The Nation Newspaper

Tag: cbn

  • Banks may raise $2.5b in bonds

    Banks may raise about $2.5 billion this year, compared with the $2 billion they raised in 2013, according to FBN Capital, the investment-banking unit of FBN Holdings Plc.

    Analysts said international debt sales are becoming common as yields on Nigerian Eurobonds due in July, 2023, declined 96 basis points this year. That compares with an average of 35 basis-point drop in emerging-market yields, according to Bloomberg indexes.

    The Central Bank of Nigeria (CBN) in August changed the way lenders calculate capital buffers. The regulator ordered banks it considered too big to fail to boost minimum capital ratios to 16 per cent last year, compared with 10.5 per cent for South African lenders, which control most of the continent’s banking assets.

    “Capital adequacy for many of the banks will be close to the minimum” once the changes are taken into account, Mike Nwanolue, an analyst at Lagos-based Greenwich Trust Group Ltd. told Bloomberg.

    The CBN removed some assets lenders can count as capital in preparation for the implementation of Basel II and III, while limiting Tier 2 capital to 33 percent of Tier 1 capital, according to an August 5 circular from the regulator.

    Minimum capital requirements for lenders with operations outside the country was kept at 15 percent and at 10 percent for those with interests only in Nigeria.

    The changes will shave 100 to 400 basis points off the capital adequacy ratios of most banks, Adesoji Solanke, an analyst at Renaissance Capital in Lagos, said.

  • Ex CBN chief urges banks, others on corporate governance

    Ex CBN chief urges banks, others on corporate governance

    Banks, insurance firms, stock-broking firms  and other operators in the nation’s financial services still need to improve on corporate governance mechanism to prevent untoward practices and compete favourably with their counterparts abroad, the former Deputy Governor, Central Bank of Nigeria (CBN), Mr Ernest Ebi has said.

    Speaking on the sidelines of the Fellows Evening 2014, organised by the Institute of Directors (IoD) in Lagos, Ebi said financial markets operators and regulators have since the 2008 global meltdown learned their lessons.

    He urged the CBN, Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM)  and other bodies to build on the corporate governance platforms they have laid to foster growth.

    He said: ‘’ When it comes to adherence to the best practices of corporate governance in Nigeria,  I can say banks, and other companies have tried because sharp practices and  other problems that came up in the wake of the 2008 upheaval has reduced.  But there is a room for improvement. We still have a lot of work to do in that area if we want to be reckoned with globally.’’

    According to him, IoD, the Chartered Institute of Bankers of Nigeria (CIBN), and other relevant institution have done well in the area of corporate governance by ensuring that executive directors, non-executive directors and members of board of quoted companies know their rights, roles, and limitations.

    Ebi said independent directors are pillars of corporate governance because they express views that are in the best interest of the companies.

    ‘’Independent Directors are Non-Executive Directors. They do not have pecuniary interest in companies. Theirs is to express views on issues such as shareholding, improvement on shareholders’ welfare and others.  That is why I challenge the IoD in my paper to roll up their sleeves and do something on the issue, by  educating the public on the roles of independent directors, establishing a committee or sub-committee on independent directorship to encourage growth of companies,’’ he added.

  • Easy money

    •Our banks have too many charges that do not allow them to work hard for profit

    Perhaps without meaning to, the Central Bank of Nigeria (CBN) may have offered an important perspective to the paradox of banks raking bumper profits at a time when minimal lending activities are going on. We refer here to the CBN’s Revised Guide to Bank Charges issued to banks and discount houses on March 27, last year.

    Although the guide seeks primarily to provide “a standard for the application of charges on various types of products and services Deposit Money Banks in Nigeria offer to their customers” and to minimise the potentials of conflict between the banks and their customers, most striking in the revised guide is the sheer number of charges available to the banks (one count puts the charges at more than 100) to make profit, even without as much as breaking a sweat. Aside the more familiar charges like Commission on Turnover (COT), cheque books and counter cheques, bank transfers, ATM usage, and of course the industry-wide charge called current and savings accounts maintenance charge–  the latter ostensibly for merely holding money in a savings account, there are other countless imaginable charges under the sun.

    Despite its immense merits, the revised guide obviously suffers from its tacit endorsement of the extant culture of arm-chair banking which has left the Nigerian financial services sector with little or no incentive for innovation.  And, if we may also add; the omnibus guide has done nothing more than legitimise the practices under which the bankers would sit in the comfort of their offices to make a fortune rather than get their hands dirty with the business of lending to customers.

    As business entities, this newspaper understands the need for the banks to make profit. No doubt, a good number of bank charges could pass for value-added services and hence legitimate; the truth of course is that nearly an equal number of the charges are not only spurious but are actually freebies designed to pad up the banks’ bottom-lines. Our grouse is when banks settle in the safe comfort zone of paper profits with nary benefits to the larger economy. It stems from our basic understanding that banks are primarily in the business of mobilisation and transfer of savings and other resources from depositors to borrowers and sundry investors. Flowing from this is their expectation of revenue or profit from the interest rate spread, that is, the difference between the deposit interest rate paid to the depositors and the lending interest rate charged borrowers.

    We consider other activities as either ancillary or at best, tangential. Unfortunately, what we have in the country today is a situation where the banks are content to settle on fringe activities that have little to do with their core business. Our worry, if it could be so put – derives essentially from the continuing derogation from that important tradition of financial intermediation.

    The CBN has a lot to do to get the banks on that traditional path. Today, many of our banks are known to sit atop huge deposits – which if only they could find the will – can be deployed to grow the real sector. The obverse side is that many businesses are known to be in dire need of venture capital – many of them shut out of credit for reasons that are inexplicable.

    Perhaps a good way to start is for the CBN to consider removing some of the charges which are no more than avenues for making easy money. But even more importantly, the Bankers Committee must commit to finding a pathway that works for the overall benefits of the economy. It is as much in the interest of the economy as theirs too.

  • Author to promote effective and sustainable cash-less society in Nigeria

    Author to promote effective and sustainable cash-less society in Nigeria

    With the aim to help Nigeria to fully become a cash-less economy which the Central Bank of Nigeria (CBN) introduced to Nigeria on January 1st 2012 and implemented in phases, a banker, Mr. Sunday Olowoyobiojo, has launched a book; titled ‘Cashless Nigeria: Benefits, Opportunities, and Challenges’.

    He said the book which was launched recently in Lagos is targeted at promoting and supporting the cash-less economy in Nigeria and thereby reduce insecurity.

    He said cashless economy would help to mobilise funds from the informal sector and reduce corruption among others, because people will no longer carry so much cash around in the cause of payment for goods and services.

    “The cashless system will also reduce cost of processing cash in banks, ensure safe and secure banking system and thereby guarantee security for the citizenry because it will prevent fraud or robbery attack.” he said.

    He said the book was written to address the issue of the cashless economy in Nigeria, to sensitize and enlighten Nigerians about the benefits, opportunities and challenges of cash-less society and in general to contribute to nation building.

    He said the book is timely and strategic to the emerging cash-less society in Nigeria because it was designed to promote grassroots sensitization and mobilize sustainable cash-less and financial inclusive society in Nigeria.

    “The book cut across all ages and class. It covers areas including; the genesis of money and banking, alternative banking channels, tips for strategic approach to cashless transactions, benefits/ opportunities of cashless policy and challenges of a cash less Nigeria.

    “Other topics the book has addressed are; Why cashless Nigeria, the cashless era, e-branch and ATM gallery, agent banking and galvanising action for a cash less society” he said.

    He urged Nigerians to buy and read the book in order to educate themselves, family and friends in order to have the cash-less society of our dream. He also appealed to individuals, corporate bodies and government to sponsor the mass production of the book so that it can be distributed free to students, bank customers and the general public.

  • Enterprise: Will Heritage beat October 13 deadline?

    Enterprise: Will Heritage beat October 13 deadline?

    The sale of Enterprise Bank Limited entered the final stage when the Asset Management Corporation of Nigeria (AMCON) announced Heritage Bank Limited and Fidelity Bank Plc as preferred and reserved bidders respectively. Although Heritage Bank has paid the initial 20 per cent part payment and still has up till October 13 to make the final payment or Fidelity Bank steps in. COLLINS NWEZE reports on the unfolding opportunities and intrigues that greet the sale.

    The race for Enterprise Bank sale has been on for over a year. On Thursday, September 11, the Asset Management Corporation of Nigeria (AMCON) announced HBCL Investment Services Limited (HISL), sponsored by Heritage Banking Company Limited, as the preferred bidder for Enterprise Bank.

    The firm has up till October 13 to balance about N44.8 billion, representing 80 per cent of the N56 billion bid price.

    While the clock ticks for Heritage to pay up, Fidelity Bank Plc, the reserved bidder is patiently waiting to step in, should the payment arrangement fail.

    But Heritage Bank CEO, Ifie Sekibo assured stakeholders that the lender will beat the deadline. He is already planning the post-Enterprise Bank era, outlining strategies that would transform the new entity to a mega bank.

    He confirmed that the lender has already paid the 20 per cent or N11.2 billion of the N56 billion bid prices before the Share Purchase Agreement (SPA) was signed in Abuja about fortnight ago.

    The Heritage Bank boss confirmed that the bank had already paid the initial 20 per cent of the total bid price for Enterprise Bank pointing out that efforts were already in place to ensure the payment of the final 80 per cent within the time frame stipulated by AMCON.

    He said the lender is already working on the process it believes, will finally culminate in the acquisition of Enterprise Bank Limited to further drive its time-proven potentials of creating, preserving and transferring wealth among its teeming customers.

    “In line with AMCON’s requirements for the acquisition of Enterprise Bank Limited, HBCL Investment Services Limited (HISL) which is the special purpose vehicle sponsored by Heritage Bank Limited to bid for Enterprise Bank on Friday last week signed the Share Purchase Agreement (SPA).

    I am also aware that HISL has paid the initial 20 per cent as specified in the terms of the agreement. Efforts are ongoing to ensure that the balance 80 per cent is also paid in line with the terms, conditions and time frame specified by AMCON. This major step towards the acquisition of Enterprise Bank by HISL and by extension, Heritage Bank, fills us with great excitement. With this take over process going on smoothly, we are sure a more energized bank with improved capacity to create, preserve and transfer wealth will soon emerge,” he assured.

    Managing Director, CRC Credit Bureau, Tunde Popoola said the acquisition, when completed, would improve competition in the banking sector.

    He explained that in acquisition of this nature, there are different things that are involved including the winner’s ability to pay. He expressed optimism that Heritage will be able to muster the required fund and pay before the deadline expires.

    “Don’t forget that they bided on their own. They provided the value of the bid. Where you are bidding and you are providing amount you want to pay, it then means you have a way of sourcing for that fund. Otherwise, it does not make sense to bid for an amount you will not be able to pay,” he said.

    Popoola said the process has been transparent and winners know the timeline they will be given to pay. He however said the bank must pay without depleting its capital adequacy. “And as a banking institution, they must have the required money without impairing their capital adequacy. If they do not have the means to pay, and the time expires, there is already a reserved bidder,” he said.

    He said should Heritage fail to pay, the right to acquire Enterprise Bank will then go automatically to Fidelity Bank. “If they fail to pay, that goes back to the second bidder who will then pay its bid price. Whichever way it goes, I believe Enterprise Bank will be better for it and the economy will also be better for it because you will see a bank that will run fully with all the potentials,” he said.

     

    AMCON factor

    The AMCON and Heritage Bank Limited SPA will enable the latter acquire the entire issued and fully paid up ordinary shares of Enterprise Bank Limited.

    AMCON had in a statement endorsed by its Head, Corporate Communication, Kayode Lambo announced HBCL Investment Services Limited (HISL), sponsored by Heritage Banking Company Limited (Heritage Bank), as preferred bidder while Fidelity Bank Plc was named reserve bidder for the acquisition of the bridged lender.

    The AMCON spokesman said the bid process started with interest shown by 24 parties cutting across local and international boundaries. The emergence of HISL and Fidelity Bank as preferred and reserve bidders respectively, he said, resulted from a rigorous and competitive bidding process, which was coordinated for AMCON by Citigroup Global Markets Limited, Vetiva Capital Management Limited (Financial Advisers) and G. Elias & Co. (Legal Advisers).

     

    The controversy

    The AMCON has consistently defended the transparency of the deal. In July, it refuted newspaper report alleging that it interfered with the bid process to favour a particular local bank.

    In a statement, Lambo said the bid process leading to the sale of Enterprise Bank has not even reached the stage where any result would be sent to the Central Bank of Nigeria (CBN).

    It said this suspicion was aggravated when AMCON suddenly changed one of the rules for the sale of the Bank shortly after the final bids were submitted. This, according to the report, prompted the CBN Governor to order AMCON to conduct fresh final bids, based on some specific criteria that would be used to adjudge the bids submitted by the five contesting institutions.

    The apex bank is alleged to have seen the result of the final bid submitted by AMCON as inconclusive, with attempt to focus on criteria that would influence the outcome in favour of the particular bank.

    But in a reaction, AMCON said it wanted the public to know that after the advisers (Messrs Citibank and Vetiva) who it employed have concluded their work, AMCON’s management and board will consider the result before the approved buyers are officially sent to the CBN.

    “It is therefore premature for the report to say that AMCON interfered with the process, as the process is still on-going and no names have yet been officially sent to the AMCON board for consideration,” the statement said.

    “AMCON has not interfered in any way in the process that is still entirely in the hands of the advisers. When the advisers present their final report, which we expect within the next two weeks, regulatory approval will be required and sought,” the statement said.

     

    Rules of engagement

    AMCON commenced the sale of Enterprise Bank on September 22nd, last year when it formally invited interested buyers to express interests in acquiring its 100 per cent stake in the bank.

    The audited financial statement of the Enterprise Bank Group as at 31 December 2012, show that the Group’s Total Assets stood at N263.5 billion, Customer Deposits at N208.4 billion and Total Equity at N31.9 billion

    The invitation by AMOCN prompted interests from some Nigerian banks namely Diamond Bank Plc, Fidelity Bank Plc, Sterling Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank, Skye Bank, Heritage Bank Limited and other investment groups.

    Others include investors like Taunus Holdings, Sahara Energy, Obat Oil and about 12 private equity firms backed by experienced bankers as well as financial and investment analysts.

    AMCON said interested buyers should indicate their interest by submitting an Expression of Interest (EoI) with information such as the “description of acquiring entity or vehicle with evidence of registration or incorporation; ownership of the acquiring entity or vehicle; identifying all shareholders with a five per cent or more stake; strategic rationale for the acquisition of Enterprise Bank; relevant financial services industry experience and/or demonstrable evidence of ability to manage a bank of this nature.”

    Also, interested buyers were requested to submit evidence of financing capacity, while a consortium should “provide evidence of alliance/partnership/joint venture between members in the consortium, clearly indicating the lead member authorised to submit the EoIs.”

    The corporation had added: “Upon receipt and evaluation of the EoI, a shortlist of buyers, who in AMCON’s view are deemed to be fit and suitable from a regulatory perspective (amongst other things), will be prepared and will proceed to the first phase of the transaction.

    Analysts advised that the potential investor in the bank should have a disciplined board and management that adhere to sound corporate governance principles.

    Former Head of Research and Corporate Development, Consolidated Discounts Limited (CDL), Mr. Jimi Ogbobine, argued that tier two banks will benefit more by buying Enterprise Bank. He said the bank’s branch network remains a major strength that ambitious lenders can tap into.

    He explained that the legacy bad loans of Enterprise Bank have been bought by AMCON, adding that overall, the offer looks attractive.

    The Managing Director/Chief Executive Officer of Enterprise Bank Limited, Ahmed Kuru, said he was happy leaving behind, a better Enterprise Bank and a happier workforce. He added that he was convinced that customers will have the best deal at the conclusion of the process. “I am convinced our customers expect the best deal at the end of the day. So their expectation should be high,” he said.

    He explained that right from the beginning when he was appointed, it was very clear to him that AMCON, at certain point in time will divest from the bank.

     

    Bridged banks

    Enterprise Bank is wholly owned by AMCON. Other bridged banks owned by AMCON are Keystone and Mainstreet banks. The corporation had acquired the lenders in August 2011, after the intervention by the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN). Enterprise Bank was created from the ashes of the defunct Spring Bank, while Keystone Bank and Mainstreet Bank were created from the defunct Bank PHB and Afribank respectively.

    As part of efforts to divest its shareholdings in the three banks by 2014, starting with Enterprise Bank, AMCON had appointed Citigroup Global Markets Limited (Citi) and Vetiva Capital Management Limited as Financial Advisers, as well as G. Elias & Company as Legal Adviser to the transaction.

    Enterprise Bank commenced operation in August, 2011, as a full-service commercial bank with a national banking license. The bank operates via a sizeable distribution network of over 160 branches spread across major markets and commercial centres in Nigeria, and with over 177 automated teller machines (ATMs), 57 Cash Centres and 2,000 point of sales (PoS) terminals.

     

  • Regulator bars DMBs from int’l money transfer service

    Regulator bars DMBs from int’l money transfer service

    The Central Bank of Nigeria (CBN) has barred commercial banks from International Money Transfer Service operations.

    This policy was contained in a CBN circular to all Deposit Money Banks and stakeholders signed by its Director, Trade and Exchange, Mr. I. O. Gbadamosi.

    The circular however said banks can only act as money transfer agents with the express approval of the CBN.

    The policy also pegged the maximum limit of outbound international money transfer at $2,000 per transaction.

    The circular which contains guidelines for the operations of inbound and outbound international money transfer services in the country, also itemised licensing requirements and standard practices, which international money transfer services operators are expected to comply with.

    It also prohibits DMBs from operating as international money transfer service operators, except with the express approval of the CBN.

    “All international Money Transfer Service Operators in Nigeria shall comply with the provisions of the CBN’s ‘Anti-money Laundering and Combating the Financing of Terrorism in Banks and Other Financial Institutions Regulations, 2013’ and all other applicable laws and regulations. A money transfer services operator shall disclose to its customer’s details of applicable exchange rates, commissions, fees and any other amount that may be charged by the banks/ agents involved in a transfer,” it said.

    It said operators should have a non-refundable fee of N500,000 and a minimum share capital of $1 million. “An indigenous money transfer service operator who provides regional and or global money transfer service and who wishes to engage a foreign technical partner shall get CBN’s approval. It must also have a minimum net worth of $10 million,” it said.

  • Analysts doubt CBN’s expectations on foreign reserves

    Analysts at FBN Capital have said the Central Bank of Nigeria’s (CBN) expectations of foreign exchange reserves increase to about $45 billion by year-end may prove overly ambitious.

    The investment and research firm, said the apex bank uses administrative measures to support its exchange-rate agenda. It said the mandatory recapitalisation of bureaux de change to stem leakages is one of such measures.

    According to the firm, the fall in the international price of Nigeria’s benchmark Bonny Light crude to about $95/barrel, has fuelled fears that the CBN will be unable to hold the line on the naira exchange rate.

    “There remains a cushion of close to $20/barrel above the assumed export price in the 2014 budget, although in reality pressures in the market develop far more quickly, which we can detect from the reluctance of offshore portfolio investors to participate in the most recent auctions of Federal Government of Nigeria bonds and Nigeria Treasury Bills,” it said.

    According to the firm, official statements give the impression that some of the oil production losses have been recovered, a claim, it said, it was unable to confirm in the absence of a unified source of metering.

    “As for the price, we do not think that global demand warrants significant further weakness. We also point to the many geo-political risks and OPEC’s interest in arresting the decline. The level of official reserves has settled on a plateau of $39.6 billion this month, but still provides nine months’ merchandise import cover,” it said.

    Another measure to boost the naira, it said, is dollarisation of the banking system. “The CBN data through to March 2014 showed a limited build-up to 25.7 per cent of commercial banks’ total deposits,” it said.

     

  • CBN outlines roles of HoldCo banks, subsidiaries

    CBN outlines roles of HoldCo banks, subsidiaries

    The Central Bank of Nigeria (CBN) has released guidelines for banks operating Holding Company (HoldCo) structure and how such lenders will relate with their subsidiaries.

    The guidelines, signed by CBN Director, Financial Policy and Regulations, Kelvin Amugo, said for any financial holding company structure to emerge, there shall be at least, two subsidiaries and the focus of the conglomerate shall be in the financial services sector.

    He said the guidelines, issued in exercise of the powers conferred on the CBN under the CBN Act, 2007 (CBN Act) and the Banks and Other Financial Institutions Act, Cap B3, Laws of the Federation of Nigeria, 2004 (BOFIA), complement CBN Regulation on the Scope of Banking Activities and Ancillary Matters, No 3, 2010.

    According to the guidelines, the CBN said a financial holding company is permitted to have only two hierarchies (parent and intermediate financial holding companies). Given the permissible level of hierarchies, a financial holding company may have a subsidiary which is a parent to another subsidiary (intermediate financial holding company).

    According to the rules, where such subsidiary is locally based, the relevant regulator shall have responsibility for its supervision. Where the subsidiary is overseas, the relevant regulator shall seek a Memorandum of Understanding (MoU) with the host regulator for its joint supervision.

    It said a financial holding company may acquire controlling interest in any permissible financial institution, subject to prior approval of the CBN. Where the target company is outside the supervisory purview of CBN, the prior approval of the relevant regulator will also be required.

    Still, where a subsidiary of the financial holding company outside the purview of the CBN is acquiring another subsidiary similarly outside the purview of the CBN, the Holdco shall notify the CBN before the acquisition is consummated. Evidence of prior approval of the relevant sector regulator shall accompany the notification.

  • Chinese manufacturers reject Letters of Credit from Nigeria, says CBN

    Chinese manufacturers reject Letters of Credit from Nigeria, says CBN

    The Central Bank of Nigeria (CBN) yesterday said Chinese manufacturers have started rejecting Letters of Credit (LCs) from Nigerian importers, insisting on cash payment only.

    Its Director, Trade and Exchange, Olakanmi Gbadamosi lamented that in spite of improved banking regulation in the country and the apex bank’s cash-less  policy, the Chinese exporters still reject LCs from the country.

    Gbadamosi spoke at the 2014 Wema Bank Customer Trade & Structured Finance Forum in Lagos.

    An LC is a document issued by a financial institution or a similar party, assuring payment to a seller of goods or services provided certain documents have been presented to the bank. LC serves as a guarantee to the seller that the money will be paid regardless of whether the buyer ultimately fails to pay.

    It ensures that the risk that the buyer will fail to pay is transferred from the seller to LC’s issuer. The letter can also be used to ensure that all agreed standards are met by the supplier, provided that these requirements are reflected in the documents described in the letter of credit.

    Gbadamosi, who was represented by CBN’s Deputy Director, Trade and Exchange, Mrs. Onyinye Ahuchiogu said the practice is affecting Chinese trade volume with the country and is being addressed.

    “At CBN, we are aware of that because I want to tell you authoritatively that at that end, some people monitor foreign exchange flows. We do know that so much money goes to China, cash, not LCs. The demand for cash is against the CBN cash-less banking policy.

    “I do know that the cash-less policy is gaining ground; everybody is going cash-less, but China has refused. I think it is a bilateral issue and we have suggested that it should be tackled because this people are doing business in our environment and they are making profit. They are enjoying our environment. Despite security challenges in Nigeria, businesses are still thriving.”

    He however said the CBN is looking at ways of resolving the challenge.

    Continuing, he said the CBN is committed to ensuring that banks fund their accounts, two days before the bid date for foreign exchange adding that importers can source for funds either through the official window or interbank.

    “As a business man, you can source fund from any segment, depending on the transaction you want to execute. But in Nigeria, we have a list of eligible bank transactions, which we expect that importers chose only from this list. It is also our expectations that banks educate their customers about these transactions, and the supporting documents needed for effective import,” he said.

  • Chinese manufacturers reject Nigeria’s Letters of Credit, says CBN

    Chinese manufacturers are refusing Letters of Credit (LCs) from Nigerian importers, insisting on cash payment only, the Central Bank of Nigeria (CBN) Director, Trade and Exchange, Olakanmi Gbadamosi has disclosed.
    Speaking on Wednesday at the 2014 Wema Bank Customer Trade & Structured Finance Forum held in Lagos, Gbadamosi regretted that despite improved banking regulation in Nigeria and the CBN Cash-less banking policy, the Chinese exporters still reject LCs from Nigeria.
    A LC is document issued by a financial institution, or a similar party, assuring payment to a seller of goods or services provided certain documents have been presented to the bank. The LC serves as a guarantee to the seller that it will be paid regardless of whether the buyer ultimately fails to pay.
    It ensures that the risk that the buyer will fail to pay is transferred from the seller to the letter’s issuer. The letter can also be used to ensure that all agreed standards are met by the supplier, provided that these requirements are reflected in the documents described in the letter of credit.
    Gbadamosi, who was represented by CBN Deputy Director, Trade and Exchange, Mrs. Onyinye Ahuchiogu said the practice is affecting Chinese trade volume with the country and should to be addressed.
    “At CBN, we are very much aware of that because I want to tell you authoritatively that at that end, some people monitor foreign exchange flows. We do know that so much money goes to China, cash, not LCs. The demand for cash is against the CBN cash-less banking policy,” he said.
    Continuing, he said: “I do know that that the cash-less policy is gaining ground; everybody is going cash-less, but China has refused. I think it is a bilateral issue and we have suggested that it should be tackled because this people are doing business in our environment and they are making profit. They are enjoying our environment. Despite security challenges in Nigeria, businesses are still thriving”. He said the CBN is looking at ways of resolving the challenge.
    He said the CBN is committed to ensuring that banks fund their accounts, two days before the bid date for foreign exchange adding that importers can source for funds either through the official window or interbank.
    “As a business man, you can source fund from any segment, depending on the transaction you want to execute. But in Nigeria, we have a list of eligible bank transactions, which we expect that importers chose only from this list. It is also our expectations that banks educate their customers about these transactions, and the supporting documents needed for effective import,” he said.
    He said Form ‘M’ completion is expected from anyone doing business in Nigeria as it helps the CBN to know who is buying what, and what needed to be done to meet customers’ needs. He said that importers of goods worth less than $250,000 annually are to carry out minimal documentation but they still have to do the Form ‘M’.