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Tag: cbn

  • Experts hail CBN on banks’ foreign subsidiaries financing

    Some financial experts have praised the Central Bank of Nigeria (CBN) for stopping banks from using their funds to finance foreign subsidiaries.

    The step, they said, would checkmate fraudulent practices and enhance sanity in the financial system.

    According to them, the banking sector is overheated and it needs effective measure to restore investors’ confidence in it.

    Former President, Finance Houses Association of Nigeria, Eddie Osarenkhoe, said the initiative was welcome because it would make credit facilities available in the economy. He said it was regrettable that banks mobilised money from the public and diverted it to run subsidiaries at the expense of giving loans to customers.

    According to him, the funding of bank subsidiaries with public fund has made the financial sector incapable of discharging its financial obligations to the customers.

    Osarenkhoe said many banks had been hiding under the universal banking system to siphon money for personal use and negatively affected the industry. He said that corruption in the banking sector led to the financial crises in the banks.

    “The CBN’s ability to implement and enforce the directive will bring sanity and reduce capital flight out of the country,” he said.

    Also, the President, Association of National Accountants of Nigeria (ANAN), Dr Samuel Nzekwesaid the move by CBN would curb money laundering. “The collapse of the capital market was due to actions of the bank executives to divert money and buy shares in the same bank to finance their subsidiaries,” Nzekwe said.

    He said many bank managers borrowed money from the banks and used them to buy stocks of their subsidiaries and converted them to personal use.

    Nzekwe said many banks in the country failed to become mega banks because of the lack of capacity to give long term loans to customers and failure to finance their foreign subsidiaries effectively.

  • IMF to Nigeria: keep inflation, credit growth rates moderate

    IMF to Nigeria: keep inflation, credit growth rates moderate

    • Cuts global growth forecasts

    The International Monetary Fund (IMF) has advised Nigeria, other developing economies and emerging markets to retain their ability to respond flexibly to shocks by maintaining sound fiscal position, by keeping inflation and credit growth at moderate rates.

    The agency disclosed this in its October 2012 World Economic Outlook (WEO), released yesterday.

    The nation’s inflation rate for August was 11.7 per cent. Historically, from 2006, the inflation rate averaged 10.6 per cent, reaching an all time high of 15.6 per cent in February of 2010 and a record low of 3.0 per cent in July of 2006. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power.

    Following the adoption of a tight monetary policy by the Central Bank of Nigeria (CBN), credit extended to the private sector only increased 4.7 per cent between December 2011 and July 2012, despite year-on-year growth rates of 40 per cent-plus, which was partly attributed to the Assets Management Company of Nigeria’s (AMCON) bonds.

    Analysts expect a pick-up in credit growth from the first quarter of 2013, which will accelerate once rates begin to ease. But the Federal Government has not really succeeded on the fiscal front.

    The agency also noted that in emerging markets and developing economies, activity has been slowed by monetary policy tightening in response to capacity constraints, weaker demand from advanced economies, and country-specific factors.

    “Policy improvements have raised their resilience to shocks. Since the crisis erupted in 2008, expansionary policies have buffered the negative impact of the weakness in advanced economy markets: fiscal deficits have typically been above pre-crisis levels, whereas real interest rates have been lower.”

    It said domestic credit has grown rapidly. “Over the medium term, policymakers will need to ensure that they retain the ability to respond flexibly to shocks by maintaining a sound fiscal position and also by keeping inflation and credit growth at moderate rates,” the IMF stated.

    In this respect, the Fund said policy tightening during 2011 was appropriate, stressing that given the growing downside risks to external demand, central banks have appropriately paused or reversed some of the monetary policy tightening measures.

    The IMF also lowered its global growth forecasts to 3.3 per cent and 3.6 per cent for the year 2012 and 2013, respectively.

    This is slightly lesser than the July 2012 WEO update that projected a global growth of 3.5 per cent in 2012 and 3.9 percent in 2013, respectively.

    “The recovery has suffered new setbacks, and uncertainty weighs heavily on the outlook. A key reason is that policies in the major advanced economies have not rebuilt confidence in medium-term prospects. Tail risks, such as those relating to the viability of the euro area, or major U.S. fiscal policy mistakes, continue to preoccupy investors,” the report said.

    The Fund however forecast a relatively solid output in many emerging markets and developing economies, but noted that output remains sluggish in advanced economies.

    “Unemployment is likely to stay elevated in many parts of the world. And financial conditions will remain fragile,” it added.

  • Prepaid credit cards used for money laundering, CBN, EFCC, others allege

    Prepaid credit cards used for money laundering, CBN, EFCC, others allege

    Prepaid credit cards are being deployed in borders for money laundering, the Nigeria Electronic Fraud Forum (NeFF), has said.

    The NeFF, comprising the Central Bank of Nigeria (CBN), the Economic and Financial Crimes Commission (EFCC) and commercial banks, spoke in Lagos.

    The laundered money is often used for terrorist financing. The planning, logistics and acquisition of objects for terrorist actions often require cross-border transfer of funds to the country of destination.

    Digital Encode Limited, NeFF partner, said money laundering is an intentionally-committed crime that signifies the conversion and transfer of assets of an illicit origin. The objective of this action consists of disguising the true origin, location, nature, disposition, movements and transfer of assets acquired from illegal activities.

    Participation, support or facilitation of illegal activities, such as transfer of money of illicit origin to several bank accounts and afterwards their conversion into legal financial products, are regarded also as money laundering actions.

    NeFF said: “Direct importing of cash will be avoided for the reason of strict border control; more sophisticated techniques will rather be applied for quick and mostly complex transfer of funds through existing legal and illegal transfer systems and financial instruments.”

    The money laundering techniques involving direct use of electronic payment systems is often linked to terrorism financing and it is used only as a transporting instrument in one of the three phases of the money laundering cycle.

    “Money wire transfers can be characterised as the easiest transfer method within the money laundering activities. Transfers are financial transactions by which values are transported from the payer to the payee electronically over telecommunication networks,” it said.

    Chief Technical Officer, Digital Encode Seyi Akindeinde said the laundered fund is detrimental to economies of nations, including Nigeria.

    He said prepaid card services have a unique ’domino effect, which brings the unbanked into the formal financial system, but it has to be guided against being hijacked by money launderers because of its simplicity in usage.

    “The expansion of e-payment platforms is an exciting opportunity to reduce the cash economy, making the market safe while simultaneously improving the lives of the poor. We insist that it is only through a careful analysis of the actual risks posed that appropriate proportionate regulation and controls can be developed,” he said.

    Other features that make prepaid cards vulnerable to money laundering include anonymity, elusiveness (untraceable transactions), rapidity and lack of oversight.

    He however, explained that even in the worst-case scenario where a mobile customer is not registered, transactions are less anonymous than with cash, since they can be linked to a unique mobile number and since transactions (sender’s mobile number, amount, receiver’s mobile number, date) are recorded and traceable. This differs from cash where there is neither a unique identifier for the user nor a recorded trace of the payment.

    He said whilst cash transactions are untraceable, mobile money transactions are clearly traceable in the system of mobile operators as part of usual business practice.  For instance, telephone number (sending and receiving), time and the amount of the transaction are known to the mobile operator.

    According to him, over a distance, the electronic character of mobile technology can make transactions much more rapid and effortless than cash. Rapidity is therefore a bigger risk factor for mobile money services than for cash. In the case where there are no automated internal controls, this can provide efficient means for criminals to launder money.

    He added that while the cash economy lacks oversight, a mobile operator offering mobile money services is regulated. He explained that where laundered money is loaded onto a prepaid debit card that is given to another individual for use, it could look very much like any normal transaction with no observable loss to the card issuer. Therefore, prepaid cards he explained are an example of a payment method that provides a potentially attractive vehicle for enabling money laundering transactions.

    According to him, payment providers and others in the card industry have reacted by putting restrictions on load limits and requiring cardholder identification to help eliminate the potential for using prepaid cards in money laundering.

  • CBN debtors’ list

    CBN debtors’ list

    •People who take loans must be ready to pay or face the consequence

    LAST week, the Central Bank of Nigeria (CBN) returned to the name-and-shame tactics of publishing the names of the financial sector’s biggest debtors. Prominent among the 113 companies and 419 directors/shareholders in the list are Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide, Prof Barth Nnaji (former Minister of Power), Mrs. Elizabeth Ebi and Dr. Wale Babalakin.

    Unlike in the past when it stopped at the point of making the names public, this time, the apex bank announced the extraordinary measure of shutting them out of further credit. It also threatened to hand them over to law enforcement agents in the event of their continuing neglect to fulfill their repayment obligations to the lenders. Banks which flout the directive would be made to make an immediate provision of 100 percent of total principal and interest outstanding in the account of the customer and related parties – without prejudice to regulatory action that the CBN may further take.

    As a newspaper, we are torn between the tendency to criminalise debts that is increasingly commonplace, which we deplore, and the offensive criminal impunity underlying the transactions that have now constituted an albatross to the financial system. Much as we are willing to concede to a world of difference between the class of genuine borrowers who became unwilling victims more by factors beyond their control than anything else – and the class that now constitutes the delinquent class renowned for preying on the financial system, the trouble has been in spotting the difference.

    Unfortunately, in the circumstance in which the banking sector found itself saddled with a staggering toxic loan portfolio of N3.4 trillion, the CBN seems to have reasoned that the situation dictated drastic measures. At this point, it is increasingly hard to fault the apex bank. True, the Asset Management Corporation of Nigeria (AMCON) has taken over most of the toxic loans in the bid to give some breather to the financial system; this itself has come at huge costs to the treasury. Meanwhile, a good number of the debtors have neither shown enough efforts to engage their creditors let alone the willingness to pay what they owe.

    The measure by the apex bank, in our view, speaks to the exigency of the situation. The initiative, and, if we dare say, courage, by the CBN in making public the names of the individuals, is deserving of commendation. Far from being drastic, it comes with the territory that those who borrow from the financial system must see themselves as having the obligation to pay. Failure should therefore come with expectations of penalties, if only to discourage irresponsible debtors from bringing the roof down the heads of everyone.

    In the specific case, it seems to us a necessary step to complement the on-going efforts to sanitise the financial sector. It is important to send the signal to those whose activities contributed in no small measure to the unravelling of the sector that the impunity of that era would not be overlooked. We cannot imagine a closure to the unfortunate event that culminated in the failure of some of the nation’s big lenders, and the collateral cost of the loss of investment by nearly two million shareholders, outside of the drastic prescription. Those not averse to hiding behind legalism to frustrate legitimate debt recovery need to be taught the lesson that the alternative to being credit-worthy is being shut out of formal credit. If we must make the laws stricter to make it mandatory for people to know that loans are no free funds, we should not hesitate to do so.

    All said, we must note that the financial system would not have found itself in this mess if credit bureaus were in operation. Clearly, the coming of the bureaus as a guide to the making of credit decisions has become imperative. Everything that needs to be done to get the bureaus on board must be done – immediately.

  • Lagos CJ, NBA President, Oguntade seek lower interest rates

    Lagos CJ, NBA President, Oguntade seek lower interest rates

    The autonomy of the Central Bank of Nigeria (CBN), a cash-less society, the suspended N5,000 banknote and a “suffocating” interest rate regime dominated discussions at the 2012 Annual Public Lecture organised by J-K Gadzama & Partners LLP, reports JOSEPH JIBUEZE.

    • How to realise cash-less economy, by ex-minister

    Is the Central Bank of Nigeria (CBN) too powerful? Some think so, arguing that it should be brought under legislative control so that some of its policies can be thoroughly examined before implementation. For others, no one should tamper with the bank’s autonomy.

    Speakers at the 2012 Annual Public Lecture organised by the law firm of J-K Gadzama & Partners held divergent views on whether CBN’s powers should be whittled down.

    To a former Information Minister Frank Nweke (Jr), who delivered the lecture entitled: Nigeria in the Year 2012: The Vision of a Cashless Economy, the National Assembly must not tamper with CBN’s autonomy.

    Nweke, Director-General of the Nigerian Economic Summit Group, described as “unhealthy” what he said was a deliberate effort to by the government to “subordinate” the CBN.

    “This is unhealthy and clearly portends danger for the management of Nigeria’s monetary policy management. In order for the CBN to be effective, their work must be devoid of any political considerations and or interference

    “The precedents which are now being laid by the National Assembly with the proposed amendment of critical sections of the CBN Act 2007 to strip it of its autonomy, and most recent interference in the project CURE, run against the grain of global best practices.

    “Whatever may be the concern of the National Assembly or other arms of government in the way and manner the CBN discharges its mandate can be handled more pragmatically through consultation and dialogue rather than setting a precedent which will subject the CBN perpetually to the whims of political actors of the day,” he said.

    CBN Governor, Sanusi Lamido Sanusi, represented by the CBN Deputy Governor, Corporate Services, Alhaji Suleiman Barau, who chaired the event, also warned against political control of the bank.

    According to him, politicians who “think short term” would be more concerned about pleasing the electorate with a view to winning election, and could try to hold the CBN back from certain policies that may appear unpopular.

    The CBN, he said, “thinks long term”; therefore allowing politicians to control it would not augur well for the economy’s lasting well-being.

    “Politicians will never allow us to manage inflation, interest rate simply because they want to win election,” Sanusi said.

    Executive Director, Community Development Foundation, Mr Akin Akintola, believes the CBN should have “100 per cent independence.”

    He however, said the bank “should not run too fast to get policies through in a manner that people suffer.”

    But a former Chairman, Senate Committee on Banking, Senator Nkechi Nwogwu, said the CBN “is not an island” and cannot be absolutely independent.

    She said: “There’s no agency that is an Island. We’re saying that there are some CBN projects need democratic review. Certain monetary policies must be brought before the legislature for a review. That’s what we’re concerned about.

    “We’re not at loggerheads with CBN at all. All we’re saying is that they should consider the opinions of Nigerians.”

    Chief Anthony Idigbe (SAN) agreed, saying the CBN should not be given the freedom of power without control, because, according to him, absolute power can lead to corruption.

    “The greatest fear of Nigerians is arbitrariness in implementation of policies. There should be some level of oversight over the CBN,” he said.

    Meanwhile, for other jurists at the event, the CBN should do more to reduce interest rates than bothering with introducing new naira notes.

    Chief Judge of Lagos, Justice Ayotunde Phillips, would want to see a reduction in the charges banks impose on transactions.

    “I am not happy with the bank charges,” she said.

    Nigerian Bar Association (NBA) President Okey Wali (SAN), represented by Dr Joseph Nwobike (SAN) described interest rate regime in Nigeria as “suffocating”.

    “Businesses should be encouraged to grow,” he said, adding: “The interest rate regime here is suffocating.

    “Over 60 per cent of businesses that borrow money from banks ultimately fail. Those of them who are operating do so on pretentious grounds. The issue of interest rate is more important to us Nigerians.

    “There is nothing with introducing N5000 banknote. What is wrong is access to it, and not whether or not it is introduced. In any case, the CBN Governor is doing very well. He’s an intellectual. But I think he has to do more in managing interest rate.

    “Just a few years ago, my account officer called me and said: ‘Doctor, do you have N50million? I’ll give you 50 per cent for 90 days.’ I said, ‘wow!’ And when I did my calculation, perhaps I don’t need to practice again. If I earn that amount in 90 days, I think that pays my salary.

    “So it is important for us to do something. The interest rate regime is going back to what it used to be. Banks are paying 15 per cent interest on deposits. The question is: What are they using that deposit to do?

    “We can’t see the businesses anymore. And if you look at a recent CBN publication, about 60 per cent of corporate Nigeria is bare.

    “The CBN, please do something, let us have 3, 4, 5 per cent interest rate for businesses to grow, so that our children and friends and nephews and nieces will have jobs.”

    A former justice of the Supreme Court, George Oguntade, also decried high interest rate, saying it is “curtailing growth.” “Something urgent needs to be done about it,” he said, urging Barau to take the message to Sanusi.

    Justice Oguntade recalled that he discouraged his wife from obtaining a bank loan to run a private school “because repaying is difficult.”

    Idigbe, who discussed Nweke’s paper, said even law firms need credit to carry on successful practices that can compete globally. “We need to rethink our proposition. There’s nothing wrong in having a firm of 600 lawyers,” he said.

    On the cash-less policy, Idigbe said cyber law are inadequate, and existing ones have gaps. He wondered, for instance, whether if someone sends scam messages and is caught, it amounts to internet fraud even if no one has actually been defrauded. New laws, he said, are needed to specify the crime.

    Insolvency laws too need to be looked at, he said, adding: “No one has ever looked at the bankruptcy law. It doesn’t have any business recovery provision.”

    Idigbe claimed there is no strategic focus on commercial law reform, even as there are conflicting bills. He urged the Attorney-General of the Federation to do more in that area. “The Attorney-General needs to focus on law reforms,” he said.

    He also suggested splitting the office of the Attorney-General from the Minister of Justice so that, according to him, one can actually do the work of law reforms, while the other “can sleep in Aso Rock playing politics.”

    Akintola criticised the imposition of penalties on Cash-lite Lagos, saying CBN should have encouraged incentives rather than fines. According to him, the government should also pay the penalties.

    Head of Chambers, J-K Gadzama & Partners LLP, Abuja Office, Mr Henry Michael-Ihunde, called for a strong regulatory regime for the legal profession.

    He said some lawyers may unwittingly encourage money laundering by not questioning the sources of their clients’ income.

    He said when a clients is ready to pay a lawyer cash with a huge sum, the lawyer should be concerned. “Every firm must have a money-laundering policy,” he said.

    Micheal-Ihunde also called for the establishment of an Independent Financial Ombudsman to address issues raised by bank customers in the cash-less regime.

    The Ombudsman, he said, should comprise people of diverse backgrounds who would investigate claims and sanction the banks when found culpable.

    “The banks are stealing our money and we have to do something about this,” he said. “We pay so much for poor services. Call their customer care, and no one will answer you.”

    Nweke in the lecture identified the pre-conditions for a nationwide take-off of the Cash-less policy in 2013. The first, he said, is the payment infrastructure.

    “The upscaling of the nation’s power supply capacity, in particular, is perhaps the singular most important success factor in sustaining the nationwide cash-less policy by reducing the downtime in operational equipment caused by power outages or lack of power supply,” he said.

    Also needed is a better approach to governance. Nweke said: “Government was conceived to cater to the welfare of the people and should therefore exist for the sole purpose of benefiting the people.”

    He added that the un-banked majority should be engaged “to reign in the significant portion of currency outside banks held by them.”

    The country, he said, is in need of a comprehensive legal and regulatory framework of policies that covers the most modern forms of financial activities and global standards of transparency and disclosure.

    Nweke also called for a modernised law enforcement approach to tackle cyber-crime and internet fraud.

    “The vision of a cash-less economy can indeed only be achieved when the socio-economic parameters of this geographical entity collectively ensure favourable standards of living for over 100 million Nigerians in absolute poverty which form 62 per cent majority of the population of the country.

    “Only then can this lofty vision of the cash-less economy be truly a reality,” he said.

    Chief Joe-Kyari Gadzama (SAN), whose firm organised the lecture, said it was in fulfilment of their corporate responsibility to the society.

    “By our mission and vision as a firm, we seek to contribute not only to the growth and progress of the legal profession in Nigeria, but the nation as a whole. This, we intend to achieve, through our Annual Public Lecture.

    “Over the years, issues affecting the Nigerian populace have been analysed and solutions proffered.

    “The annual event is part of efforts aimed at giving back a little to the society that has given us all we have today, especially now that we are not just a law firm, but a Limited Liability Partnership,” he said.

    Also at the event were former Head of Interim National Government, Chief Ernest Shonekan, Deacon Dele Adesina (SAN), Mr Fabian Ajogwu (SAN), among others.

  • FBN Capital backs CBN’s credit ban on debtors

    FBN Capital backs CBN’s credit ban on debtors

    The decision taken by Central Bank of Nigeria (CBN) to restrain debtors owing Asset Management Corporation of Nigeria (AMCON) from further access to credit is plausible, FBN Capital, an investment and research firm has said.

    The CBN had in a circular issued last on September 17, barred banks from extending credit to more than 100 companies, which owed the AMCON. This, FBN Capital said, was relevant because the full list, published in the local media, includes some members of successful consortia bidding for power plants.

    The investment firm said that AMCON, which acquired the debts under its bond exchanges, has suggested that the power sector bids will not be derailed as a result.

    It said that the National Council on Privatisation (NCP) has already indicated that the preferred bidders for five power generation companies (GENCOs) for sale offered a total of N110 billion.

    According to the report, a cursory look at the lists of successful bidding consortia reveals household names in the Nigerian banking, oil and gas, and conglomerate sectors as well as one state government and a state owned Chinese electricity utility.

    However, it observed that the preferred bids are still subject to due diligence by five public bodies and a final go-ahead by the NCP. They then have 15 business days after signing the appropriate concession agreement to pay 25 per cent of the total consideration.

    It recalled the unsuccessful privatisation of NITEL where one approved bidder paid the deposit but failed to produce the balance while another failed to make any payments and so forfeited its bid. However, the firm insisted that the strength and reputation of the consortia bidding for the GENCOs suggest this is an unlikely outcome.

    “There have already been delays in the sale of the GENCOs and more may follow. That said, we would stress that the process has attracted bids from consortia with technical expertise and financial clout. The exercise was never fiscal in nature but was designed to deliver power to the population,” it said.

    On the Excess Crude Account (ECA), it said the accounting treatment may still be affected by the dispute between the state governors and the Federal Government over ECA and the Sovereign Wealth Fund (SWF).

    It said the governors are now arguing that signature bonuses and dividends from Nigeria Liquefied Natural Gas (NLNG) should be paid into the federation account, adding that the governors may also broaden their demands as negotiations unfold.

    Besides, the research firm noted that analysis of the draft 2013 budget has shown that only N10 billion earnings are targeted from asset sales.

    The firm said that although the Bureau of Public Enterprises (BPE) suggested a figure of N200 billion in June, the N10 billion appears more plausible, given that bids for the electricity distribution companies (DISCOs) will not be opened until 16 October.

  • CBN, stakeholders fine-tune financial inclusion strategy

    The Central Bank of Nigeria (CBN) has said it is working with stakeholders in the financial sector to fine tune a strategy on ways to drive financial inclusion in the country.

    Financial inclusion, alternatively characterised as ‘access to finance’ has been defined as ‘universal access at reasonable cost, to a wide range of financial services to everyone needing them, provided by a diversity of sound and sustainable institutions.’

    A report from the apex bank indicated that going forward, the regulator will synthesize the schemes and programmes of stakeholders in the area of financial inclusion; establish weaknesses and causes of failure of these programmes and how to address them; define work and action plans of stakeholders to address financial inclusion in Nigeria.

    “The CBN will also promote workable models for fostering financial inclusion in Nigeria and who will own and drive them and set up special funds for promoting and developing a financial inclusion agenda for Nigeria,” it said.

    The apex bank noted that it will , in addition to some of its reforms, adopt some specific models to help drive financial inclusion, such as agent banking, mobile banking, financial literacy and consumer protection, model Point of Sales (POS) services and specialised banking, such as mortgage banking and non-Interest banking among others.

  • Banks slash online transaction charges

    Banks slash online transaction charges

    Banks have begun reducing transaction charges on their online deals ahead of final implementation of the ‘Guide to Bank Charges’, being reviewed by the Central Bank of Nigeria (CBN).

    Findings by The Nation showed that banks have started a piecemeal implementation of the draft guidelines, which is at the final stage of approval by the apex bank. The document was circulated for stakeholders’ input last July. Checks also showed that the review is to address complaints arising from bank tariffs and other miscellaneous fees charged on their customers’ accounts.

    For instance, First City Monument Bank (FCMB) last week communicated its decision to reduce charges on online transactions to its customers. In a mail tagged: Reduction of transaction charges on FCMBOnline, the bank slashed charges on transfers by 50 per cent. Transactions which cost N200 has reduced to N100; N300 slashed N150 and N500 reduced N250 respectively.

    “In a bid to ensure you are well informed, please be reminded of the reduction in our transaction fees for funds transferred to other banks on the FCMBOnline platform. Please note that you can also transfer funds up to a limit of N1 million daily, with N500, 000 per transfer,” it said in an emailed statement. The platform, it added further offers customers the opportunity to perform other banking transactions, such as Funds transfer, Forex transfer, Bills payment, Statement download, Cheque book /draft requests among others.

    Diamond Bank also said that deductions will no longer be made on account of customers that use the Diamond Debit cards for withdrawals on other banks’ Automated Teller Machines (ATMs). The lender said the move was to demonstrate its commitment towards customer satisfaction as well as its resolve to drive innovation in the industry.

    United Bank for Africa Plc has equally reduced charges associated with ATMs, significantly lowering the cost of transactions, particularly for its Verve debit card customers. The bank had introduced a pay-as-you-go charge structure instead of the monthly charge of N100, which a flat fee was charged to all ATM card holders. The Divisional Head, e-banking, UBA, Dr. Yinka Adedeji, said the move was aimed at delighting customers, following recent complaints and feedback as well as foster the cash-less initiative of the CBN to the mass market.

    Findings also showed that there have been slashes on Commission on Turnover (COTs) in many banks and downward review of SMS alert fees.

    The CBN said the ‘Guide to Bank Charges’, which was issued to the industry several years ago is being reviewed to protect bank customers’ interest. The review, which is at advanced stage is expected to be harmonised before final approval and implementation by banks.

    The apex bank said complaints arising mainly from high bank tariffs could threaten confidence in the banking system. It said that in reviewing and updating the document on the charges, the CBN will be guided by, among other factors, including considerations of financial inclusion, with particular emphasis on consumer protection, unit cost of banks, and contemporary developments in Nigeria’s banking industry.

    It lamented the current practices in a number of banks, where products and services are deployed at exorbitant costs to the customers, saying that the high costs have helped in no small measure in discouraging a large number of the population from assessing financial services.

    Dissatisfaction of banks’ customers could lead to loss of confidence in not only the affected banks but the entire system, and subsequently, could trigger run on the affected banks as well as the system.

  • ‘Irregular power supply inimical to growth’

    Operators have advised the Federal Government to create an environment to facilitate the utilisation of the development funds released by the Central Bank of Nigeria (CBN).

    The Secretary, Association of Food, Beverage, and Tobacco Employees, (AFBTE), Mr Aderemi Adegboyega said the effective utilisation of the N200 billion Small and Medium Scale Enterprise (SMEs), N300 billiion Power and Aviation Intervention Fund (PAIF), among others, depend largely on the economic environment.

    He said government’s ability to create wealth and employment would help fast-track the economy’s growth.

    Adegboyega said the inability to meet the electricity needs of Nigerians was a major setback in growing the economy.

    He said irregular power supply remained an impediment to SMEs’ moderated industrialisation and economic growth.

    “There is the need to fast-track development in the power sector so that the loan to SME can impact positive on the economy,” he said.

    The former President, Association of National Accountant of Nigeira (ANAN), Dr Samuel said that the government should also address the current security challenges in the country.

    He said economic stability will not thrive without conducive environment that determines the success of private sector operators and inflow of foreign investors. He urged the CBN to work against improper disbursement and poor implementation of the scheme.

    A lecturer with Pan African University, Dr Austin Nweke said that the proposed credit would only promote economic activities in an environment with developed infrastructure.

    Nweke said that infrastructure development would attract investors and provide job opportunities for unemployed youths.

    “Serious monitoring and transparency in the distribution of the fund would also ensure the achievement of the loans objectives,” he said.

    Nweke said the loan innovation would, if properly managed assist in harnessing the potential of Nigerians and contribute to the growth of the national Gross Domestic Product (GDP).

    He also urged government to establish a monitoring team that would through the CBN facilitate the provision of loans to SMEs’ at single digit interest rate from commercial banks.