBs) in five (5) volumes.”

    The compendium, he revealed, will highlight key lessons learnt by the Corporation in the exercise in order to prepare itself for the future.

    In line with the Corporation’s efforts toward promoting financial literacy, the MD said the Corporation in collaboration with other stakeholders is proposing the establishment of a Centre for Financial and Economics Studies at the National Institute for Policy and Strategic Studies (NIPPS), Kuru to train participants in essential areas of financial and economic management.

    In his response, the Chairman of AANI Abuja Chapter, Arc. Bola A. Balogun,commended the NDIC for its supervisory role which he described as an invaluable anchor for the security and stability of the nation’s financial system. He also praised the Corporation’s efforts toward protection of depositors’ fundsand consumer protection activities.

     

  • CBN urges banks to lend more to MSMEs

    CBN urges banks to lend more to MSMEs

    The Central Bank of Nigeria (CBN) Governor, God win Emefiele has advised banks and other financial institutions to diversify their portfolios and lend more to the Micro Small and Medium Enterprises (MSMEs) sector which is seen as the engine room of the economy.

    Speaking yesterday at a three-day Financial Institutions Training Centre (FITC) training programme on ‘Movable Asset Lending for Financial Institutions in Nigeria’, in Lagos, he said access to finance is essential for private sector growth and development in any economy. It remains a major constraint to all developing economies like Nigeria, he lamented. He said MSMEs are key in promoting economic development and should be supported by lenders.

    Represented by the Registrar, National Collateral Registry (NCR), Mainasara Muhammad, he said in addressing this financing gap, the CBN collaborated with the World Bank / International Finance Corporation (IFC) Group, to establish the Secured Transactions and National Collateral Registry. The registry, he said, will improve access to finance for MSMEs while maintaining a strong prudent lending policy and promote sound financial system in the country.

    He said the registry started operations in May 2016, and that there were initial teething problems which were surmounted and registration of financing statement commenced in November 2016.

    Also speaking at the event, Managing Director, FITC, Lucy Surhyel Newman, said the IFC and CBN has continued to support FITC in its plans to build competencies in the financial sector. She said that over the recent past five years, IFC has contributed immensely to the competencies of bank directors, FITC staff and associates in terms of corporate governance, board leadership, as well as the emerging collaboration on Environmental and Social Risk Management (ESRM).

    “The movable asset financing course, is targeted at heads of credit and risk management; loan portfolio managers/officers, heads of SME Lending, heads of collection/enforcement, loan recovery manager/officers, heads of legal departments, as well as those transiting to such roles in Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), Primary Mortgage Institutions (PMIs) and Infrastructure Banks (IFBs),” she said.

    Newman said most stakeholders in the Nigerian financial system and socio-economic studies as applicable to development, recognise that MSMEs, are critical to socio-economic development and contribute over 60 percent of GDP in emerging economies.

    Country Manager, IFC, Lagos, Eme Essien Lore, said access to finance by SMEs has remained a challenging feature of economic development in Nigeria.

    She said the link between the financial and real sectors resides in finance being essential to the ability to invest in real capital assets.

    “The absence of a proper financial system and financial products handicaps economic development. It is well known that self-financing by enterprises, particularly SMEs, and individuals, limits their capacity to invest, grow, and smooth consumption through time,” she said.

  • FinTech firms competing with banks, says CIBN

    FinTech firms competing with banks, says CIBN

    The President, Chartered Institute of Bankers of Nigeria (CIBN), Olusegun Ajibola, has said Financial Technology (FinTech) firms are competing with banks and will remain part of the factors that define lenders’ future.

    Speaking at the 22nd World Conference of Banking Institutes (WCBI) in Lagos,  Ajibola, who spoke on the theme: ‘’Rethinking the future of Banking and Finance and Life Long Learning’’, said though the future of banking remains speculative, there are clear indications and a general consensus that a number of factors would continue to disrupt already established banking models.

    Some of the factors he said include increased competition from non-traditional competitors such as FinTech, more fragmented banking with incumbents losing more and more pieces as consumers build their own suite of products from a multitude of providers; increased specialisation to serve specific customer needs with speed and adequate value for money.

    He said: “Though banks would still remain the trusted advisors and there would still be need, albeit reduced significantly, for face-to-face interactions between bank customers and the banks, digital systems like Blockchain, Ripple, Ethereum will be common place and as technology is disrupting the nature of work at an unprecedented rate, there is the need for a new and inclusive approach to learning on the job.”

  • CBN sanctions 12 banks for forex abuse

    CBN sanctions 12 banks for forex abuse

    The Central Bank of Nigeria (CBN) yesterday sanctioned 12 banks for manipulating its foreign exchange forex policies.
    It barred the banks from accessing forex from the newly instituted SMEs Forex Window.
    The affected banks refused to sell forex to genuine SMEs that met disbursement requirements.
    Confirming the development, CBN Spokesman, Isaac Okorafor, said only eight lenders – Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank, sold forex to SMEs and were cleared by the regulator.
    “Apart from these eight banks, the rest have been sanctioned,” Okorafor, said in response to a text message sent to him by The Nation reporter.
    He said the banks were barred for refusing to sell forex to the SME actors after accessing over $300 million offered to them via the SMEs wholesale forex window since its creation in April.
    The SMEs Forex Window, which opened about three weeks ago, was designed to help SMEs import approved finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.
    Okorafor, said appropriate sanctions are spelt out by the CBN Act and the Banks and Other Financial Institutions Act (BOFIA).
    He said employees, including chief executives of the affected banks could be punished where necessary.
    The apex bank spokesman said the apex bank has already received series of complaints from bank customers, especially those that operate in the SMEs segment of the market that banks are frustrating their efforts at getting forex.
    He said some entrepreneurs still complain that banks frustrate their efforts at obtaining forex for their eligible imports after the stipulated 48 hours.
    He appealed to bank customers and the SMEs to “please give us concrete evidence against these banks so that we can hold them responsible by way of sanctions.”
    He added: “Get a photocopy of your Form Q, Form X, Form A or Form M. Give us the name of the bank, branch and send to us and we will deal with them as example to others.
    “The only way to make things better for Nigerians is for them to report to the CBN whenever they are in trouble or whenever, or are getting frustrated by banks.
    “We have a number you can call or you send an email to our Consumer Protection Department. We want to urge everyone who is frustrated by banks to call and lay complaints. We assure you that you will get redress.”
    He warned that the CBN would not sit back and allow any form of instability in the interbank forex market through the actions of institutions or individuals.
    Okorafor urged all stakeholders to play by the rules for the benefit of the entire country and its economy.
    “Any bank that fails to comply with the rules of this and other extant forex guidelines shall be sanctioned, which will affect the executive and other officers of the bank,” CBN Director, Financial Markets Department, Alvan Ikoku, had said in a previous circular to the banks.

  • Task Force to rearrest directors of failed banks

    Task Force to rearrest directors of failed banks

    The Task Force on the Implementation of the Failed Bank Act has decided to re-arrest directors and officers of licensed banks who committed banking malpractices had absconded for prosecution.

    A statement from the Nigeria Deposit Insurance Corporation (NDIC) said the decision to rearrest and prosecute the directors of failed banks  was because “the Task Force noted that some of those accused persons had sneaked back into the country in the hope that their prosecutions might have been terminated.”

    It is against this backdrop that the Task Force gave the notice that such accused persons would be re-arrested and prosecuted to serve as a warning to other bank offenders.

    The statement added that “the Task Force would leave no stone unturned to ensure that erring bank offenders were brought to book.”

    The Task Force had at its 38th meeting held on 13th March, 2017 reviewed two (2) cases of closed Deposit Money Banks [DMBs] involving their former Directors.  One of the closed DMBs cases currently under prosecution was FRN vs. Prince Adekunle Adeyeba & Ors where the accused persons being erstwhile directors of the closed Gulf Bank of Nigeria Plc. were facing trial over banking malpractices involving N15.1 billion of depositors funds in that closed bank. 

     The Task Force also reviewed about sixteen (16) criminal cases being prosecuted under the Failed Banks Act in which prosecution had been stalled as a result of the fact that the accused persons in those cases had jumped bail and had absconded from the country in the heat of their investigation and prosecution. The sureties that took them on bail had also disappeared. 

     It would be recalled that the Failed Banks [Recovery of Debts] and Financial Malpractices in Banks Act 1994 [Failed Banks Act] was promulgated to recover debts owed to Failed Banks which had remained outstanding as at the date the banks were closed or declared failed and to prosecute directors and officers of licensed  banks who had committed banking malpractices.  

    In July 1995, the Inspector General of Police established a special Police Unit called the Failed Banks Inquiry to assist the Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria implement the criminal aspects of the Failed Banks Act   through investigation of criminal complaints referred to the Unit by the Regulatory Authorities.  

    On the 28th of December 1998, the Hon. Attorney General of the Federation and Minister of Justice constituted the Task Force on Implementation of the Failed Banks Act, [The Task Force].  

    The objective of the Task Force was to co-ordinate the different agencies involved in implementation of the criminal aspects of the Failed Banks Act in order to achieve heightened police investigation and legal officers/ private legal practitioners’ prosecution of suspects under the Failed Banks Act.  

    The members of the Task Force are made up of the Nigeria Deposit Insurance Corporation as Chairman, the  Federal Ministry of Justice represented by the Director of Public Prosecution of the Federation, the Central Bank of Nigeria, the Failed Banks Inquiry [now Financial Malpractices Investigation Unit],  the Special Fraud Unit of the Police and subsequently, the Economic and Financial Crimes Commission.

    The statement from NDIC said that “in carrying out its objective, the Task Force reviewed the police investigation of suspects and the prosecution of accused persons by state counsel and private legal practitioners issued with the Fiat of the Attorney General of the Federation under the Failed Banks Act.”

    Generally, the mandate of the Task Force was to superintend over the investigation and prosecution of failed bank cases from commencement of police investigation to ensure early arraignment of suspects before the Tribunals. 

  • CBN: Banks breach forex borrowing limit

    CBN: Banks breach forex borrowing limit

    The Central Bank of Nigeria (CBN) yesterday said some commercial lenders have breached its regulatory limit of foreign currency borrowings due to the recent fall in the value of the naira.

    In a remedial action, the regulator increased the foreign currency borrowing limit for lenders to 125 per cent of their respective shareholders’ fund from 75 per cent previously, it said in a new circular quoted by Reuters.

    The apex bank also said that banks failed to take all $100 million foreign exchange (forex) allocations it offered.

    The demand for forex by authorized dealers seems to have slumped, as the dealers were only able to pick $45 million out of the $100 million offered by the apex bank on wholesale spot.

    Industry experts have attributed the slump in demand to the rate of forex liquidity being pumped into the system by the CBN, noting that it is only a matter of time before the dollar begins another round of crash. The experts also attributed the new trend to the general cash crunch in the financial system.

    The dollar has also crashed against major currencies since US President Donald Trump’s surprising declaration that China is not manipulating the value of the yuan.

    In a chat with newsmen, the Acting Director of Corporate Communications at the CBN, Isaac Okorafor, said the major injections made by the Bank in the course of the week were aimed at providing access to all stakeholders with legitimate need for forex.

    “The CBN remains upbeat that the forex market will remain liquid and that Nigerians who genuinely require the forex will get ample access to the currency,” Okorafor noted.

  • CBN’s stress test shows three banks in trouble

    CBN’s stress test shows three banks in trouble

    • Oil/Gas constitutes 29.59% sector loan

    The Capital Adequacy Ratios (CARs) of three big banks have fallen below regulatory capital requirement, the result of stress test conducted by the Central Bank of Nigeria (CBN) on the status of the banking system has shown.

    Overall, the result of the solvency stress test indicated the potential for high contagion   risk   through   unsecured   interbank   exposure   as   three banks including two Systemically Important Banks failed CAR after a 100 per cent default shock.

    The test, contained in the Financial Stability Report, released yesterday by the CBN governor, Godwin Emefiele, classified lenders into three groups: large banks, those with assets greater than or equal to N1 trillion; medium banks with assets greater than or equal to N500 billion but less than N1 trillion and small banks with assets of less than N500 billion.

    The CAR is a ratio of bank’s assets to its risks and is 10 per cent for national banks and 15 per cent for banks with international subsidiaries and 16 per cent for Systematically Important Banks (SIBs). It said the baseline CAR for the banking industry, large, medium, and small banks stood at 14.78, 15.47, 12.75 and 3.14 per cent, respectively.

    The  banking  industry stress  test was  carried  out  at  end-December  last year, covering  23 commercial  and merchant  banks, and   evaluated  the  resilience  of  the  banks  to credit,  liquidity, interest  rate and  contagion  risks.

    The tests, which measured the lenders’ positions as at December last year, were conducted using the  Implied  Cash  Flow  Analysis  (ICFA)  and Maturity  Mismatch/Rollover  Risk methods, to  assess  the  resilience  of  individual  banks  and the banking industry to both liquidity and funding shocks.

    It revealed that after a one-day run, the liquidity ratio for the industry would decline to 30.2 per cent from the 44.4 per cent pre -shock position and, to 9.73 per cent and 6.76 per cent after  a five-day  and cumulative  30-day  run,  respectively.

    Similarly,  a five-day  and  cumulative 30-day  run  on  the  banking  industry  would  result  in  liquidity  shortfalls of N2.1 trillion  and N2.3 trillion, respectively.

    The test showed that commercial banks experienced deterioration in assets quality  at end-December 2016. The ratio of non-performing loans (NPLs) to gross loans deteriorated by 2.3 and 8.7 percentage points to 14 per cent   compared with the levels at end-June 2016 and end-December 2015, respectively.

    The deterioration in asset quality, the report said, was largely attributed to the rising inflationary trend, negative Gross Domestic Product (GDP) growth, and the depreciation of the naira.

    The CBN said economic crisis adversely impacted borrowers, resulting  in rising NPLs which  required  additional provisioning by  banks , thereby reducing the banks’ CAR.

    It said the decline  of  the  CAR  of small  and  medium  banks  did  not  weigh  significantly  on  the  industry CAR  because  large  banks  hold a  significant  proportion  (88.02 per cent)  of  total  banking  industry loans.

    Analysis of banking industry total credit by sector showed that, oil and gas sector constituted 29.59 per cent of total banking  industry  credit, while manufacturing,  general commerce, government and others, constituted 13.41, 8.71, 6.25, 8.34 and 33.70 per cent, respectively within the test period.

  • Banks, JAMB trade blames over delays in registration

    Banks, JAMB trade blames over delays in registration

    With Benue candidates encountering more difficulties in their bids to register for the 2017/2018 Unified Tertiary Matriculation Examinations (UTME), banks and the Joint Admissions Matriculation Board (JAMB) have continued to trade blames.

    While JAMB has accused the banks of causing the delays, the banks have shot back, arguing that JAMB was solely responsible for generating the Personal Identification Number (PIN), which was the main cause of the delay

    Mr Simeon Isimishere, the Operations Manager of Zenith Bank, Makurdi branch, told the News Agency of Nigeria (NAN), on Friday in Makurdi that the banks were not responsible for the delays experienced by applicants seeking to register the JAMB examinations.

    Isimishere expressed surprise at the allegations by Mr Samuel Umuru, Head of JAMB office in Makurdi, that the banks were responsible for the delays and confusion.

    “`How can JAMB blame the banks? Generating the PINs is the main headache and that is solely handled by JAMB. The banks only issue what has been generated and given to them, so how can one blame them?” he asked.

    He said that the banks only receive the payments and issue the PINs.

    “The problem is that after getting the PINs, most applicants are unable to access the JAMB website.”

    He explained that the initial PINs that were generated by the board had issues and could not be activated.

    The official, however, disclosed that the banks were working with the board to resolve the issues and announced that the problems had been “brought down to the barest minimum”.

    A cross section of the applicants, who spoke with NAN, however said that they were no more experiencing the challenges.

    An applicant, Adasu Emmanuel, said that he had difficulties activating the PIN that was given to him from the bank and made several trips, from the bank to the JAMB office, to rectify the problem.

    “Already, the problem has been fixed. We fixed it this afternoon (Friday),” he said.

    Another applicant, Gloria Asom, who was still on the queue in the bank, also agreed that there was much improvement because “the queue is moving fast and there is no much confusion again”.

    She said that the lines were moving fast, but added that applicants were returning to the bank to complain of invalid PINs.

    Reacting to the damage in the Makurdi JAMB office, Mr Moses Yamu, Public Relations Officer of the Benue Police Command, said that the protesters were dispersed before they could commit much havoc.

    He said that no suspect was arrested, but disclosed that investigation was ongoing.

    “Normalcy has been restored and officials of the examinations board have resumed their duties,” he said.

    NAN recalls that applicants seeking to purchase the JAMB forms besieged the Makurdi JAMB office on Thursday, to protest the cumbersome registration process.

    The angry applicants broke windows and destroyed the office signpost. (NAN)