Tag: cbn

  • Banks remain safe, says CBN

    Banks remain safe, says CBN

    The Central Bank of Nigeria (CBN) yesterday assured bank customers that none of the 22 commercial banks in the country is in distress.

    CBN Acting Director of Communication, Isaac Okoroafor, said in a statement issued yesterday that  the infusion of a new Board and Management for Skye Bank Plc remains a proactive regulatory action meant to ensure that the lender does not continue to fail in its relevant prudential ratios.

    “Neither Skye Bank nor any other bank in the industry is in distress. Therefore, the CBN would like to request the general public to ignore speculations or rumours to the contrary as they could only be the handiwork of mischief makers who do not mean well for the Nigerian banking system and its economy,” he said.

    He explained that as the regulator of the industry, the CBN reassures the banking and general public that their deposits remain safe in any Nigerian bank and that there is, therefore, no need for panic withdrawals from any bank.

    He said by both the CBN’s examination reports as well as analysis from market watchers, International Credit Rating Agencies, and Development Finance Institutions, the Nigerian banking industry remains strong in spite of the global economic challenges emanating from the collapse of global commodity prices. “We therefore urge the banking public to remain calm and go about their normal businesses without panic. It is important that we do not create problems when none exists,” he said.

  • CBN pegs liquidity ratio for commercial banks at 30%

    CBN pegs liquidity ratio for commercial banks at 30%

    The Central Bank of Nigeria (CBN) has said commercial banks will need to maintain minimum liquidity ratio of 30 per cent in line with regulatory requirement. The new guideline is contained in te Monetary, Credit, Foreign Trade and Exchange Policy for fiscal years 2016/2017 released by the apex bank.

    Liquidity ratios are a class of financial metrics used to determine a bank’s ability to pay off its short-term debts obligations. It is the total specified liquid assets of a bank divided by total current liabilities. The higher the value of the ratio, the larger the margin of safety a bank possesses to cover short-term debts.

    The apex bank however said merchant and non-interest banks shall continue to maintain a minimum Liquidity Ratio (LR) of 20 and 10 per cent, respectively, subject to review from time to time.

    According to the guidelines, discount houses shall continue to invest at least 60 per cent of their total liabilities in government securities in the 2016/2017 fiscal period, while the ratio of individual bank loans to deposits, is retained at 80 per cent.

    It said the major tool for liquidity management will continue to be Open Market Operation (OMO) Auctions will be conducted through the sale and purchase of Treasury Bills and CBN Bills at the two-way quote trading platform.

    The Bills’ tenor and volume, it said, would be influenced by the liquidity conditions in the banking system. “All authorized Money Market Dealers (MMDs) which include commercial and merchant banks, non-interest financial institutions and discount houses shall continue to be the participants at the OMO. In addition, OMO auctions will be complemented by repurchase agreements (repo/reverse repo) at appropriate rates based on existing Monetary Policy Rate,” it said.

    It said cash reserve and liquidity ratios shall continue to serve as prudential and liquidity management tools.

    “The Net Open Position (NOP) limit (long or short) of 20 per cent of shareholders’ funds unimpaired by losses, effective from January 2014, shall continue to apply during the programme period. Accordingly, all banks are to ensure that the difference between the overall foreign currency assets and liabilities (on and off balance sheet) shall be within the prescribed limit,” it said.

    “Furthermore, the requirement that aggregate foreign currency borrowing of a bank excluding inter group and interbank (Nigerian banks) borrowing should not exceed 75 per cent of its shareholders’ funds unimpaired by losses shall be retained”.

  • Nigerian banks are healthy, says CBN

    Nigerian banks are healthy, says CBN

    Banks are coping very well with the sudden movement of public funds from their custody to the Central Bank of Nigeria (CBN) under the Treasury Single Account (TSA), the Central Bank of Nigeria (CBN) has said.

    The apex bank issued the clean bill of health yesterday following reported attempts to demarket some banks after CBN Governor Godwin Emefiele  announced top management changes in Skye Bank.

    Reacting to attempts to de-market Heritage Bank, a Senior official of the CBN, said:  “Like most banks in Nigeria, Heritage Bank is learning to cope with the sudden decision of the Federal Government to domicile all public sector funds with the CBN under the TSA regime.

    “Other than this sudden movement of all public sector funds to the apex bank, Heritage Bank remains one of the healthiest and well managed banks in Nigeria. It’s internal mechanisms and controls are strong and the bank has practically overcome the shock most banks suffered as result of the domiciliation of all public sector funds with the regulator following the full implementation of the TSA regime.”

    A  shareholder of the bank, Alhaji Musa Ibrahim Misau, yesterday in Abuja, denied the claim of an online media platform that the bank is co-owned by the former Chairman of Skye Bank, Dr. Tunde Ayeni and the Senate President, Dr. Bukola Saraki.

    “We are miffed at the attempt by certain persons, or groups who do not mean well for the economy of our great country and indeed the economic agenda of our dear President, to negatively target Heritage Bank, a bank that the CBN and several local and internal rating agencies have ranked among the healthiestin Nigeria, as a struggling bank. This  is a glaring case of de-marketing and we have since drawn the attention of the CBN to this  dangerous trend,” he stated.

    He said Ayeni has less than one per cent share in Heritage Bank and Saraki has no shares or any form of ownership stakes in the bank

    “It is not a secret that the owners and key shareholders in Heritage Bank bought off the defunct Societe Generale Bank (SGBN) which was owned by the Saraki family. The Saraki family was out-rightly bought out. “The family, including Dr.  Saraki does not have a dime in Heritage Bank. We have in just a few years built this bank to a colossus that has become the envy of the sector and we are not going to sit by and allow ill-intentioned persons to de-market Heritage Bank,” he said.

  • Alleged N8b currency fraud: Court  denies bail to CBN, bank workers

    Alleged N8b currency fraud: Court denies bail to CBN, bank workers

    •Judge fixes Sept 26, 28 for trial

    The hope of getting bail for workers of Central Bank of Nigeria (CBN) and some commercial banks involved in the alleged N8 billion mutilated currency fraud was yesterday dashed, after a year behind prison.

    A Federal High Court sitting in Ibadan dismissed bail applications filed by the defendants.

    The applications, which were filed in three batches, saw some of the defendants appearing accordingly.

    The first batch involved Kolawole Babalola, Olaniran Muniru Adeola, Togun Kayode Phillips, Isaq Akano, Ayodele Festus Adeyemi, Oyebamiji Akeem, Ayodeji Aleshe and Ajiwe Sunday Adegoke.

    But their counsel Mr. Olalekan Ojo failed to appear in court.

    The court was told that he was sick and the ruling was stalled.

    The second batch included the bail application for the 2nd and 3rd defendant – Olaniran Muniru Adeola and Togun Kayode Phillips – who also appeared in the first batch.

    Justice Abdul-Malik J.O., in her ruling on the defendants, said: “Having considered the fact of the case, the findings and decision of the appellate court, the court stood heavily against the bail application for the 2nd and 3rd defendant applicants, and the application is hereby dismissed.”

    Also on the bail application for third batch involving the 4th and 5th

    defendants – Oni Ademola and Ayodele Festus Adeyemi), Justice Abdul-Malik said: “ There were substantial evidence gathered against the defendants after the administrative bail granted them, and there is every likelihood that having known the weight of the prove of evidence gathered against them and the severity of the punishment, the defendants will jump bail, if granted.

    “I, therefore, rule that the bail application for the 4th and 5th defendant applicants failed and ordered accelerated trial.”

    The judge, in her two-hour ruling, also fixed 26 and 28 September for trial.

    The CBN had on November 3, 2014, lodged a petition, inviting the EFCC to take over the investigation and prosecution of the cases involving the swapping of currency boxes containing mutilated naira notes meant for routine destruction at its Ibadan branch.

    The suspects are facing a 28-count, including conspiracy, abuse of office, stealing, false declaration of actual amount, concealing of property and fraudulently acquiring assets in excess of their legitimate and provable income.

    The offence is punishable under Section 7(2) of the Bank Employees etc (Declaration of Assets) Act, CAP. B1, Laws of the Federal Republic, Nigeria 2004.

  • CBN dissolves Skye Bank board

    CBN dissolves Skye Bank board

    Appoints Abero as new MD

    Central Bank of Nigeria (CBN) on Monday sacked top executives of Skye Bank Plc over failure to meet required capital adequacy ratio, poor liquidity ratio and high level of non-performing loans.

    The bank’s Managing Director/Chief Executive Officer, Timothy Oguntayo, and the chairman resigned before the CBN announcement.

    Mr. Tokunbo Abero has been appointed the new Group Managing Director/ CEO, while M.K Ahmad is the new Chairman of the bank.

    The Governor of CBN, Godwin Emefiele, assured customers that the bank is not in distress.

     

     

     

     

  • CBN fire victim relives healing at LASUTH

    CBN fire victim relives healing at LASUTH

    •Patient eats 20-30 eggs daily

    A fire victim, Kelechi Okoroji, has praised the Lagos State University Teaching Hospital (LASUTH) management for his near-full recovery within three months.

    Okoroji urged Nigerians to have confidence in the country’s doctors, saying they remain among the best and can compete with their counterparts abroad.

    Okoroji spoke with the News Agency of Nigeria (NAN) on how LASUTH has been handling his case following a major fire accident.

    NAN reports that Okoroji suffered skin injuries from the fire that occurred at the Central Bank of Nigeria (CBN) Zonal headquarters in Calabar, the Cross River State capital, last March 11.

    He said he was referred to LASUTH for rehabilitation following initial treatments at the University of Calabar Teaching Hospital (UCTH).

    “I was a 75 per cent degree burn patient, which many thought was a hopeless case before I was referred to the Burns and Trauma Section of LASUTH.

    “There, I have been undergoing rehabilitation by a team of hardworking and committed medical personnel led by Dr Adedayo Buhari.”

    NAN reports that Buhari, a burn and reconstructive surgeon, has been on the staff of LASUTH’s Burns and Trauma Centre for about two years

    Okoroji said his condition after the incident was better imagined than experienced, adding that he is only lucky to be alive to narrate his story.

    “I am happy to say that, our medical system condemned by many as being unprofessional, was able to restore me to life. We need to have a rethink about our medical services. My case had been previously regarded as hopeless by many which made me to have a thin hope of survival. But, here I am being treated in one of the best facilities in the country. However, the doctors and nurses that treated me never gave up hope on my survival; they kept on assuring and encouraging me that I was going to survive during treatment. Imagine if I had been flown abroad without trusting the capable hands we have here, would there have been any chance of survival over there?”

    He praised the doctors and the nurses for their dedication to work.

    Okoroji advised teaching hospitals to always admit those with passion for the job as students so that they can acquire requisite trainings to handle cases similar to his.

    Okoroji also lauded the team for its encouragement during the treatment, saying: “During the treatment, I was advised not to cry or shout, so as not to lose more blood.”

    Okoroji called for more specialist hospitals for burn victims in other parts of the country so as to help those who may not make it to Lagos.

    “I think if we have about three of such institutions in the country and well equipped with medical personnel and equipment, we will be better for it. If Lagos State can build this state-of-the-art centre for us, other states should also emulate it and we will not need to travel abroad for burn surgery. God really helped the hospital to rescue me; I have only spent three months and some days between March and now when I was referred to LASUTH.”

    He said the country could combat medical tourism abroad by building hospitals with modern facilities, as there are many professionals to man them.

    “During my stay here in LASUTH, I have seen nationalities of other countries that came for treatment.

    “I am with the highest degree of burns with blood infection, others were about 50 per cent; even the nurses in Calabar doubted my survival.

    “In all, I give glory to God for my survival and equally thank the LASUTH management and staff for putting me back on my feet,’’ he said.

    Dr Buhari, who led the team that handled Okoroji’s case, said the doctors never doubted his survival because of the available facilities and expertise at LASUTH.

    “LASUTH was able to handle Okoroji’s case because we have the manpower and the facilities to handle such severe cases. Our admission rate in LASUTH is high with 5-burn patients on admission being handled by two burn-consultant surgeons and some well trained nurses. The ratio of doctor to burn patient in an ideal setting is 1 to 5, so we still need more to cope with the population of our patients,” he said

    With adequate training, he said, Nigeria would get it right.

    Buhari said his specialty was to cater for burn cases, either severe or mild, adding that the hospital has been handling such cases successfully in the past years.

    “Okoroji’s case is one of the most difficult cases I have ever managed because of the severity of his burn which was 75 per cent with deep and severe sores. There were so many bacteria in his blood streams as well as suffering from jaundices and fever. So, we have to be treating all of them simultaneously which makes his case very complicated. We have to review our antibiotic in his later condition. He was placed on special diets because he had lost virtually the first layer of his skin. This requires more protein before it can get healed. We advised him to have high calories and protein with good wounds’ care and special antibiotic treatment,” he said.

    Buhari, a graduate of the University of Jos, said the knowledge and prescription of the right nutrition helped in rehabilitating Okoroji.

    This is because nutrition is an essential key to burn patient’s rehabilitation, he said.

    “Adequate nutrition is the key to his rehabilitation; we also give him food supplement because protein is the key; he eats about 20 to 30 eggs in a day.

    “We have also been counselling him on the importance of this nutrition which he himself has been struggling to abide with because it is not easy being on such diet.

    “He also had to endure aggressive sore dressing because of the wounds,” he said.

    Buhari, however, urged the three tiers of government to increase the capacity for the management of burn and reconstructive surgeries in the country.

    “The number of those that can handle burns in the country is inadequate and there is the need for governments to sponsor more people for training within and outside the country.

    “We need to be abreast of new methods of treating burns, most especially, as it concerns special nutritious for burns’ patients.

  • Buhari, CBN and naira devaluation

    Buhari, CBN and naira devaluation

    Times without number President Muhammadu Buhari has stated his opposition to the devaluation of the naira. When he has the chance he recalls with fondness the glory days of our national currency and bemoans the fate that has befallen it in recent times.

    One such occasion was when he hosted prominent members of the business community at the Presidential Villa, Abuja roughly a week ago.

    “I don’t like the returns I get from the CBN concerning the devaluation of the Naira.  In August 1985, the naira was N1.3 to a dollar but now you need N300 or N350 to a dollar. What do we derive from that? How much benefit can we derive from this ruthless devaluation of the naira?” he wondered.

    “I’m not an economist neither a businessman, I fail to appreciate what the economic explanation is. What has happened to us now is that we have manoeuvred ourselves into mono-economy which led to the collapse we are seeing now.”

    The president’s remarks confirm that he was dragged kicking and screaming to back the CBN’s resort to a more flexible exchange rate policy. That’s just another way of saying that devaluation was sold to him wrapped in sugar-coated economic jargon.

    He signed on and told the country so in his May 29 Democracy Day broadcast. At that point the official rate was N199 to the dollar, while on the black market the currency was being exchanged for as high as N370 to the greenback.

    What was going on was that the CBN found itself in an impossible situation where it could not meet demand for forex and was blowing reserves to maintain the artificial N199 peg. It was not sustainable and something had to give.

    In truth, the government was just living an illusion if it believed the true exchange was that artificial peg. It lay somewhere between N199 and the street rates that are driven by raw demand and supply factors and speculation. Which is another way of saying the reality had devalued the naira but the president and those who supported maintaining the official rate didn’t want to wake up and smell the coffee.

    I don’t believe Buhari should work himself into a state over the floatation or official devaluation of the naira. What should be of concern is whether the policy helps us to achieve our goals for the economy.

    So far, the portents are not so good because the crash of the naira to more realistic rates has not made the dollar more readily available. The scarcity has as much to do with fact that we are not earning as much from external sources, as it has to do with the fact that those who may have huge dollar holdings locally wouldn’t dare open up their ‘vaults’ for fear of the scrutiny they would attract.

    Still, what the CBN has done might be the best among a range of options. Allowing the markets to determine the rates takes out much of the abuse of the official rate that was done through round-tripping.

    We all need to be patient – and that includes the president. The naira being at a particular figure to the dollar or pound is not the issue. As Buhari pointed out our woes are hemmed to the mono-cultural nature of our economy. Until we deal with that structural problem all our mourning over the state of the national currency would be meaningless.

    The problem, perhaps, is that those who sold devaluation or floatation to Buhari probably did so making it look like a magical solution.

    But the naira isn’t going to recover just by some economic sleight of hand. It’s going to be a long waiting game. Earnings have to go up to shore up reserves, foreign investors have to be convinced again to bring in their cash and non-oil sectors of the economy have to begin to deliver on their potential before we can see real change.

  • N2.5b CBN cash for business savvy Corps members

    N2.5b CBN cash for business savvy Corps members

    From the existing N220 billion Micro Small and Medium Enterprises (MSME) fund, the Central Bank of Nigeria (CBN) yesterday said it would provide N2.5 billion facility to encourage members of the National Youth Service Corps (NYSC) with good business ideas.

    The apex bank said the recent NYSC members with good business ideas and entrepreneurial skills can now access N2.5 billion loans at single digit interest designed to keep them in business.

    Speaking at the kick-off of the training of the first batch of applicants under the Youth Entrepreneurship Development Programme (YEDP) in Abuja, the CBN Governor, Mr Godwin Emefiele, said: “Each Corps member is entitled to a maximum of N3 million, their degree certificates and their NYSC discharge certificates which should not be more than five years will serve as their collaterals.”

    He, however, cautioned the corps members to exhibit the highest level of probity and responsibility in paying back the loan as none of them would like to toy with his degree certificate or NYSC discharge certificate. He stressd that  repaying the loan will ensure that they can reapply for more financial support as well as make money available to future generation of corps members that will benefit from the revolving facility.

    The programme, he said, is intended to create one million jobs warning that the facility “is not a grant but a loan that must be repaid.”

    Emefiele said: “We do not anticipate that any of them fails. The reason is because Nigeria is not the only country where small and medium enterprises loans have been granted (loans). It has been successful in different countries.”

    He thanked the NYSC for helping to put together the first set of corps members both present and past  “so that we can nurture them as young entrepreneurs not as people who go into the world looking for jobs, but nurture them as people who are developing the entrepreneurial spirit and skills, not only for their good but also for the good of the country; if we lend money to 100 people, 97 people pay which is a very commendable feat and that is what we do expect here.

    “Somebody who has got a degree certificate or HND certificate to  attain a gainful employment or a gainful life will abandon his certificate or his NYSC discharge certificate just because he wants to take a loan and not pay. I want to enjoin everyone who has accessed this loan to please repay.”

  • CBN: flexible forex policy on trial

    CBN: flexible forex policy on trial

    The Flexible Exchange Rate Inter-bank Market policy is on trial, the Central Bank of Nigeria (CBN) said yesterday.

    It will make room for more stakeholders, including bureaux de change (BDC) operators, to participate, CBN Governor Godwin Emefiele said.

    He spoke at the interactive session between the BDCs and the CBN on the new policy and the state of the forex market.

    He assured the BDCs that they will be factored in while acknowledging their impact on businesses.

    The broad framework and guidelines of the Flexible Exchange Rate Inter-bank Market was released by the CBN on June 15 during which it restored the automatic adjustment mechanism of the exchange rate with the re-introduction of a flexible inter-bank exchange rate market.

    The CBN said the workings of this market will be consistent with its objectives of enhancing efficiency and facilitating a liquid and transparent Foreign Exchange Market.

    Emefiele, who was represented by CBN Director, Financial Policy and Regulation Department, Anthony Ikem, said: “The CBN wants to accommodate and carry all stakeholders along. All that management is requiring for the BDCs is to be more patient. The new policy is being tested. Efforts will be made to see how the BDCs, which are critical to economic development, will be carried along”.

    The CBN boss promised the operators that they will be part of the policy, adding that more collaboration between the regulator and operators is needed to move the economy forward.

    He said the CBN will review the BDC operational guidelines to ensure they are in line with regulatory requirement and prepare the operators for the task ahead.

    President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said to kick-start the new policy regime, the CBN had injected $4.2 billion to the market which helped to address unmet payment obligations promoting market volatility.

    He said the first concern over the policy is the complete exclusion of BDCs from the new forex regime, stoppage of dollar sales to BDCs, new guidelines that restricted the business of operators as well as various circulars designed to hurt BDC operations.

    He said the new forex regime is being challenged by inadequate liquidity in the market, preference of open accounts by foreign suppliers over the newly introduced naira settled OTC Futures among other factors.

    Gwadabe said if not properly implemented, the policy may lead to huge forex loses by manufacturers, further rise in inflation and decline in Gross Domestic Product (GDP) growth.

    He said the CBN and ABCON would work together to stabilize the forex market and exchange rates. He urged the CBN to be more sensitive to the BDC industry and considerate in its policy formulation to allow the industry play its role.

    “The present situation in the forex market is skewed against BDCs and the result is the huge gap between the interbank and parallel market forex rates, which provides opportunity for sharp practices,” he said.

    The ABCON boss called for a compulsory dollar inflows from their oversee accounts Forex Primary Dealership (FXPD) operators, where over $4 billion idle funds are warehoused, instead of relying on the available forex to meet market demands.

    The FXPDs qualified lenders are registered authorized dealers designated to deal with the CBN on large trade sizes on a two-way quote basis. They will serve as the bulk traders dealing directly with the CBN on forex matters.

     The CBN guideline for the FXPD stipulated that to qualify as an FXPD, a bank is required to have a minimum of N400 billion in total foreign currency assets; minimum shareholders fund unimpaired by losses of at least N200 billion and minimum Liquidity Ratio of 40 per cent.

    Gwadabe faulted the stringent conditions for qualification as an FXPD saying it will establish a new cartel in the banking industry and place only a few banks in advantage positions

  • CBN unveils naira forex futures market

    CBN unveils naira forex futures market

    The Central Bank of Nigeria (CBN) yesterday formally flagged off the Naira Settlement Foreign Exchange Market.

    A statement from the CBN said the CBN Governor, Mr. Godwin Emefiele, expressed delight that the foreign exchange market in Nigeria has attained the position where participants in Nigeria can settle foreign exchange futures transactions in Naira.

    According to Emefiele, who was represented by the Special Adviser, Financial Market, Mr. Emmanuel Ukeje, “this product is novel in Nigeria and it gives comfort regardless of the price at which you have quoted to buy foreign exchange in Nigeria. “In the same vein, the product is also expected to provide relief to Nigerians seeking Dollars to import critical machinery and raw materials from abroad as they can now lock-in their foreign exchange deals in earnest against their future demands,” the statement said.

    He reaffirmed the commitment of the apex Bank to ensure the success of the new foreign exchange market structure and also promised to honour all obligations arising from future deals.

    In his speech at the event, the Managing Director of the Financial Market Dealers Quote (FMDQ), Bola Onadeko urged the regulators of the financial markets to strive for the success of the of the new foreign exchange initiative by ensuring desired liquidity.

    Earlier in her welcome address, the Chariperson of the FMDQ, Dr Sarah Alade, represented by Mr Yinka Sani of Stanbic IBTC, noted that the launching of the hedging product has revolutionised the financial landscape in Nigeria as the market is now adequately positioned among the global standards and at the same time provide liquidity for the market.

    She gave an assurance that FMDQ would ensure transparency and innovations in order to attract investors to the Nigerian market.