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  • CBN licenses 11 new Int’l money transfer operators

    CBN licenses 11 new Int’l money transfer operators

    The Central Bank of Nigeria (CBN) yesterday licensed 11 new International Money Transfer Operators (IMTOs). The new entrants are joining Western Union, MoneyGram and Ria, which had been cleared by the CBN.

    The new operators are Trans-Fast Remittance LLC; WorldRemit Limited, UAE Exchange Centre LLC; Wari Limited, Homesend S.C.R.L, Small World Financial Services Group Limited and Weblink International Limited. Others are Cash Pot Limited, DT&T Corporation Limited, Fiem Group LLC DBA Ping Express and CP Express Limited.

    In a statement announcing the new operators, the CBN Acting Director, Corporate Communications, Isaac Okorafor, said the policy shift was in furtherance of efforts to liberalise the Foreign Exchange Market, ensure liquidity and make foreign exchange more readily available to low end users.

    He explained that the new operators were licensed in line with the existing guidelines on International Money Transfer Services in Nigeria (2014):

    The CBN also reiterated its commitment to providing an enabling environment for international money transfer services.

    The CBN had earlier announced an ongoing licensing of interested IMTOs. Okorafor, dismissed allegations that the CBN had stopped licencing the IMTOs.

    He explained in a statement that in spite of its transparency in the licensing IMTOs, some persons have continued to allege that the bank has stopped the exercise.

    “The CBN wishes to state, unequivocally, that it has not foreclosed the licensing of interested players in the IMTO space in Nigeria. Therefore, interested applicants are required to forward their requests for licensing to the Director, Trade and Exchange Department of the CBN, in line with the CBN Guidelines on International Money Transfer Services in Nigeria (2014), which among other things, specifies the minimum technical and business requirements for various participants in the international money transfer services industry in Nigeria,” he said.

    It added: “The CBN remains committed to providing an enabling environment for international money transfer services in Nigeria. It is, however, important to emphasise that a prospective player shall first obtain the requisite licence to operate in Nigeria as an IMTO”.

    “The CBN wishes to advise Nigerians at home and in the Diaspora to beware of the unwholesome activities of some unlicensed IMTOs in Nigeria. This warning has become necessary because of the activities of some unregistered IMTOs, whose modes of operation are detrimental to the Nigerian economy,” Okorafor said.

     

  • Fed Govt earns N677.8b in second quarter, says CBN

    Fed Govt earns N677.8b in second quarter, says CBN

    FACTS AND FIGURES

    •Forex inflow $5.89b
    •Forex outflow $6.09b
    •Banks’ assets/liabilities $31.23tr
    •Non-oil export dropped 20.4%
    •Inflation rate 16.5%

    Federal Government retained revenue for the second quarter of this year stood at N677.88 billion, the Central Bank of Nigeria (CBN) Economic Report for the second quarter released yesterday said.

    According to the report, the figure is above the receipts in the preceding quarter by 34.2 per cent, but lower than the quarterly budget estimate by 33 per cent.

    The Federation Account accounted for 47.7 per cent of the total revenue. “Other Oil Revenue”, Federal Government Independent Revenue, Value Added Tax (VAT) and Nigeria National Petroleum Corporation (NNPC) Refund and Exchange Gain accounted for 30.0 per cent, 14.9 per cent, 4.1 per cent and 3.3 per cent.

    Provisional data indicated that Federal Government expenditure for the second quarter stood at N1.76 trillion, which was above the provisional quarterly budget estimate and the level at the end of the preceding quarter by 12.8 and 58.1 per cent. This was attributed, mainly, to the rise in both recurrent and capital expenditure.

    A breakdown of the expenditure showed that the recurrent component accounted for 72.6 per cent. Capital and statutory transfers constituted 19.8 per cent and 7.6 per cent.

    Of the recurrent expenditure, the non-debt component represented 73.4 per cent. Debt service payments accounted for the balance of 26.6 per cent.

    The fiscal operations of the Federal Government thus, resulted in an estimated deficit of N1.09 trillion, indicating an increase of 96.4 per cent above the provisional quarterly budget deficit of N555.49 billion.

    The CBN data also showed that foreign exchange inflow and outflow through the apex bank amounted to $5.89 billion and $6.09 billion, resulting in a net outflow of US$0.20 billion.

    Foreign exchange sales by the CBN to the authorised dealers amounted to $4.31 billion. The average exchange rate of the naira against the dollar at the inter-bank was N209.13 to dollar.

    Also, assets and liabilities of the commercial banks stood at N31.23 trillion, at the end of the preceding quarter of 2016, representing an increase of 9.6 per cent over the level at the end of the preceding quarter.

    The funds were sourced, mainly, from time, savings and foreign currency deposits, foreign liabilities and unclassified liabilities. The funds were used mainly to increase claims on private sector, acquire foreign and unclassified assets.

    The CBN’s credit to the commercial banks rose by 34.2 per cent to N1,041.73 billion.

    Banks’ specified liquid assets stood at N6.53 trillion, representing 34.9 per cent of their total current liabilities.

    The gross external reserves, the report said, stood $26.51 billion, showing a decline of three per cent and 6.5 per cent, compared with the levels in the preceding quarter and the corresponding period of 2015. The development, relative to the preceding quarter, was due to increased sales of foreign exchange at the interbank market.

    “A breakdown of the official external reserves showed that CBN reserves stood at $19.44 billion (73.3 per cent), Federation reserves, $2.45 billion (9.3 per cent), and the Federal Government reserves, $4.61 billion,” it said.

    Provisional data showed that total non-oil export earnings stood at $576.97 million, fell by 43.2 per cent, below the level in the preceding quarter. The development, relative to the preceding quarter, was attributed mainly to the significant decline in receipts from manufactured and food products as well as minerals export.

    “A breakdown by sectors showed that proceeds from the export of agricultural, minerals, industrial, manufactured products, food products and transport sectors stood at $196.87 million, $185.51 million, $84.34 million, $79.44 million, $30.68 million and $0.12 million respectively.

    The percentage shares of agricultural, minerals, industrial, manufactured products, food products and transport sectors in the total non-oil export proceeds were 34.1 per cent, 32.2 per cent, 14.6 per cent, 13.8 per cent, 5.3 per cent and 0.02 per cent, respectively, the CBN said.

    The invisible sector accounted for the bulk (34.1 per cent) of total foreign exchange disbursed , followed by the industrial sub-sector (22.5 per cent). The contributions of other sectors in a descending order included: minerals and oil sub-sector (23.3 per cent), manufactured products (11.3 per cent), food products (6.3 per cent), transport sector (1.7 per cent) and agricultural products (0.8 per cent).

    The report said crude oil export stood at 1.09 million barrel per day (mbd) or 100.28 mb. This represented a decline of 20.4 per cent, compared with 1.37 mbd or 124.67 mb, recorded in the preceding quarter. It said supply disruptions owing to continued attacks on oil installations by vandals accounted for the decline in crude oil production.

    It said the inflation rate at the end of the review quarter, on a year-on-year basis, was 16.5 per cent, compared with 12.8 and 9.2 per cent in the preceding quarter and the corresponding period of 2015, respectively. On a 12-month moving average basis, the inflation rate was 11.4 per cent, indicating a 1.6 percentage points increase, above the level recorded in the preceding quarter.

     

  • Foreign investors renew interest in economy with $327m trades

    Foreign investors renew interest in economy with $327m trades

    •NBS Q2 GDP data out tomorrow

    The currency market registered $327 million worth of trades yesterday, about six times more than its usual volume, the Central Bank of Nigeria (CBN) has said.

    This is coming as the Nigeria Bureau of Statistics (NBS) is set to release the Gross Domestic Product (GDP) and foreign trade estimates for the second quarter tomorrow. Also expected to be out are unemployment and underemployment watch, July 2016 Consumer Price Index and Inflation, Capital Importation and Foreign Direct Investment (FDI) report.

    Of these, focus will mostly be on the GDP report and July 2016 inflation.

    The transaction from investors included a single $270 million deal at N345 per dollar, by foreign investors buying local currency bonds, Bola Onadele, the managing director of FMDQ OTC Securities Exchange, told Reuters.  Other transactions were carried out from N314.50 to N317.34 per dollar.

    He explained that average trading is around $50 million a day on normal days and might reach $100 million on days the CBN intervenes in the currency market.

    Traders also said the CBN sold an undisclosed amount of dollars, close to the end of market session, to help prop up the naira. The currency closed at N305.50, around the level where it’s closed for the past week.

    Yesterday’s surge in trading came after the CBN said it will offer N212.85 billion in treasury bills maturing between 91 days and one year tomorrow. The debt would be sold tomorrow.

    The bank has been selling short-dated open market bills at yields as high as 18 per cent in an effort to attract offshore funds, most of who fled Nigeria’s bond and equity markets during a financial crisis that began when oil prices plunged.

    The Managing Director, Afrinvest Nigeria Limited, Ike Chioke said the downtrend in growth of the economy which began in late 2014 due to falling oil prices, has persisted into this year as foreign exchange (forex) market illiquidity, downtime in power supply and depressed real consumer income continue to weigh on productivity, investment and consumer spending.

    “Developments in the forex market, which has seen the naira depreciate significantly against a host of foreign currencies, as well as increases in power and fuel tariffs have had passed through on consumer prices with Inflation rate in June 2016 far above the CBN’s allowable band of six to nine per cent and an eight – year high of 16.5 per cent from 9.6 per cent in January.

    Ahead of tomorrow’s data release, Chioke said in the first quarter, GDP contracted 0.4 per cent Year-on-Year (Y-o-Y) as both oil (-1.9 per cent) and non-oil (-0.2 per cent) sectors contracted. The services sector, which held aggregate growth all through last year as the industrial sector entered a recession, recorded its worst quarterly performance with a minimal 0.8 per cent Y-o-Y expansion relative to 4.7 per cent Y-o-Y growth in similar period of 2015, while industrial sector contracted 5.5 per cent Y-o-Y and agricultural sector grew 3.1 per cent Y-o-Y.

    “We expect a further rise in inflation rate for June 2016 driven mainly by increases in both the food sub-index (on account of higher domestic and imported food prices) and the core sub-index (driven by higher energy prices) within the period.

    “As a result we forecast M-o-M inflation growth in July at 1.6 per cent moderation from 1.7 per cent in June, implying a 17.6 per cent headline Inflation rate and 1.1 percentage points increase from June 2016,” he said.

  • N2.3b NNPC cash: CBN may fine banks

    N2.3b NNPC cash: CBN may fine banks

    The nine commercial banks barred by the Central Bank of Nigeria (CBN) from the interbank foreign-exchange market may be fined, analysts at Lagos-based CSL Stockbrokers Limited said at the weekend.

    Other financial experts also estimated that although there was no precedence of the case, the apex bank may impose a fine not less than N450 million on all the nine lenders, representing N50 million each to the affected lenders.

    Former Executive Director, Keystone Bank, Richard Obire said: “The CBN may want to demonstrate to the banks that it took their offences very seriously and make it painful to them. The regulator may want to make the fines painful to them, as a deterrent to others. I see not less than N50 million fine on each of the affected banks, and that’s N450 million in all,” he predicted.

    Obire said although the banks are already facing hard times, but letting them go without a fine, could provide a wrong precedence for the industry.

    The CBN suspended nine lenders for not transferring around $2.3 billion of deposits for two state oil and gas companies, Nigerian National Petroleum Corporation (NNPC)  and Nigeria LNG Ltd., to a government account. The banks, whose suspension would remain in force until they remit all the funds to the TSA, are United Bank for Africa (UBA) $530million; First Bank of Nigeria (FBN) $469million; Diamond Bank Plc ($287million); Sterling Bank Plc ($269million); Skye Bank Plc ($221million); Fidelity Bank ($209m); Keystone Bank ($139million); First City Monument Bank (FCMB) $125million; and Heritage Bank ($85million). UBA has refunded its own portion of the fund and was cleared by the CBN.

    UBA has “completely remitted all NNPC and NLNG dollar deposits,” Charles Aigbe, a spokesman in Lagos, said in a statement. The banks probably won’t be able to issue letters of credit and will lose revenue from trading foreign-exchange until their suspensions are lifted, CSL said.

    “The CBN may impose various fines,” analysts at CSL said in an e-mailed note to Reuters. “Of greater concern to us is the ability of these banks to remit these funds given the illiquidity in the market. Inability to remit these funds will mean staying away from all forex transactions for an extended period.”

    Banks have suffered a shortage of hard currency for the last two years as oil prices crashed and investors fled when the country imposed capital controls to try and protect the naira. Oil accounts for around 90 percent of exports and the bulk of government revenue. The naira has weakened 42 percent against the dollar since it was devalued on June 20.

    “While most of the banks we spoke to agree that they have these NNPC funds, they do not agree that these were concealed from the CBN,” the CSL analysts said. “A few of the banks blamed their inability to comply on the tight dollar liquidity in the system brought about by the ongoing restructuring of oil and gas loans and the general scarcity of” of foreign exchange.

  • CBN to raise N213b in T-Bills at higher yields

    CBN to raise N213b in T-Bills at higher yields

    The Central Bank of Nigeria (CBN) plans to offer N212.85 billion ($675 million) in Treasury bills maturing between 91-days and one-year on August 31.

    The bank said it would sell N45.85 billion worth of the 91-day bills, N62 billion of the 182-day paper and N105 billion of the 1-year debt. Payment for the purchase will be effected on Thursday, the bank said in a public notice.

    The T-bills’ maturities range between three months and a year and would be raised today, according to the CBN. T-bills 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, help manage banking system liquidity and curb rising inflation.

    The CBN had on August 3, raised N245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. The CBN 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, 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.

    The bank lifted interest rates by 200 basis points last week to 14 per cent to help fight inflation, which hit a 10-year high of 16.5 per cent in June.

  • ASSBIFI to CBN: lift forex ban on banks

    ASSBIFI to CBN: lift forex ban on banks

    The Association  of Senior Staff of  Bank, Insurance and Financial Institutions (ASSBIFI) has urged the Central Bank of Nigeria (CBN) to lift its ban on the nine banks for refusing to remit to the Nigerian National Petroleum Corporation (NNPC) its $2.334 billion in their Treasury Single Account (TSA).

    Last week, the apex bank banned the some money banks from foreign exchange transactions over their refusal to remit the funds.

    The banks and their  debts are United Bank for Africa (UBA), $530million; First Bank of Nigeria (FBN), $469million; Diamond Bank Plc, ($287million); Sterling Bank Plc, ($269million); Skye Bank Plc, ($221million); Fidelity Bank, ($209million); Keystone Bank, ($139million); First City Monument Bank, (FCMB) $125million; and Heritage Bank, ($85million).

    The ban on United Bank for Africa (UBA) by the apex bank was, however, lifted.

    ASSBIFI National President, Comrade Olusola Salako said the ban would not solve the problem but would cause upheaval in the market.

    He said the banks’ inability to pay would only cause panic in the system as the banks would have to seek  loans from international banks to pay the debts.

    He said: “However, the probability for these international banks rendering a helping hand at this time to the banned banks is almost next to zero, at least not until our economic problems have been resolved.”

    Speaking further, he said this ban would only reduce competition in foreign exchange transaction market which would invariably see another round of spike in the dollar against the naira in forex trading until there is a resolution.

    “It is also necessary to state that the possible effects this ban may have on workers in the affected banks cannot be over emphasised.

    “These banks even before the ban had already lost most of its revenue and profit to the TSA policy which saw some of them disengaging their workers to cover for the overturn on profit loss through reduction in overhead.

    “This ban from foreign exchange transaction may further cripple the operations of these banks and further have adverse effect on the already precarious state of their balance sheets.

    “We, therefore, believe that the ban though may be necessary but the timing is not right for the economy. Consequently we advocate the ban be lifted and a more placid approach be engaged in settling the matter,” Salako added.

  • MAN praises new CBN policy

    MAN praises new CBN policy

    Manufacturers Association of Nigeria (MAN) President, Dr. Franks Udemba Jacobs has praised the new Central Bank of Nigeria (CBN) policy on “Foreign Exchange Sales to End Users”, which authorises dealers to dedicate at least 60 per cent of their foreign exchange purchases  to manufacturers, saying it will afford his colleagues the opportunity to determine the exchange rate of the naira to arrest its drift.

    He spoke to The Nation in his office in Ikeja while reviewing the state of the economy and the adverse effect of some policies on the real sector.

    He regretted that the policy reduced the contributions of the manufacturing sector to the Gross Domestic Product (GDP).

    On how the continuous slide of the naira could be arrested, he said manufacturers could stem the tide. He promised to advise his colleagues not to bid too high for dollars as the new policy has given them a strategic role to determine the value of the naira if managed properly.

    He said MAN has a duty to do this because if the fall of the naira was not arrested, importers of machinery and raw materials would be forced to close shop.

    While praising the new policy, Udemba said this was the first time the government was responding to the challenges of the sector, stressing that this was the only way comatose industries could be revived.

    Questioning the impropriety of the exclusion of 41 items from forex market, which he claimed harmed  the sector, he said it has destabilised the real sector and caused the folding of over 56 firms.

    The MAN boss said essential raw materials, which were not available locally, be removed from the list, noting that some products listed as finished products by CBN were actually raw materials for some firms.

    He made a case for the 96 finished products, which he claimed, indigeneous manufacturers  can produce to be included in the list of items not valid for forex to protect the local businesses and retain employment.

    Udemba asked that manufacturers with confirmed letters of Credit issued before the release of the circular on July 25, last year be given priority in forex allocation at the confirmed rate.

    MAN is canvassing the need for  the government to conclude the review of the Export Expansion Grant (EPG) to enable exporters of manufactured products to earn foreign exchange that will mitigate forex scarcity.

  • CBN accuses banks of violating international money transfer rules

    CBN accuses banks of violating international money transfer rules

    The Central Bank of Nigeria (CBN) has accused commercial banks of compromise in the ways they handle proceeds from international money transfer inflows into the country.

    A circular to banks titled: Illicit International Money Remittances Through The Banking System, and signed by CBN Acting Director, Trade and Exchange, W.D. Gotring, accused the lenders of opening multiple illegal company and personal accounts where they harvest dollar proceeds for onward disbursements to recipients in Nigeria.

    The practice, Gotring said, is against guidelines for the operation of International Money Transfer Service (IMTS) in Nigeria of September 26, 2014, warning the lenders to desist from such unwholesome practices.

    “Further to the guidelines for the operation of International Money Transfer Service (IMTS) in Nigeria of September 26, 2014, we have observed that some Deposit Money Banks (DMBs) are operating accounts either as companies or companies masking themselves as individuals for the purpose of illegally receiving money transfer flows into the accounts for onward disbursements to recipients in Nigeria,” he said in the circular obtained yesterday.

    He therefore ordered the lenders to conduct Know Your Customer’s Business (KYCB) checks on all their customers to ensure that they do not transact in illegal/illicit flows and also freeze compromised/ identified defaulting accounts.

    “The CBN therefore reiterates that the DMBs have the absolute responsibility to conduct Know Your Customer’s Business (KYCB) checks on all their customers to ensure that they do not transact in illegal/illicit flows. Consequently, DMBs are hereby directed to identify and freeze accounts receiving illicit flows,  submit the mandate and account details of these accounts held in naira or foreign currency to the CBN for onward reporting to the security agencies,” he said.

    Findings by The Nation showed that the banks have continuously been engaging in illegal foreign exchange transactions to gain access to large chunk of dollar flows from the Diaspora estimated at $21 billion annually and is expected to hit $35 billion this year after the CBN devalued the naira. The naira devaluation remains a big incentive for Nigerians in Diaspora to send more dollars home as they would get more value.

    Besides, the World Bank Migration and Remittances Factbook 2016 released showed that Nigerians living abroad sent home $21 billion in 2015. The figure, it said, is by far the largest volume of remittances to any country in Africa and the sixth largest in the world.

    “The United States is the biggest remittance sending country to Nigeria, followed by the United Kingdom. Nigerians receive $5.7 billion in remittances sent from friends and family members in the US and $3.7 billion from the United Kingdom in 2015 and a total of $21 billion within the year. Nigeria is also the third largest destination country for migrants from other African nations,” it said.

    It says a quarter of a billion people around the world are migrants, and over $600 billion in remittances are sent annually.

    The global lender says international remittances to developing countries reached over $441 billion in 2015, more than foreign direct investment and thrice more than official aid flows.  It says 34 per cent of all international remittances are sent between developing countries.

    It disclosed that remittances constitute more than 10 per cent of Gross Domestic Product (GDP) for 25 countries. It insists that international remittances have been growing steadily and remain stable even during episodes of financial volatility.

    “In 2015, the number of international migrants surpassed 250 million, a quarter of a billion people, globally. International migrants now represent more than 3.4 per cent of the world’s population. South-South migration is now larger than South-North migration. Over 38 per cent of international migrants have migrated from developing countries to other developing countries. 14.4 per cent of international migrants are refugees,” it said.

    Speaking on the development, Senior Mobile Analyst at WorldRemit, one of the global money transfer firms, Alix Murphy, says the World Bank’s latest report shows that countries have now hit two significant milestones – quarter of a billion migrants globally and $600 billion of remittances sent annually.

    She believes that despite being the biggest economy in Sub-Saharan Africa, Nigeria’s financial system is still deeply fragmented, making sending and receiving money very challenging for ordinary Nigerians. According to her, 56 per cent of Nigerians are unbanked, so offering a variety of pay-out options, including direct to bank account and instant cash pick-up, is extremely important for reaching everyone in society.

     

  • Banks’ bad loans rise to N649b – CBN

    Banks’ bad loans rise to N649b – CBN

    The Central Bank of Nigeria Governor, Godwin Emefiele, on Wednesday said non-performing loans (NPLs) in the banking sector rose by 78 per cent year-on-year to N649.63 billion in May this year.

    Speaking at the Third National Credit Reporting Conference organised by the Credit Bureau Association of Nigeria (CBAN) in Lagos, the CBN boss said the current state of bad loans in the sector implies that efforts should be doubled in the area of credit information sharing in order to stem this worrisome trend.

    He said the apex bank has made it mandatory for all financial institutions to have data exchange agreements with at least two credit bureaux.

    “All banks are required to obtain credit report from at least two  credit bureaux before granting any facility to their customers whilst quarterly portfolio checks must also be carried out to enable them determine borrowers’ current exposure to the financial system,” he said.

    Emefiele, who was represented by the Branch Controller at CBN Lagos Office, James Iyari, said the apex bank has also approved the payment of one-off sign on fees with credit bureaux for all the microfinance banks and other micro financial institutions licensed by the CBN.

    This, he said, would support effective use of the infrastructure provided by the private credit bureaux with a view to deepening the subsector.

    Emefiele also warned that bank customers that continuously issue dud cheques to their clients will have their cheque booklets withdrawn by their banks.

    He said lenders have the right to withdraw the cheque books from customers that record three defaults.

     

  • CBN sanctions nine banks for hiding NNPC’s $2.274b

    CBN sanctions nine banks for hiding NNPC’s $2.274b

    UBA: we’re not owing

    Fidelity, Diamond seek to pay balance in naira

    FCMB, CBN ‘in talks’

    Nine deposit money banks (DMBs) are in trouble for hiding over $2.274 billion belonging to the Nigerian National Petroleum Corporation (NNPC) from the Treasury Single Account (TSA).

    The Central Bank of Nigeria (CBN) has banned the banks from the foreign exchange market.

    The banks, whose suspension would remain in force until they remit all the funds to the TSA, are United Bank for Africa (UBA) $530m; First Bank of Nigeria (FBN) $469m; Diamond Bank Plc ($287m); Sterling Bank Plc ($269m); Sky Bank Plc ($221m); Fidelity Bank ($209m); Keystone Bank ($139); First City Monument Bank (FCMB) $125m; and Heritage Bank ($85m).

    President Muhammadu Buhari has been briefed on the breach by the banks. They have been mandated to move the monies to the TSA before any consideration for their re-entry into forex trading.

    Two days ago, the banks came under fire from the apex bank, which accused them of engaging in round tripping and threatening to punish them for doing so.

    Many of the banks declined official comments on the development.

    UBA said: “Our attention has been drawn to report of the ban of UBA from the foreign exchange market by the CBN over the non-remittance of NNPC/NLNG dollar deposits.

    “We wish to state very categorically that UBA has completely remitted all NNPC/NLNG dollar deposits.

    “We thank all our numerous customers, business partners and other stakeholders who have reached out to us on account of this report.”

    But some sources, who asked that their identities be veiled, said the issue was being resolved. They said the matter was not an infraction in the sense of the word, adding that if it were so, the apex bank would have since debited their accounts at source.

    An official of Fidelity Bank said: “NLNG was paying dividends from the investment of the goverment in the company  to the NNPC.

    “These dividends had accumulated to about $5billion.

    NNPC was investing this dividend payment in a dedicated account as fixed deposits with commercial banks.

    “When the goverment raised the issue that the dividends should have been paid into the Federation Account, the CBN Governor invited the CEOs of all the banks that had the funds to Abuja for a meeting on the following:

    • a reconciliation of the amount in each bank with the records of CBN/NNPC; and
    • agreed a repayment time table of the funds with the banks;

    “As at the time the TSA Implementation commenced in September 2015 some of the banks had paid back over 50 per cent of the funds based on the repayment timetable;

    “This repayment by the banks was the bailout of $2.1bn (N414billion) that was shared by the FGN and state governments in July/August 2015

    “When the TSA commenced, the banks reported these funds as part of goverment deposits they had, but it was not remitted like other TSA funds because of the remittance timetable that had been agreed with the CBN

    “The NNPC invited banks earlier this year to submit a revised repayment plan for the balance of the funds

    “From the above you can see that the CBN and NNPC had a clear picture of the status of these funds with the banks”, the official stated.

    An official of FCMB who spoke on condition of anonymity, said: We are working with the Central Bank of Nigeria on an amicable resolution. This is really a function of the dire macroeconomic situation and liquidity in the FX markets, rather than concealment, or wilful non-compliance by banks.”

    A Diamond Bank source said bank never concealed any funds. The official, who asked not to be named, said Diamond Bank had actually paid $500million to date. He said the banks approached the CBN, pleading that the balance be paid in naira, since the value of the local currency has fallen so badly, as well as the fact that there is acute shortage of the greenback.