The Nation Newspaper

Tag: cbn

  • CBN probes Consolidated Discount books

    CBN probes Consolidated Discount books

    The Central Bank of Nigeria (CBN) is checking the books and accounts of Consolidated Discount Limited (CDL) over liquidity challenges being experienced by the company.

    In a letter to CDL Interim Administrator obtained by The Nation, CBN Director of Banking Supervision, Tokunbo Martins, informed lenders and unsecured depositors of the discount house of the probe. She said the CBN will pay the principal sums constituting the deposit liabilities of CDL to them after the verification.

    “This is to intimate all lenders and unsecured depositors of Consolidated Discount Limited (CDL) of on-going investigation into the books and accounts of the discount house by the CBN. We assure such lenders/unsecured depositors that the CBN shall, without prejudice, pay the principal sums constituting the deposit liabilities of CDL to such lenders / unsecured depositors after the verification expected to be concluded soon,” she said.

    Tokunbo advised the lenders not to panic as no funds deposited with the discount house would be lost, adding that the investigation will be accorded ‘speedy conclusion’.

    Confirming the development, Head of Research and Corporate Development, Consolidated Discounts Limited (CDL), Jimi Ogbobine, told The Nation on phone that the duration of investigation is not yet known but confirmed that the CBN team is examining the books and accounts of the discount house.

    He said CDL Managing Director, Adeleke Shittu has stepped aside to allow the regulators do their work, adding that an acting managing director has been appointed.

    CBN had, in July this year, withdrawn the licence of Express Discount Limited for serial abuses and failure to meet the required minimum capital base. Tokunbo had said the revocation, which took effect from July 19, was in compliance with the provisions of Section 2(d) of the CBN Act 2007 and its mandate under the Banks and other Financial Institutions Act (BOFIA) 2004.

    Information from CDL’s website said it was incorporated on November 16, 1995 as a limited liability company, and was licensed by the CBN on August 14, 1996 to carry out the functions of a discount house. CDL claims it ‘parades an array of seasoned and tested professionals to cater for the financial intermediary needs of its clients and target market.’

    CDL also said it is wholly owned by a consortium of five local banks and a leading pension fund management institution.

    It said its objectives are to provide safe and secured shelter for surplus short-term funds in the financial system.

    The firm said its mandate is to cater for the liquidity needs of the financial community through acceptance of placements, duly secured, and with qualify as liquid assets for statutory reporting purposes in the case of banks.

    The company also said it enhances clients’ profitability by facilitating their ability to invest idle overnight balances without compromising on liquidity.

     

  • Banks’ lending to agric may increase to 7%, says CBN

    Banks’ lending to agric may increase to 7%, says CBN

    Banks’ lending to agriculture sector is expected to rise from the 3.5 per cent to seven per cent in the next decade, Central Bank of Nigeria (CBN) Deputy Governor, Financial System Stability, Dr Kingsley Moghalu, has said.

    He made this known at the weekend on the sidelines of the end of the Euromoney conference in Lagos.

    Moghalu said the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) initiative has boosted agricultural lending.

    He said the level of attention the subsector is getting is a reflection of a new thinking that it holds key to the economic growth and development.

    Data from the CBN indicate that NIRSAL introduced in July last year, is determined to grow loans to the sector to four per cent of banks’ total loans, from the average of 1.5 per cent in 2009.

    The NIRSAL guarantees up to 75 per cent of bank loans to the sector.

    The initiative, which is the brainchild of the CBN, the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development (FMARD), seeks to create incentives and catalyse processes that will encourage the growth of formal credit, direct and indirect, for the agriculture value chain. This, the CBN said is key in driving wealth creation among value chain participants.

  • CBN expects ‘below-target’ inflation in 2014

    CBN expects ‘below-target’ inflation in 2014

    The Central Bank of Nigeria expects inflation to remain below its single-digit target throughout 2014, as it has this year, Deputy Governor Kingsley Moghalu told Reuters on Thursday.

    He also said growth next year was projected at 7.6 percent, which compares with a rate this year of around 6.5 percent.

    He added that better prudence meant the government would be able to keep Nigeria’s fiscal deficit below three percent in 2014, as it has this year.

     

  • Lagos-Ibadan is a failed road; Dead Police; Air Force Museum; UNESCO Education; CBN

    Lagos-Ibadan is a failed road; Dead Police; Air Force Museum; UNESCO Education; CBN

    After five and half hours trying to get from Ibadan to Lagos on Saturday September 14, I can declare on behalf of travelling Nigerians that the LAGOS IBADAN ROAD IS A FAILED ROAD and deserves EMERGENCY ONE WEEK REHABILITATION. Even though most Presidency bigwigs and National Assembly (NASS) members use helicopters and planes, the millions of fellow citizens who use the Lagos-Ibadan road daily demand emergency repairs to their cars and the road. A powerful, good government can cause Julius Berger and RCC to employ thousands of unemployed Nigerians to fill the potholes on the road in one or two weeks if they have any love for Nigerians and sense of national pride and urgency. October 1, Nigeria@53 is around the corner. Government should make this an EMERGENCY GIFT to Nigeria. The Lagos-Ibadan former expressway is to be fully refurbished in 24-30 months with an Infrastructure Bank loan of N167b for the 127km road. Still too long, too slow.

    Intelligent advisers should advise the President that accolades come from opening the completed road. The President should further reduce this contract to six or 12 months to be completed in his present term to attract political kudos and paparazzi. After all, who knows tomorrow or 2015? Even politicians do not live forever and must act positively when they hold power. Already Governor Segun Agagu has sadly gone, may he Rest In Peace; who next? The President should care about the millions of citizens and 100,000 vehicles suffering on the former expressway daily?

    The celebrated release of human rights lawyer, Mike Ozekhome and the explanations of the motivation of the captors do not justify the execution of FOUR living souls from worth but not rich families, the police men! The released lawyer should attend the funerals of each dead policeman. He should then fight for better pay and conditions for police and better compensation for victims’ families. We, SAN lawyer and policemen are all equal in the sight of God.

    Life is serious. Twenty-three killed in bridge disaster. Who will investigate the contractor and the ministry to exonerate them of corruption and incompetence in design and planning for flooding –it is, after all, a bridge? Which body will pay compensation to the victims? Folajomo Agunbiade, a student of Adekunle Ajasin University was shot in the head, for praying to God in tongues during an armed robbery that was not being resisted in her family home in Ibadan.  Her mother is abroad trying to cater for her children. God knows that Folajomo is in heaven now but will that explanation comfort the family? A five-year old Nigerian had a limb amputated abroad because of bone cancer. I saw two children with sightless eyes from beatings in school and home.  Another 10 killed this week in the ongoing Plateau Tiv and Berom farm-Fulani herder war, and we all still eat cow meat. Meanwhile politics seems more important. Shame!

    The proposed Air Force museum is better late than never, good. Ditto for museums for all other areas e.g. transport, and academic subjects. What happened to the Army museum? We know about the Yar’Adua Museum.  Where is the Aviation Museum which we begged for as the aviation authorities destroyed old planes for teaspoons and petty cash instead of giving them to the top technology universities and polytechnics and to science and aeronautical support for education, people’s museums and exhibitions? The Air Force should involve ministries of education, technology and the sciences.

    So we need UNESCO and Gordon Brown to repeat what ASUU and all Education NGOs and unions and student bodies have been saying for 40 years, before government will listen at all levels? Gordon Brown offers more money to empower wayward corrupt governments; the same governments happily divert to corruption or other projects considered more important than children’s welfare and education. Again foreign money, like DFID’s, will help bail out corrupt Nigerian leadership. The less aid we get, the more Nigerian money will be spent correctly. Aid should be in the form of software, short stay, 1-3month scholarships and equipment.

    Another 23 killed at a collapsed bridge in Katsina. No different from the thousands killed in the North this year by cow-farm violence, ‘no western book’ violence, kidnap and vehicle violence etc. Sorry, as you grieve, but look at the picture of the bridge disaster. Increasingly in the North, when we see pictures of collapsed roads, railways and bridges we see red laterite earth sometimes 20 feet deep but we see no stones, boulders, cement or iron rods supporting the laterite road. So once again the contractor, the supervising engineers, the ministries of works and finance must answer questions of culpability in these and other deaths. Rains sweep away weak, un-reinforced infrastructure. Who under-planned, under-budgeted, under-built the bridge and under-built the coupling to the immediate access structures which were dislocated from the bridge? Who has the names on the signatures on the documents? The COREN and the Nigerian Society of Civil Engineers and NGO civil rights groups need to do evaluation and soil checks just as forensic investigation is done with an air crash. Was the bridge poorly constructed for the expected rainfall?

    CBN boasts that Nigeria has the second highest African reserves. This is being economical with the truth or using creative financial accounting procedures. Did he tell you the population to funds ratio in the other countries ahead of Nigeria? Nigerians are being slapped and punched repeatedly.

  • CBN stops ‘Lender of Last Resort’ role in Real-Time payment

    CBN stops ‘Lender of Last Resort’ role in Real-Time payment

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    The Central Bank of Nigeria (CBN) said it would remove “its implicit role of ‘Lender of Last Resort’ for the Real-Time Gross Settlement (RTGS) payment system by December 2016.

    What this means is that while the CBN will continue with its explicit role lender of last resort to Deposit Money Banks (DMBs), Primary Mortgage Institutions (PMIs) and Microfinance Banks (MFBs), it will not lend for transactions from December 2016.

    The bank said it will also stop the Deferred Net Settlement systems by December 2019. An outline deployment plan Sanusi said will be published by the CBN, indicating interim steps to achieving this longer term objective.

    An outline deployment plan would be published by the CBN, indicating interim steps to achieving this longer term objective, the CBN Governor, Sanusi Lamido Sanusi, has said

    Sanusi, who spoke yesterday at the international conference on payment system in Abuja, directed that henceforth, no national payments system shall invoke the principle of unwind, meaning that after an electronic transaction has reached a certain stage, it can no longer be reversed.

    “CBN will formally inform the industry that unwinds must not be invoked in any national payment system,” he said, adding that “each payment scheme must define and formally document the exact point at which payments are deemed to be ‘final and irrevocable.”

    Other key recommendations in the revised document, which Sanusi, said, resulted from identified deficiencies due to the significant progress already achieved with payment system in Nigeria, will include: “Strengthening the Scheme Governance structure to reflect the significantly greater responsibility of scheme management, covering all aspects of risk, business  management and operational resilience.”

    Also it must be ensured that each Scheme Management Board must carry out an annual self-assessment against the CPSS/IOSCO PFMI. An independent review should be undertaken every four years, with the target to make the results publically available by end, 2017; Open formal engagement channels with CLS as a first step towards Naira becoming a CLS Settlement currency; Mandate the use of the SWIFT Sanctions Checking (or its equivalent) for international payment instructions originating from all banks in Nigeria; and Work jointly with the Securities and Exchange Commission (SEC) and other key stakeholders to sponsor a formal review of the Securities Markets in Nigeria. The review should be completed under the FSS2020.

    Sanusi noted that the apex bank commenced the operations of Real-Time Gross Settlement (RTGS) System on December 18, 2006, “to increase the efficiency of time-critical payments with all the Deposit Money Banks and Discount Houses as direct participants.”

    The prevailing market needs, best practice and technology, he said rendered the existing RTGS System inadequate as it did not meet current user requirements.

  • ARMTI boss urges NASS, CBN on agriculture development

    ARMTI boss urges NASS, CBN on agriculture development

    Enactment of legislation conducive for agricultural players and provision of adequate funds to parastatals and agencies of government will enhance agricultural development in Nigeria, Acting Executive Director, Agricultural and Rural Management Training Institute (ARMTI), Samuel Afolayan has said.

    Mr. Afolayan spoke this yesterday in Fufu, headquarters of Ilorin South local government council of Kwara state at the flag-off of ARMTI’s Village Alive Development Initiative (VADI).

    ARMTI’s chief executive said that the institute was giving out one million Naira seed money to the farmers which would subsequently be paid back as loan.

    He said that “the two major ways NASS can assist agricultural development in Nigeria include putting in place necessary acts that will make the environment conductive for players (farmers, investors and other stakeholder) and provision of appropriate fund to governmental organizations for optimal performance.”

    Afolayan said that “we have about 16 groups and each of the group is about 12. We want to give out N1m seed money which will be used by the United Bank for Africa (UBA) as a guarantee and they will now apply for loans based on their needs.”

    Said he: “The Central Bank of Nigeria (CBN) can assist to by making more money available to the stakeholders and introduce more attractive products that will encourage people to go into farming.

    “Under the CBN programme there are many products which the people can benefit from, that is why we have chosen the agricultural credit guarantee scheme and we also going for the one they call interest drawback.”

  • Banks not reporting insider loans, says CBN

    Banks not reporting insider loans, says CBN

    The Central Bank of Nigeria (CBN) yesterday said banks are not reporting credit facilities of N1 million and above availed to their Board members and staff in line with the Credit Risk Management System (CRMS).

    CBN Director, Banking Supervision, Mrs Tokunbo Martins, explained in a circular to banks, that the apex bank has observed with dismay the practice, which violates the CRMS reporting mandate.

    She explained that the CRMS is a Central Database for credit information on borrowers, established by the CBN Act No. 24 of 1991 (Sections 28 and 52) as amended, which made it mandatory for all banks to render returns in respect of all credit facilities of N1 million and above.

    She said Sections 3.4 and 3.5 of the Prudential Guideline for Deposit Money Banks in Nigeria, July 2010, does not preclude banks from reporting credit facilities availed to its Board members and staff in the CRMS.

    Mrs. Martins advised banks to report such loans, adding that the credit facilities availed to their board members and staff are not exempted, warning that banks are required to report all credit facilities (principal plus interest) of N1 million and above availed to their board members and staff in the CRMS as well as regularly update these credit facilities on monthly basis,” she said.

    She said the circular serves as a reminder and warning to all banks adding that any observed breach will attract severe sanctions.

  • CBN sells $300 forex at WDAS

    CBN sells $300 forex at WDAS

    The Central Bank of Nigeria (CBN) said it sold 300 million dollars at the rate of N155.76 to the dollar at its 69th Wholesale Dutch Auction System (WDAS) on Wednesday.

    The News Agency of Nigeria (NAN) reports that the naira has continued to maintain the exchange rate of N155.76 to the dollar at the last seven auctions.

    The apex bank, in a summary of the auction posted on its Website, said that the 300 million dollars sold was the total amount offered for sale.

    The number of banks that participated at the auction was 18 against 20 at the previous auction

  • CBN hails investment in Chinese currency

    CBN hails investment in Chinese currency

    Nigeria’s investment of foreign reserve in the Chinese currency, Renminbi, has paid off handsomely, the Central Bank of Nigeria (CBN) said yesterday.

    The apex bank also said that the economy is strong.

    Mallam Sanusi Lamido Sanusi, the bank’s helmsman, spoke at the Regional Course on Optimising Reserves and Foreign Exchange Management for Income Generation.

    It was organised by the West African Institute for Financial and Economic Management (WAIFEM) in Abuja.

    He said: “The CBN, two years ago, took the strategic decision to diversify the reserve base by investing in Renminbi and it has paid off because in the last two years, Renminbi has been appreciating.”

    Sanusi was represented by CBN Deputy Governor (Operations) Mr. Tunde Lemo.

    Lemo said: “Before now, people thought only currencies of the OECD economies were good enough, that is the euros, the dollars, the Japanese Yen and so on and so forth. But today, there are emerging economies like in China, the Renminbi.”

    The OECD countries are developed economies made up of 34 countries founded to stimulate growth and world trade. They are mainly European countries.

    The CBN Deputy Governor added that African countries were not investing their reserves in the continent because they have currencies that are not internationally convertible.

    He said: “It may take time before we begin to see African countries investing in other African currencies. But, at least economies like China, Australia, Canada, South Korea may begin to see an upsurge in investments because of the trajectory of their currencies.”

    Lemo said: “The issue about risk is changing because of the dynamics of the global economy and, of course, you know pretty well that there are current issues around the currencies all over the world and the debate is ongoing whether or not the dollar will continue to be the de facto currency.”

    As a result of this development, many countries, he said, “are making a basket of currencies where they keep their reserves so that they can mix their risk and then begin to diversify”.

    On the health of Nigeria’s economy, the CBN governor said the reserve of $46 billion ranks second or third highest in Africa after Algeria “and that is really very remarkable.”

    The CBN, however, cautioned that “there might be occasional fluctuations in our foreign reserves”.

    Lemo said: “Our reserve level is very strong at approximately $46billion and that’s approximately 11 months of imports. The fundamentals of the Nigerian economy are very strong, occasionally there might be increase or decrease, it has been hovering between $45 and $47billion and that’s very strong.”

    WAIFEM Director General, Prof Akpan Ekpo cautioned that unless Nigeria begins to actively produce for export to other countries, the current instability witnessed by Naira would continue.

    Ekpo said the trend of exporting raw crude oil to earn foreign exchange will not strengthen the value of the naira.

     

  • Naira strengthens after dollar auction

    Naira strengthens after dollar auction

    The naira strengthened the most this month, erasing earlier declines, after the Central Bank of Nigeria (CBN) sold the largest amount of dollars in two weeks at an auction.

    The naira appreciated by 0.5 per cent to N162.60 per dollar as of 4:43 p.m. in Lagos, posting its biggest gain since August 30, according to data compiled by Bloomberg.

    The apex bank sold $300 million at a foreign-exchange auction to lenders yesterday, it said in an e-mailed statement. That’s the most at a sale since August 26, according to data on its website. The regulator, which sells dollars at twice-weekly auctions to support the naira, is the country’s major supplier of foreign currency.

    “Increased dollar supply by the apex bank reduced pressure on the naira, prompting the local unit to strengthen,” Tunde Ladipo, the Chief Executive of Lagos-based Valuechain Investment Limited, said by phone.

    The yield on Nigeria’s Eurobonds due January 2021 slipped two basis points, or 0.02 percentage point, to 5.875 per cent.

    On the westcoast, Ghana’s cedi weakened 0.1 per cent to 2.1800 per dollar in the capital, Accra, its lowest level on record.