The Nation Newspaper

Tag: cbn

  • CBN backs BoA’s agenda

    The Central Bank of Nigeria (CBN) will continue to support the efforts of the Bank of Agriculture (BoA) to reposition for better performance.

    CBN Deputy Governor, Financial Services Surveillance Dr Kingsley Moghalu said this while receiving a delegation from the Rabobank of Netherlands in Abuja.

    according to a statement, the delegation came at the instance of BoA which has just entered a partnership with the Rabobank of Netherlands.

    He said the CBN is in support of the restructuring of the bank, adding that it is a step in the right direction.

    Moghalu said CBN has a ‘strong role’ for the transformed BOA and commended the management for trying to transform the institution.

    He said the apex bank has been making spirited efforts to promote agriculture, adding that BoA has played an important role in this regard.

    The Managing Director, BoA, Dr Mohammed Santuraki, said the partnership between the two banks would produce the desired results. He said Rabobank has a similar history with the BoA, and that both institutions are poised for growth.

    He said the management of the bank has initiated efforts to create a viable sustainable institution that would not rely on its stakeholders for recapitalisation. He said BoA needs to become a broad-based rural bank with a licence to work both sides of its balance sheet.

    In a related development, a team of two senior executives of Rabobank, who visited the BoA head office in Kaduna, expressed satisfaction with the arrangement. The officials namely, Messrs Gerard Van Empel, Director/Founder Rabo Development and Frank Nagel, Head, Banking Advisory had interactions with the BoA Management.

    Also, the team interacted with some BoA field operation staff and clients to have a feel of the activities of the bank.

     

  • CBN, NDIC begin quarterly inspection of MfBs

    CBN, NDIC begin quarterly inspection of MfBs

    Microfinance Banks (MfBs) are now to undergo a quarterly inspection by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to ascertain the state of their financials, The Nation has learnt.

    Managing Director, Partnership Investment Company Plc, Mr Victor Ogiemwonyi, said the focus of the examination is to check the lenders’stress level, clean up delinquent loans and reorganise balance sheets to forestall unwholesome practices that resulted in liquidation of many of the MfBs in the past.

    He said the apex bank has begun intensive sensitisation of the subsector, educating the operators on risk management and corporate governance.

    Explaining why some of the MfBs could not survive, the apex bank said many of MfBs were deficient in their understanding of the microfinance concept. It also listed poor corporate governance and high levels of non-performingloans, among others, as key challenges facing the subsector.

    According to CBN’s operational guidelines for the establishment of microfinance banks, they are not expected to engage in excessive spending.

    The CBN had last month restated that the December 31, 2012 deadline for recapitalisation of MfBs are sacrosanct. In a circular to all banks, CBN Director, Other Financial Institutions, Mr O.A. Fabamwo, said it was exigent to remind directors and shareholders of MfBs that the deadline would not be extended.

    He, however, advised the banks to conduct due diligence and seek professional legal and financial advice.

    Moreover, he reminded directors and shareholders of MfBs about, particularly the capital requirements for each category of MfB and existing branches/cash centres among others.

    He said, henceforth, ‘customer interaction centres’, ‘meeting points’ and ‘customer service centres’, or similar outlets, located outside the registered business premises of a Unit MfB shall be regarded as unauthorised/unapproved branches/cash centres if the deadline is not met.

    Besides, previous approvals for such outlets for Unit MfBs have lapsed from the date of approval of the Revised Policy Framework by the Board of the CBN.

    He said the penalty for operating a branch/cash centre without prior approval of the CBN as stipulated in Section 13.1(b) of the Revised Guidelines for MfBs is N250,000 per branch for a Unit MfB, N500,000 per branch for a State MfB and N1 million per branch for a National MfB.

     

    In addition, such unapproved branched/cash centres would be closed within 30 days.

    Many of the MfBs liquidated by the Nigeria Deposit Insurance Corporation (NDIC) ran into trouble when their debtors refused to pay back their loans, over 80 per cent of which were unsecured. Besides, some of the MfBs were taking excessive risks, and branching out too quickly without considering resources at their disposal and whether utilised funds were short or long term obligations.

    A unit MfB bank is authorised to operate in one location without branches/cash centres and is required to have a minimum paid up capital of N20 million while that of a state is expected to have a minimum paid up capital of N100 million. It is equally allowed to open branches within the same state or the Federal Capital Territory. But the national MfB is authorised to operate in more than one state, including the Federal Capital Territory (FCT).  It is required to have a minimum paid up capital of N2 billion and is allowed to open branches in all states of the federation and the FCT, although subject to prior written approval by the CBN.

     

  • CBN defers rollout of cash-less banking nationwide

    CBN defers rollout of cash-less banking nationwide

    • Lagos scheme under review

    The Central Bank of Nigeria(CBN) has explained why cash-less banking did not take-off in other parts of the country on January 1 as proposed.

    It said the change in plan is to provide opportunity for assessment of the Lagos scheme by stakeholders.

    CBN Spokesman Ugochukwu Okoroafor told The Nation that though there is substantial progress in promoting e-payment initiatives in the country, there is no system that does not have its challenges.

    “Some of those challenges experienced in promoting the initiative in Lagos have to be discussed and addressed before the nationwide rollout,” he said.

    Chairman, House of Representatives’ Committee on Banking and Currency Mr Jones Onyereri, said the rollout should start after 80 per cent success rate is achieved in Lagos.

    Speaking at the African Chartered Institute of Bankers (ACIB) induction in Lagos, he said the cash-less policy would lead to a reduction in bank charges to accelerate financial inclusion.

    Last year, 90 per cent of banking transactions conducted in Lagos State were still cash-based, according to data obtained from the Financial Derivatives Company Limited. For instance, despite the high penetration of mobile phones in the country, the use of mobile banking is yet to gain momentum.

    According to Okoroafor, structures are in place to address complaints that may arise from the use of Automated Teller Machines (ATMs), Point of Sale (PoS) terminals and online transfers.

    These structures, made it possible for them to correct any anomaly, during transactions. He promised that where such hitches become rampant, the CBN would intervene.

    “The CBN is studying feedback on Lagos Pilot before nationwide rollout of cashless banking policy to accommodate stakeholders’ observations. We will go ahead with nationwide rollout after studying their feedbacks. There have been lessons learnt,” he said.

    Analysts insist that the CBN has to address issues relating to e-payment fraud, power failure during the use of ATMs and PoS, delayed credit to PoS merchants accounts and debiting of customers’ accounts without payment.

    On fraud, the CBN in collaboration with Nigeria Electronic Fraud Forum (NeFF) and Nigeria Interbank Settlement System (NIBSS) have set up fraud detection portal to enable banks to share fraud data information. The CBN has also mandated banks to resolve ATM-related complaints within 72 hours or be sanctioned among other initiatives.

    The apex bank said it is on top of the situation of combating electronic fraud.

    CBN Deputy Governor, Operations, Tunde Lemo, explained during an e-payment forum in Lagos, that the CBN “has set up an industry-wide Nigeria e-Fraud Forum, which will serve as an official body to represent the industry on fraud-related issues, while enabling a forum for payment of stakeholders to share data on fraud attempts and tackle these issues, to minimise fraud attempts and limiting losses”.

    Despite challenges facing the initiative, CBN said there has been an increase in the payment channels to meet the targeted growth for the industry.

    It said PoS channels have been increasing in tandem with the aspirations of the financial regulator to promote the cashless banking initiatives.

    The apex bank said the number of ATMs has increased in the industry compared with what it was a few years ago. It said the emphasis is on the payment platforms to foster the growth of cashless banking and further made more people have access banking services.

  • Delta board to notify CBN, EFCC on missing N1.1b from bank

    The Delta State Board of Internal Revenue has said it would report two banks to the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) on the “disappearance” of N1.106 billion tax paid by Chevron Nigeria Limited.

    It was gathered that the money was deducted from December salaries and allowances of Chevron’s staff.

    The money was paid through a first generation bank to the Board’s account on December 27 via CBN/RTGS confirmation number O0032P0026000012.

    A controversy ensued when the money failed to reflect in the board’s Diamond Bank account, weeks after the electronic transfer was reportedly done.

    Financial experts say the process usually takes hours to complete.

    The Branch Manager of Diamond Bank in Asaba, Mrs. Noma Imilar, who was contacted on Monday, refused to comment.

    She said only the topmost echelon of the bank’s headquarters in Lagos could comment on the matter.

    However, a DBIR source said: “The Chairman, Thomas Joel-Onowakpor, is determined to pursue the case to its logical conclusion.

    “Plans are on to invite the EFCC to unravel the mystery of where the fund was within the last 11 days.”

    “We are also contemplating making formal complaints to the CBN through the relevant channel because this is not only embarrassing, it is unethical.”

    The Nigerian Inter-Bank Settlement System (NIBSS) could be called upon to unravel the truth and prove which side is telling the truth.

    Our independent investigation showed that the incident has led to a frosty relationship between the two banks.

    One of the correspondence obtained by our reporter had one banker telling the other: “I am telling you in confidence that we have not received it.

    “You confirmed that you sent it since the 31st (December)!

    “How come it has not yet reached us? You are a banker and integrity is very key.”

    Joel-Onowakpor said: “It is true that we have been trying to fish out which bank is holding on to our funds.

    “When we are through, the bank will be publicly sanctioned and I also expect CBN to take action on this.”

  • Missing funds: Delta tax board to drag banks to CBN, EFCC

    Missing funds: Delta tax board to drag banks to CBN, EFCC

    The Delta State Board of Internal Revenue has vowed to drag the management of two banks before the Central Bank of Nigeria and the Economic and Financial Crimes Commission over the disappearance of N1.106 billion tax deduction from Chevron Nigeria Limited.

    It was gathered that the money was deducted as tax from December salaries and allowances of CNL’s expatriate and local staff for the month of December 2012.

    The money was paid through a first generation bank to the DBIR’s account on December 27, 2012 vide CBN/RTGS confirmation number O0032P0026000012 for N568, 600,285.60

    Controversy ensued when the money failed to reflect in the board’s Diamond Bank Nigeria Plc account weeks after the electronic transfer – CBN/RTGS was reportedly done.

    Financial experts said the process usually takes hours to complete.

    Branch Manager of Diamond Bank in Asaba, Mrs. Noma Imilar, who was contacted on Monday refused to comment, insisting that only the topmost echelon of the bank’s headquarters in Lagos are competent to comment on the matter.

    However, a DBIR source confided in our reporter on Tuesday that “The Executive Chairman (Hon. Thomas Joel-Onowakpor) is determined to pursue the case to its logical conclusion.

    “Plans are already in place to invite the EFCC to unravel the mystery of where the fund was within the past 11 days.

    “We are also contemplating making formal complaints to the CBN through the relevant channel because this is not only embarrassing, it is unethical,” our source said on condition of anonymity.

     

  • Operators attribute bullish run to retail, institutional investors

    Stockbrokers and investment pundits in the capital market have attributed the stellar performance of the market to renewed interest in the equities market by retail and institutional investors.

    Managing Director, Compass Securities Limited Mr Emeka Madubike, said retail and institutional investors increased their participation in the market to be part of the success story.

    Managing Director, Trust Yield Investment Limited, Alhaji Rasheed Yussuf, said investors were moving funds away from the money market because of the Sanusi’s remarks on the increasing debt stock.

    They said the growth followed decline in yields from treasury bills and government bonds.

    In separate interviews, the brokers said the new position of the Central Bank of Nigeria (CBN) to tackle inflation and rising debt profile contributed to the market growth.

    CBN Governor, Mallam Sanusi Lamido Sanusi warned the Federal Government to stop accumulating debts for future generations. He said the level of debt, if unchecked, could cause hardship for future generations.

    Yussuf said investors were also moving away from government securities to equities in anticipation of apex bank’s review of the monetary policies in 2013.

    He said opportunities in the market were enormous and that institutional investors were taking positions in the market ahead of 2013.

    Another stockbroker added that the reforms introduced into the market needed to be sustained for sustainable growth. He said there was the need for more investor education to increase local participation.

  • MfBs’ deadline to recapitalise ends today

    Many microfinance banks (MfBs) are yet to close their branches and cash centres in defiance of the recapitalisation deadline set by the Central Bank of Nigeria (CBN)

    The apex bank gave today as the last day for MFBs fo recapitalise or close shop.

    Sources said some of the banks want to make more revenue, hence their decision not to close their branches.

    They said the development runs contrary to the provisions of the Revised Microfinance Policy Frameworks of CBN, which stipulates that certain category of banks must close their branches before recapitalisation. The issue, they said, attracts sanctions depending on the level of recapitalisation required

    A Director, Other Financial Institutions Department (OFID), CBN, Mr Olufemi Fabanwo, said failure of the banks to comply with the provisions of the revised guidelines would attract punishment.

    Citing the guidelines, Fabanwo said erring banks would be penalised.

    He said: ”It is also pertinent to know that the penalty for operating a branch or cash centre without prior approval of the CBN, as stipulated in Section 13.1(b) of the Revised Guidelines for MfB is N250,000, N500,000 per branch for  a unit and state MfB, and N1million for a national Mfb.“

    He said the apex bank would not entertain a waiver, a reduction of penalty or extension of compliance deadline.

    Chairman, National Association of Microfinance Banks (NAMBs), Southwest Region, Mr Olufemi Babajide, said the banks have been trying to abide with the CBN’s directives.

    However, Babajide said the banks are law-abiding, and would not like to incur the wrath of the CBN, adding that the operators know that they are bound by the CBN rules. He assured that they would comply with the CBN’s directive.

    Babajide’s predecessor, Mr Mathias Umeh, said the banks are trying to abide by the guidelines, adding that the banks have begun merger talks as an option to get the required capital base.

    He said the aim is to meet the deadline to avoid sanctions fromthe apex.

  • External reserves ‘down’ by $80m

    External reserves ‘down’ by $80m

    The Central Bank of Nigeria said the nation’s external reserves had dropped by 80 million dollars (about N12.4 billion).

    The drop, reported on the bank’s Website on Friday, represented a 2.81 per cent decrease.

    The News Agency of Nigeria reports that by the drop, the nation’s external reserves now stand at 44.26 billion dollars from 44.34 billion dollars reported on December 24.

    NAN reports that the nation’s external reserves had been on the increase since August, but started declining on December10.

    The Minister of Finance, Dr. Ngozi Okonjo-Iweala, has stressed the need for Nigeria to shore up its external reserves.

    Okonjo-Iweala, at a meeting with the Organised Private Sector in July, said that there was the need to build up the reserves to 50 billion dollars before the end of December.

    She said that high external reserves would help the country in the event of any economic recession.

     

  • CBN lists recapitalisation options for mortgage banks

    The Central Bank of Nigeria (CBN) has outlined the options for recapitalisation available to Primary Mort-gage Banks (PMBs).

    CBN Director, Other Financial Institutions Department (OFISD), O.A. Fabamwo, said PMBs could raise funds from the capital market, right issue, private placement, public offer, business combination, mergers and acquisition to enable them meet the recapitalisation deadline of April 30, 2013.

    He said it was important to remind directors and shareholders of the options to meet the prescribed capital requirements of N5 billion for National PMBs and N2.5 billion for State PMBs and the documentation requirements to obtain regulatory approval for each option.

    He, advised the banks to conduct due diligence and seek professional legal and financial advice. However, the PMBs that may choose to undertake rights issue, private placement, or public offer, are advised to complete the process and submit the documentary requirements for verification on or before March 31, 2013.

    This, he said, is to allow enough time for the capital verification exercise and subsequent correction of any discrepancy and/or submission of any additional evidence that may be required, to ensure that the capital is verified, confirmed and approved before the stipulated deadline.

    Also, the PMBs that may choose the business combination option would have to comply with the requirements of the Banks and Other financial Institutions Act (BOFIA), Companies and Allied Matters Act (CAMA), 1990 and the Investment and Securities Act (ISA), 2007.

    They are also to obtain regulatory approvals of the Securities and Exchange Commission (SEC) and the CBN, hold statutorily required meetings and obtain orders of the courts, where necessary.

    “These timelines are for guidance only. PMBs are strongly advised to conclude the processes even before the recommended timelines,” he said.

  • MfBs record N5.8b loss

    • CBN urged to extend Dec. 31 recapitalisation deadline

    A microfinance banks recorded a loss of N5.8 billion last year, the Central Bank of Nigeria (CBN) has said.

    Speaking at a forum organised by the National Association of Microfinance Banks (NAMBs) in Lagos, a senior staff member of Other Financial Institutions Department, (OFID), CBN, Mr David Adelana, said despite the loss, the banks are determined to improve and engender economic growth.

    He said: “Based on the CBN’s report, the microfinance institutions have significantly reduced their losses from N11 billion in 2010 to N5.8 billion in 2011. This is, in spite of various odds in the sub-sector and the economy in particular.”

    He said the apex bank introduced the Know Your Customer (KYC) policy to mitigate risks in the industry, advising the banks to apply stricter measures to safeguard depositors’ funds.

    He said certain commercial banks contend with a lot of dormant accounts because their owners are not bothered.

    “First Bank and Union Bank are having many dormant accounts. “The reason is because people that opened these accounts do not come back to operate them. This is one of the reasons behind the introduction of KYC guidelines. It is now left for banks to put in place customer due diligence in place to control risks,” he added.

    MfBs have called on CBN to extend the recapitalisation deadline by one year. The operators said the December 31, deadline is not feasible because of the poor state of the sub-sector, urging the banking watchdog to extend the deadline for recapitalisation to December 2013.

    Reacting to the CBN’s circular entitled: “No deadline extension for Microfinance Banks and Primary Mortgage Institutions” dated December 20, 2012, the Chairman, NAMBs, Southwest Region, Mr Olufemi Babajide, said the banks had no choice but to seek an extension of the deadline. Babajide said though some banks have agreed to merge operations to get the capital base of N20 million, N100 million and N2 billion, they are still facing liquidity problems.

    He said operators were making efforts to get the required capital and further escape CBN’s hammer.

    “It is not that the banks are not taking the recapitalisation issue seriously. Since 2011, when the CBN imposed a multi-phase and flexible capital regime on operators, efforts are being made to ensure that operators recapitalised based on their capacities. However, liquidity squeeze has stalled the ambition of the operators to recapitalise and play at either local, state and national level as contained in the recapitalisation guidelines set for the banks,” he said.

    The association’s former National President, Mr Mathias Umeh, said recapitalisation is germane to the growth of the sub-sector. He said operators still have more time to shore up their capital base for growth. He said strategies on how to meet the capital base have been evolving among the operators since last year.

    He advised operators to double their efforts to recapitalise their operations, in case CBN extends the deadline.

    He said mergers and acquisition process continues in the sub-sector, stressing that the bigger banks are entering into agreements with the smaller ones to form bigger and stronger institutions.