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  • Summary of CBN financial stability report

    Many factors have contributed to the Non-Performing Loans (NPLs) of Deposit Money Banks (DMBs) to gross loans at 14 per cent in 2016, the Central Bank of Nigeria (CBN) latest Financial Stability Report (FSR) has revealed.

    The report showed that depreciation of naira in commercial banks NPLs to gross loans in 2015 closed at 5.3 per cent from five per cent in the second half of 2015. The apex bank in its new financial stability report disclosed that ratio of core liquid assets to total assets increased by 2.3 percentage points to 16.3 per cent in 2016 from 14 per cent recorded at half year ended June 2016.

    It further noted that the ratio of core liquid assets to short-term liabilities increased by 2.9 percentage points to 24.5 per cent in 2016 compared with 21.6 per cent in second half of 2016.

    “The increase in the ratio of core liquid assets to both total assets and short-term liabilities reflects improved buffers to absorb short term obligations,” the financial stability report of CBN explained.

    According to the report, the banking industry stress test carried out in 2016, covered 23 commercial and merchant banks, to evaluate the resilience of the banks to credit, liquidity, interest rate and contagion risks.

    The financial stability report noted that the banking industry was categorised into large assets with greater than or equal to N1 trillion; medium banks with assets greater than N500billion but less than N1 trillion and small banks with assets lesser than or equal to N500billion.

    The report considered a baseline Capital Adequacy Ratio (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 report stated that, “The economic headwinds have adversely impacted bank borrowers, resulting in rising NPLs which required additional provisioning by banks, thereby reducing the banks’ CAR.

    “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 (88.02per cent) of total banking industry loans.

    “The ratio of non-performing loans net of provision to capital for the banking industry increased to 38.4 per cent in 2016 from 28.4 per cent as at second half of 2016.”

    Explaining further on banks solvency stress test, the report said: “The post-shock stress test results showed that a 100 per cent increase in NPLs will lead to a CAR of 10.55, 12.01, 10.34 and -27.03 per cent for the banking industry, large, medium and small banks, respectively.

    “The results revealed that all the groups except small banks can withstand a 100 per cent increase in NPLs. However, none of the groups could sustain the impact of the most severe shock of a 200 per cent increase in NPLs as their post-shock CARs fell below the 10 per cent minimum prudential requirement.

    “The impact of the severe shock scenario will result in a decline of CAR to 5.87, 8.25, 7.80 and -84.50 per cent for the banking industry, large, medium and small banks, respectively.

    “The banking industry and the peered-groups showed a high level of credit concentration risk as their respective CARs fell below 10 per cent under the shocks of deterioration in the quality of the risk assets.

    “If the five biggest corporate obligor credit facilities shifts from Sub- standard to Doubtful, the CARs fell to 7.89, 8.84, 5.16 and -8.93 per cent for banking industry, large, medium and small banks, while if the five biggest corporate obligor credit facilities shifts from Doubtful to Lost, the CARs fell to -0.21, 1.09, -3.88 and -24.44 per cent, for the corresponding categories, respectively.”

    According to the report, 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, general commerce, government and others, constituted 13.41, 8.71, 6.25, 8.34 and 33.70 per cent, respectively, in 2016.

    “The stress test result of a 20 per cent default in oil and gas exposures will lead to CARs of 13.98, 14.67, 11.87 and 2.63 per cent for the banking industry, large, medium and small banks, respectively.

    “However, with a more severe shock of 50 per cent default in exposure to the sector, only the large banks will have CAR of 10.17 per cent which is above the regulatory threshold. This showed that medium and small banks have more oil and gas credit concentration risk than the large banks, despite their smaller proportion of exposure to the sector.”

  • CBN assures on economic stability in Q3

    The economic outlook looks promising in the coming weeks, the Director of Banking Supervision, Central Bank of Nigeria (CBN), Mr Ahmed Abdullahi has said.

    Abdullahi who spoke at the 323rd Bankers’ Committee meeting in Lagos at the weekend said the economy would record significant improvement by the third quarter of the year, citing stability in the foreign exchange market which has achieved convergence in the official and parallel markets.

    The Committee noted with delight the improvement in economy in recent times, but observed that the economy is still in the negative but the size of the negative growth has reduced hoped that by the end of the end of the third quarter there will be positive growth as there are a number of indices that are pointing toward that.

    The meeting observed that Inflation is trending downwards as it is about 16.25 per cent from 18 per cent that it was while the exchange rate has largely stabilised, as there is convergence at both the FX, Importer and Exporter window as well as the BDCs’ rate.

    The director added that confidence was increasingly building in the economy saying that was because of the improvement in oil production and oil price.

    “The economy will remain robust now that the upward growth in most of the sectors of the economy. The FX window in the last six weeks has recorded over $2billion which has been reregistered as inflow and that has helped in stabilising the market. With other windows, we have seen activities that have helped in building confidence in the market generally.”

    The Managing Director of the Standard Chartered Banks, Bola Adesola gave an update on the agriculture and small enterprise equity fund.

    Adesola said that the equity fund was a decision held after the last Bankers’ Committee’s retreat last month with a commitment by banks to support agriculture and SMEs in a sustainable way.

    She said, “After the audited results of the banks have been published we all contributed five percent of our Profit After Tax (PAT) to a fund in CBN towards contributing equity to agriculture, small and medium enterprises.

    “As you know, many companies cannot just survive on debt because of the cost of debt and so long term capital is required to catalyse the growth of SMEs and make them more viable and sustainable.”

    She also disclosed that there had been a contribution of N26billion in the equity fund while the committee was still working on the framework as well as looking at partnerships.

    “We are looking at co-investing with private equity firms as well and the objective is to catalyse growth in SMEs to ease access to finance to build capacity in the agriculture and SME sector to create jobs and ultimately to improve prosperity.”

    Also, Mr Nnamdi Okonkwo, Managing Director of Fidelity Bank said there was also discussions on issues that could jeopardise financial inclusion and anything that would stop people from being included in the formal financial sector.

    “We will work to ensure that that bottleneck is removed. One key issue that came up today is the issue of customers of microfinance banks, MFBs who do not yet have their Biometric Verification Numbers registered, BVN. Some feedback that the committee got was that some banks charge customers when they try to register. So the bank’s committee agreed today that MFBs customers can walk into any bank and register their BVN free of charge, to make sure that we don’t discourage people from being financially included.”

  • CBN plans sale of N133b treasury bill next week

    THE Central Bank of Nigeria plans to sell N133.24 billion ($424 million) worth of treasury bills at an auction next week, the apeex bank said yesterday.

    The bank said it plans to offer N28.12 billion  worth of three-month debt, N55.12 billion in six-month bill and N50 billion in one-year note, using the Dutch auction system on June 21.

    Settlement will be made next day after the auction.

    On Friday, the monetary body said it would issue N1.24 trillion  worth of the treasury notes in the third quarter, starting from June 15 to August 31.

    The CBN issues treasury bills twice a month to help the government fund its budget deficit, support commercial lenders in managing liquidity and curb inflation.

    The  country expects a budget deficit of N2.36 trillion this year as it tries to spend its way out of a recession. It expects to raise money to cover more than half the deficit from the local market.

    The economy has a series of debt issues lined up including a $300 million Diaspora bond and N100 billion debut domestic sukuk this month.

  • CBN injects $413.5m in economy to sustain Naira value

    CBN injects $413.5m in economy to sustain Naira value

    The Central Bank of Nigeria (CBN) yesterday intervened in the inter-bank Foreign Exchange market to the tune of 413.5 million dollars to further shore up the international value of the Naira.

    In a statement in Abuja  by its acting Director, Corporate Communications, Mr Isaac Okorafor,  the apex bank said the latest intervention underscores the apex bank’s resolve to sustain liquidity in the foreign exchange market.

    The statement reads: “The CBN offered the sum of 100 million dollars to dealers in the wholesale window, while the Small and Medium Enterprises (SMEs) window was allocated a total of 28million dollars.

    “The invisibles segment was allocated the sum of 25.5 million dollars to meet the needs of those requiring forex for Business and Personal Travel Allowances, school tuition, medicals, etc,”.

    According to Okorafor, the bank has also released the figures for the auction sales in the retail window last week, totaling 260million dollars.

    The CBN spokesperson said the Bank was optimistic that the Naira would continue its strong run against the dollar and other major currencies around the world.

    On the bank’s objective to achieve convergence between the forex rates at both the inter-bank and BDC segments, Okorafor said the CBN was confident of achieving the goal soon particularly if all stakeholders played by the rules.

    He, therefore, charged all dealers, principally licensed Bureaux De Change (BDCs), to abide by the rule, for the sake of the economy.

    Meanwhile, the naira continued to maintain its stability in the FOREX market, exchanging at N360 to a dollar at the commercial banks, N361 to a dollar at the Bureau de Change segment and N363 to a dollar at the black market.

  • BDC operators advise CBN on naira

    BDC operators advise CBN on naira

    The Association of Bureaux De Change Operators of Nigeria (ABCON) has advised the Central Bank of Nigeria (CBN) on steps to sustain the naira’s  recovery against dollar. The naira has remained at N362/$1 at the parallel market in the last one week, a major improvement from N520/$1 in February.

    In a statement released yesterday, ABCON President Aminu Gwadade said the CBN should review BDCs dollar buying rate downwards from N360 to N350/$1 and enhance security surveillance at the borders to checkmate illegal cash movement that has dire consequences on naira’s stability.

    Gwadabe said the standard/average trade margin for BDCs across the world is 12 per cent and reviewing the rate to N350/$1 is less than three per cent for Nigerian operators.

    ”The CBN should be proactive enough to quickly review the BDC buying rate so as to bring the foreign exchange transfer rate down and boost market stability. The BDC rate should be brought down to N350/$1 for now and see the positive impact on the local currency,” he said.

    Gwadabe said the rate challenges faced by BDCs, if not checked, would trigger a liquidity crisis that may derail the ongoing recovery of the naira against the dollar. He said the BDCs will continue to support CBN’s determination to achieve exchange rate stability, and strengthen the value of the local currency.

    He said downward review of the BDCs rate is critical at present, as it will keep BDCs afloat to meet increasing forex demand at the retail end of the market. “For now, the parallel market operators are taking over our business because BDCs rates and their selling rates are the same and this has to change,” he said.

    He also called on the CBN to increase the volume of Personal Travel Allowances (PTAs) from $4,000 to $8,000; Business Travel Allowances (BTAs) from $5,000 to $10,000; school fees from $5,000 to $20,000 and medicals from $5,000 to $15,000 quarterly to deepen liquidity in the market.

    Gwadade, said implementing these recommendations will help to stop a new wave of volatility building up in the forex market over parallel market/BDCs rate convergence. Both the parallel market and BDCs rate are trading around N360/$1, and the BDCs buy the International Money Transfer Operators (IMTOs) proceeds from the CBN at N360/$1.

    He disclosed that with forex transfer rate at N375/$1, which is N15 higher than N360/$1 cash rate, rent seekers are mopping up dollars and moving them to Dubai, China and Lebanon from where they transfer them back to the country and make huge margins.

    Gwadabe praised the CBN for liberalizing the forex market and making more dollars available, but regretted that such funds are not really accessible in right volumes to the critical stakeholders like BDCs adding that increasing the volume of PTAs, BTAs, school fess and medicals will help to make more funds available to end users.

    “We are happy that the CBN is liberalising the foreign exchange market to ensure that its objective of deepening the market is achieved. We applaud its decision of allowing authorized dealers in interbank trading to release excess foreign exchange trading positions to other authorised dealers without seeking prior approval from the CBN,” he said.

    Gwadabe also said the coming of Investors and Exporters (I&E) Forex Window, was also part of CBN’s efforts to further develop the Nigerian forex market and improve market structure.

    Part of the liberalization policy, he added, is the directive that all interbank trades, spot, forwards, futures, options and swaps that impact on authorized dealers limit comply with rate reasonability standards. Besides, the CBN reserves the right to intervene as a buyer or seller as it deems fit on the interbank market.

    He reiterated that the forex liberalization policy has created more liquidity in the market, except that such funds are not accessible in the right proportions to key stakeholders.

    “What stops the CBN from raising the PTA and BTA to $8,000 and $10,000 per quarter? The school fees and medicals should also be increased to $20,000 and $15,000 respectively to put more dollars in the hands of end-users. That way, the liquidity that is coming from liberalization of the forex market will be absorbed,” he said.

    The ABCON boss believes that despite the challenges facing the economy, the CBN and BDCs should continue to brainstorm and find sustainable solutions that can help the country wriggle out of the ongoing forex crisis and achieve full economic recovery.

    He also pledged to ensure that purchased funds by its members are disbursed to end users and for eligible transactions only; operators will continue to render weekly returns on dollar purchases to the CBN while those that breach regulatory guidelines are sanctioned.

  • CBN to sell N1.24tr Treasury Bills in three months

    CBN to sell N1.24tr Treasury Bills in three months

    The Central Bank of Nigeria (CBN) plans to sell N1.24 trillion ($4.1 billion) worth of treasury bills (T-bills) from June 15 to August 31, the regulator’s debt calendar for the third quarter has shown.

    The bank aims to auction N226.64 billion in 91-day bills, N311.32 billion in 182-day and N698.64 billion in 364-day debt.

    The ape bank sells treasury bills twice a month to help fund the government’s budget deficit and support commercial banks in managing liquidity.

    Nigeria, grappling with its first recession in 25 years after a slide in global oil prices and due to the impact of attacks on energy facilities in the Niger Delta, has set out a budget plan worth N7.44 trillion for this year.

    Nigeria expects to face a budget deficit of about N2.21 trillion for the year as it tries to wriggle its way out of recession. It expects to raise money to cover more than half the deficit through domestic borrowing.

    The bills’ maturities range between three months and a year and would be raised today, according to the CBN. They are marketable short-term money market securities that serve the purpose of raising money for the government and also help in monetary policy management of the CBN.

    The CBN issues treasury bills to raise cash to fund the government budget deficit, helps manage banking system liquidity and curbs rising inflation.

    The CBN on August 3 last year, raised N245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. It also issued N45.18 billion in three-month debt, N80 billion of six-month paper and N120 billion of one year bills in a Dutch auction, Treasury Bills traders said.

    Indicative rates for the auction are 16 per cent for three-months, 18 per cent for six-months and 18.5 per cent for one-year bills. The auction’s results will be published the day after the sale.

    The main investors in government securities are mainly pension funds and commercial banks, which control more than 60 per cent of the market, followed by insurance funds and a few micro-finance institutions.

    Yields on fixed income securities have been rising in recent months with the CBN mopping up naira liquidity to try to lure back foreign investors, who sold naira assets following the plunge in the price of oil, Nigeria’s economic mainstay.

     

  • CBN spent N1.23tr intervention fund illegally, says Senate

    CBN spent N1.23tr intervention fund illegally, says Senate

    Senate yesterday took steps to curb alleged recklessness of the Central Bank of Nigeria (CBN) on use of intervention funds.

    The upper chamber frowned at alleged expenditure of N1.23trillion by the apex bank in 2015 without recourse to law.

    The amount, the lawmakers said, far exceeds five per cent of CBN total revenue in 2014 as provided for in Section 38 of its Act.

    This is contained in a bill sponsored by Senator Rose Oko (Cross River North) and passed for second reading yesterday.

    Senator Oko in her lead debate on the Bill entitled:  “A Bill for an Act to amend the Central Bank of Nigeria Act 2007 to ensure transparency and accountability in the operation of the bank and subject intervention advances to the approval of National Assembly,” lamented that there is no mechanism in place to monitor and track the CBN intervention funds over the years.

    She accused the apex bank of contravening relevant provisions of the constitution and the Fiscal Responsibility Act through extra-budgetary intervention to selected bodies, institutions and agencies under the guise of intervention funds.

    She added that lack of proper tracking of CBN intervention funds has made it difficult for the lawmakers to properly oversee the agency.

    According to her, many countries across the globe such as Ghana, Liberia, Tanzania, Uganda, South Africa , United States of America and others, have windows for such interventions in their economy just as the CBN programme but carried them out in line with relevant laws regulating them and through legislative approval.

    She submitted that aside the N1.23trillion spent by CBN in 2015 as intervention funds far exceeding the totality of five per cent of its revenue in 2014, it almost equal the N1.8trillion voted as capital expenditure for the 2016 budget.

    “The need to bring the CBN Act 2007 in line with provisions of Nigerian constitution by subjecting it to National Assembly scrutiny and approval has become imperative,” she said.

    She listed some of the intervention funds given out by CBN without National Assembly approval in recent time to include “ the N620 billion bailout for five banks, namely Afribank Plc, intercontinental Bank Plc, Union Bank of Nigeria, Oceanic Bank and Finbank Plc, varrious donations to tertiary institution running into several billions; the N300 billion bailout to states drawn from $2.1 billion NLNG’s taxes and dividends to pay salaries.

  • CBN, Money Supply, Inflation and Output

    The Central Bank has the onerous task of formulating and implementing appropriate monetary policy as a major economic policy that must of necessity work in tandem with its twin sister, the fiscal policy which is in the purview of Ministry of Finance. The complementary effects of the two basic economic policies pilot the political economy towards achieving macro-economic objectives of full employment of resources, low and stable price level, increasing economic growth, balance of payments equilibrium, promoting income redistribution towards reducing income inequality and promoting sustainable green economy. Inability of the two government agencies to make these two major policies to complement each other naturally leads to economic disequilibrium on many fronts. But importantly, the foundation of policy formulation of these macroeconomic policies is the existence of data that is clean and reliable.

    In the last 12 months or more, monetary and fiscal policies in the country have not been in harmony with each other such that the Minister of Finance, out of frustration at one point, called on the monetary authority to cooperate with the expansionary fiscal policy stance to bail out the economy from recession! While the fiscal policy authority was trying to finance capital projects, intervene in private sector projects particularly those in the informal micro and small scale enterprises as well as medium scale enterprises, the monetary authority was busy promoting restrictive monetary policy by imposing high interest rates and by implication, credit squeeze within the erroneous believe that high inflationary pressure in the economy was due to high level of liquidity in circulation.

    Given the decline in inflation rate within the last two months, the Central Bank of Nigeria (CBN) managers would have realized that contrary to their opinion that the huge amount of money in the economy had been responsible for the inflationary pressure, it has been the exchange rate. For over 12 months as referred to above, the Monetary Policy Committee (MPC) of the Bank had refused to bring down the Monetary Policy Rate (MPR) even when credit creation was supposedly encouraged through improvements in liquidity ratios. It was a counter-productive policy to raise interest rates and expect investors to demand for credits at such high interest rates, even though the banks might be ready and willing theoretically to supply credit.

    If we check records of interest rates in developed economies and even emerging economies, lending and saving rates rarely rise above five per cent. The low lending rate is to encourage investors to come forward to borrow while the low saving rate may not encourage saving in deposit money banks but direct funds to the capital market which provide long term funds needed for expansion of production activities in agricultural, industrial and other physical product sectors, as well as the service sector. The gap between saving and lending rates in such economies is between one and two percentage points while the difference in Nigeria is between 15 and 20 percentage point!  Investors who borrow funds at such high rate in Nigeria should not be expected to invest in businesses with long term gestation period which is necessary for economic growth but for speculative and round tripping activities that are injurious to the economy. What we have seen over time however is that it is the government that ends up borrowing large proportion of the investible fund making banks to be rich and declare unholy profits when the production or real sector businesses are declaring losses and closing down.

    In many instances, the CBN Governor had come out to defend the retention of high MPR on the ground that inflation in Nigeria was caused by high level of liquidity in the economy. The appreciation of the naira in recent time and concomitant fall in domestic prices should serve to debunk the CBN management notion that the recent persistent inflationary pressure resulted from high stock of money in the economy. Furthermore, the recovery of huge sums of money in stores, unused buildings, water tanks, cemetery, et cetera implies that the CBN calculation of money in circulation is faulty and has resulted in over-estimation.

    Money that sits in banks vaults, though unproductive, can still be regarded as part of money in circulation because such money can be on the move anytime borrowers approach the banks. The money outside banks but hidden in those obnoxious places are not only unproductive but definitely not part of money in circulation. What this means is that the CBN had been building its policy on falsified data base with concomitant negative results. A very difficult part of it is that the CBN cannot get an accurate figure of the total money stock in those hidden places and I suspect there are still many undetected hidden places where billions of naira is idling away until there is opportunity for them to be exchanged into foreign currencies. I can imagine how the Governor of the Bank of England or the Head of Reserve Bank of the United State would feel when they see, on television, crisp dollars or pound sterling uncovered in some locations in Nigeria. Albeit, their currencies are international and they have complex and efficient way of determining and monitoring global/domestic money supply.

    The truth of the matter is that United States of America and Europe, including Great Britain, which own most of the recovered foreign currencies, run cashless economy. Therefore, banks can only issue few thousands cash to individual customers at any point in time while corporate customers operate on online transactions. So, all the millions of foreign currencies that were discovered recently must have come through illicit operations such as exchange of naira for foreign currencies at Bureau de Change, from black market operators and even indirectly through the CBN. If the CBN were to check the numbers on the crisp foreign currencies retrieved from the Ikoyi flats, it would see that they are some of the currencies supplied to a number of the Bureau-de-Change or to some banks in the area for distribution to various types of customers (industrial, commercial and personal end users) but cornered by one or few powerful Nigerians. This is one of the reasons why some of us are against the CBN supply of currency to Bureau-de-Change which are private businesses on their own and should be allowed to source for the funds they need, more so when most private individuals who earn foreign currencies from transactions do patronize these outfits to change their money than go to banks.

    Twice, I was on fact finding mission and visited some banks in the morning to request for withdrawal from my domiciliary account. In each case, the staff gave excuses that no foreign currency was available, even without asking if I have domiciliary account with them. In two instances, the bank staff offered to assist me by calling on some ‘bureau-de-change’ staff to provide whatever amount I needed. It is like the case of looking for new currency notes from the bank, you can hardly obtain but if you go to a party at weekend, you can exchange as much as desired from currency vendors. The need to deal with the messy processes in the foreign exchange market to avoid another round of massive depreciation of the naira is urgently required. The current level of intervention cannot be sustained for long unless the country is able to diversify its sources of foreign exchange earnings and reduce speculative activities on naira in the foreign exchange market. I have been advocating, unsuccessfully, since July last year that change in colour of the high denominations of naira with limited period of conversion of old to new currency will neutralize the nefarious activities of such speculators.

     

    • Tella, Ph.D. Professor of Economics writes from Olabisi Onabanjo University, Ago-Iwoye, Ogun State.
  • CBN to sustain intervention

    CBN to sustain intervention

    Naira’s continued gains against the dollar will not deter the Central Bank of Nigeria (CBN) from sustaining its intervention in the interbank market, the apex bank said yesterday.

    The CBN has since February been pumping in dollars in all segments of the interbank market to ensure liquidity and availability of forex. More than $5 billion has been injected into the market.

    The naira has gained substantial ground against the United States dollar, selling at N363/$1 compared to the previous rate of N378/$1, the apex bank said.

    According to market sources, the CBN is determined to ensure a convergence between the interbank and Bureau de Change (BDC) rates soon, hence the move to continue its intervention in the interbank market.

    The regulator had last Tuesday intervened in the inter-bank market to the tune of $482.6 million with the Retail SMIS allocated the sum of $285,779,350, while the $100 million was offered in the Wholesale SMIS auction window.

    The Small and Medium Enterprises (SMEs) window got an allocation of $52 million, while the invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance, medicals and tuition fees, among others, was allocated the sum of $45 million.

    Speaking at the weekend, CBN spokesman Isaac Okorafor said there were indeed plans by the CBN to make necessary interventions in the forex market, in line with its earlier resolve to achieve forex rates convergence and liquidity in the market.

    On how the Bank hoped to sustain its interventions, Okorafor said the CBN had enough forex to meet the requirements of all customers, who had genuine need for the dollar. He also expressed optimism that the current policy of the bank and the cooperation of all stakeholders would check the unwholesome activities of speculators.

    Okorafor reiterated the bank’s commitment to ensure that there is enough supply of forex to genuine customers to achieve the goal of forex rates convergence.

    Indications at the weekend suggested that the rates between the interbank and BDC may soon converge, with the difference now down to a few naira. Observers, while commending the bold move of the CBN, urged the bank to remain committed to its goal for the benefit of the Nigerian economy.

  • Lawyer sues Access Bank for failed N40, 000 ATM Transaction, demands N100m

    Lawyer sues Access Bank for failed N40, 000 ATM Transaction, demands N100m

    Mr Musa Baba-Panya, an Abuja-based Legal Practitioner has instituted a suit in the FCT High Court against Access Bank Plc claiming N100 million for alleged defamation of his character.

    Mr Chidi Ifeonye, the counsel to the plaintiff, who filed the suit on May 26, made the process available to newsmen on Wednesday in Abuja.

    The plaintiff had instituted the suit as a result of the bank’s failure to reverse the N40, 000 he claimed was debited from his Diamond bank account while using the defendant’s ATM facility on March 11.

    The plaintiff had described N100 million claims as general, aggravated and punitive damages for the defamation.

    Baba-Panya said that the defendant’s alleged recalcitrant attitude caused him grave embarrassment, hardship and trauma.

    “After a considerable waiting, no response of any sort came forth from the defendant, till date, thus was left with no option than to institute this action,’’ he said.

    The plaintiff averred that the money in debt was meant to execute a printing project at the ECWA Church, Maitama on that fateful day.

    “The development was most unpleasant to both the printer and I. It especially put me in unwarranted ridicule and scrutiny among the Church folks,’’ he said.

    The plaintiff is seeking a declaration finding the defendant liable for the defamation of his character via its negligent conduct against him.

    The plaintiff is also urging the court to compel the bank to write a letter of apology copying the Customer Relation Manager platforms of the CBN-interbank system.

    He also prayed for apology letter to be forwarded to the Customer Relation Manager of Diamond Bank Plc and to the ECWA Church, Maitama, Abuja.

    Baba-Panya was also seeking the award of N40, 000 being the alleged liquidated money in debt.

    He also sought an interest award at inter-bank rate on the money debt effective March 11, until final judgment.

    The plaintiff further asked for award of 10 per cent interest on the final judgment sum until final liquidation.

    He urged the court to grant him an award of N500, 000 as cost of legal cost, including solicitor’s fees.

    The matter has however not been slated for hearing.