The Nation Newspaper

Tag: cbn

  • CBN to regulate FinTech

    The Central Bank of Nigeria (CBN) plans to establish a Collateral Management Regime (CMR) to regulate the activities of financial technology (FinTech) firms and startups.

    Its Governor, Godwin Emefiele, in his keynote address at the inaugural Lagos Fintech Week in Lagos, said: “CMR is being developed in line with on-going efforts to evolve a robust collateral management regime which will be proportionate to transactional level of participants within the payment system.”

    Represented on the occasion by the Director, Payments System Management Department (PSMD), Sam Okojere, the apex bank chief said the consequences of the new regime are that both incumbents and new entrants will operate without unnecessary collateral burden.

    A fintech lawyer and partner, Private Equity Capital at the chambers of Aluko & Oyebode, Oludare Sembore who also spoke at the event said: “The Nigerian approach to FinTech regulation is somewhat similar to the United States and South Africa. FinTech in these countries are not governed by any specific legal framework, as the regulators are currently taking steps to understand the concept.”

    He said the FinTech space in the country is largely regulated by circulars and guidelines published by the CBN and a host of existing regulations that apply to “traditional financial service institutions.”

  • CBN to withdraw N7.9tr dirty, mutilated notes

    A LARGE proportion of the N7.9 trillion pieces of naira notes in circulation are dirty, mutilated, unfit for Automated Teller Machines (ATMs) and over-the-counter payments, the Central Bank of Nigeria (CBN) has said.

    A statement by CBN’s Deputy Governor, Operations Folashodun Shonubi  and Director, Currency Operations Department Mrs. Pricilla Eleje spoke of plans to withdraw such notes from circulation.

    The officials said the bank had the obligation of providing adequate supply of clean banknotes to facilitate seamless payment and settlement of transactions by the public, government and banks.

    CBN Governor Godwin Emefiele is “due in Lagos tomorrow to launch “The clean note policy and banknote fitness guidelines”.

    The CBN described the measure as the first step in its bid to address the sorry state of the notes in circulation and create a new culture for better handling of the currency.

    The clean note policy provides a uniform standard for the circulation of only clean and fit banknotes; while the banknote fitness guidelines provide the industry with clear and acceptable criteria for determining the quality of notes in circulation.

    The policy guidelines, the regulator said, were developed after extensive collaboration and engagements with key industry stakeholders under the auspices of the Nigerian Cash Management Scheme, a Bankers’ Committee initiative.

    The plan will ensure that unfit, dirty, mutilated and counterfeit banknotes are not in circulation. This is pursuant to Sections 18, 20 & 21 of the CBN Act 2007 which prohibits the counterfeiting, sale and abuse of the naira.

    The statement said: “The CBN cannot achieve these objectives without the collaboration of deposit money banks(DMBs), merchant banks, microfinance banks, government agencies, Cash-in- Transit ( CIT), Cash Processing Companies (CPCs), Market Associations, merchants/retailers, chambers of commerce and industry, security agencies, currency Management equipment manufacturers , bank customers and the general public.”

    It explained that over the years, the growth in economic activities and the upsurge in population had necessitated the rise in the volume of banknotes in circulation.

    The CBN said: “In view of technological advances, the CBN, like other central banks has introduced various forms of electronic payment systems for effective and efficient settlement of transactions and to reduce the volume of cash usage with its attendant cost implications.

    “Despite the prevalence of other forms of payment, cash remains ‘king’ in our day to day economic transactions. As such, people still prefer to use cash in making payments especially where there are no digital payment platforms.

    “Consequently, demand for cash continues to grow despite technological advances. Thus, the volume of currency in circulation as at the end of 2012 rose significantly by 10.34 per cent to 7,914.70 billion pieces, as at half year of 2018. A large proportion of the notes in circulation were dirty, mutilated, not fit for ATMs and over-the-counter payments.

    “To overcome the challenge, the CBN increases the supply of clean notes and withdraws the soiled and mutilated notes from circulation.

    “In addition, the bank introduces from time to time a number of currency management initiatives to ensure that the production, issuance of new notes, processing by third service providers as well as recirculation by the deposit money banks (DMBs) conform to the predetermined standards.

    “To ensure that the banknotes in circulation are clean and of high quality, the bank hereby issues the clean note policy. The clean note policy enunciated therefore by the bank, entails a spectrum of diverse currency management activities geared towards the efficient circulation of premium quality banknotes and withdrawal of unfit/soiled banknotes to guarantee public confidence and usage of the naira banknotes as a medium of exchange.”

  • Race for CBN governor heats up

    WITH the five-year tenure of the governor of the Central Bank of Nigeria, Godwin Emefiele, due to end in June, the jostle for his seat is already at a crescendo.

    Although no one seems to know the mind of President Muhammadu Buhari on the matter, there appears a consensus of opinion that the President is happy with Emefiele because CBN’s policies under him have stabilised the nation’s economy to a large extent.

    As it would be expected, lobbyists are all over the place bandying different names as Emefiele’s potential successor.

    The names being touted include those of a female banker and a governorship candidate in the just concluded elections.

    But the most prominent of the touted names is that of a serving governor who is believed to have won Buhari’s heart with his performance. However, whether the governor in question would prefer being CBN governor to his current portfolio remains a matter of conjecture.

  • 200 MfBs may go over CBN’s N50m capital base rule

    No fewer than 200 Microfinance Banks (MfBs) may be affected by the new Central Bank of Nigeria (CBN) guidelines that put minimum capital base for Tier-2 MfBs at N50 million, Managing Director/CEO, Nigeria Incentive-Based Risk Sharing for Agricultural Lending (NIRSAL), Aliyu Abdulhameed, has said.

    Speaking yesterday at the ongoing Finance Correspondents and Business Editors workshop organized by the CBN in Gombe State, Abdulhameed, said capitalisation for MfBs is crucial, as it determines the level of lending an operator can embark on.

    The CBN had last month, approved N5 billion minimum capital base for National Microfinance Banks. The minimum capital bases for State Microfinance banks was set at N1 billion; Tier 1 Unit Microfinance Bank, N200 million and Tier 2 Unit Microfinance Bank minimum capital base was pegged at N50 million. The apex bank also set a three-year timeline for all categories of MfBs to complete their recapitalisation process on or before April 2021.

    Abdulhameed, who spoke on the theme: NIRSAL Micro-Finance Bank and Real Sector Financing  said that there are over 37 million Small and Medium Enterprises (SMEs) in the country, and that only one million operators have access to credit.

    He said MfBs have to adequately capitalized to lend more to SMEs adding that more lending to the sector will be achieved with the partnership that has brought Nigeria Postal Service (NIPOST).

    According to him, NIPOST operates in 1,800 locations across the country, and has the capacity to help bring financial services closer to the grassroots.

    He said that NIRSAL has already brought in two million farmers into the financial system adding that bringing down interest on loans will require MFBs’s cost of operation to be reduced adding that 25 per cent of their operating cost goes to diesel.

    Also speaking, CBN Director, Other Financial Institutions Department, Mrs. Tokunbo Martins, said that SMEs sector is the biggest employer of labour globally and Nigeria is not an exception.

     

  • Reps probe CBN, others over stamp duties non-remittance

    The House of Representatives is to constitute an ad hoc investigative panel over to probe the non-remittance of stamp duty  by the Central Bank of Nigeria (CBN), money deposit banks and other collection agents.

    The lawmakers alleged the banks and other collection agencies of shortchanging the nation by refusing to remit the duties  into the Federation Account.

    The ad hoc panel has four weeks to carry out the assignment and report back for further legislative action.

    This followed the adoption of a motion of urgent public importance by  Hon Goni Lawan, who noted that independent efforts by both local and international civil society organisations (CSOs) to get details of the collections have so far failed.

    According to him,  the Nigeria Postal Service (NIPOST) in 2014 initiated the stamp duty collection scheme, following which a firm, the School Banking Honours (SBH) obtained authorisation of the CBN to engage the banks and other qualified collection agents.

    He said: “But the complicit irregularity by which public institutions including the CBN, Nigeria Interbank Settlement System (NIBSS), NIPOST among others, have over time failed to remit stamp duty taxes into the Federation Account running into trillions.

    “While the deductible amount per bank account may seem small, it cumulatively adds up to money in billions and trillions of naira, and must be subjected to the full condition of disclosure and transparency.

     

     

  • Interbank forex market gets $210m boost from CBN

    The Central Bank of Nigeria (CBN) yesterday intervened with the sum of $210 million to sustain liquidity in that segment of the market.

    According to the figures released by the CBN, authorized dealers in the wholesale segment of the market, as in previous deals, were offered the sum of $100 million, while those in the Small and Medium Enterprises (SMEs) segment got a boost of $55 million. Customers purchasing foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allotted a total of $55 million.

    The bank’s Director, Corporate Communications Department, Isaac Okorafor confirmed the transactions, reiterating that the CBN will continue to ensure the availability of foreign exchange in order to ensure continued stability in the markets.

    Read also: Shoprite Nigeria wins CBN award

    In its last intervention on Thursday, April 18, the bank injected the sum of $254.8million and CNY34.8 million into the Retail Secondary Market Intervention Sales (SMIS) segment.

    Meanwhile, the Naira exchanged at an average of N360/$1 in the Bureaux De Change segment of the market.

  • CBN bars mortgage banks from granting dollar loans to customers

    The Central Bank of Nigeria has barred Primary Mortgage Banks from granting foreign currency denominated mortgage loans to customers.

    The apex bank, which released the draft guidelines for the licensing and regulation of Primary Mortgage Banks, said the operators are also barred from granting  consumer or commercial loans, leasing facilities and engaging in estate agency or facilities/project management and  real estate development as well as other activities that the CBN may classify as non-permissible from time to time.

    CBN Director, Financial Policy and Regulation, Ibrahim Tukur, which signed the draft guidelines, said it was in exercise of the powers conferred on it by the Central Bank of Nigeria Act  and the Banks and Other Financial Institutions Act (BOFIA).

    The regulator also set minimum capital (National PMB) at N8 billion, regional PMB at N5 billion and non-refundable application fee of N1 million and  Non-refundable licensing fee of N2 million and N100,000 for  change of name fee.

    He said the new guidelines were to re-position the mortgage sub-sector with a view to harnessing its potentials for sustained economic growth. The guidelines introduced enhanced requirements for capital, risk management, internal control and corporate governance.

    “Notwithstanding the measures put in place, the mortgage sub-sector continued to struggle against headwinds occasioned by unfavourable macroeconomic and other developments. The guidelines have been reviewed to strengthen primary mortgage banks as well as complement other on-going reforms in the mortgage sub-sector,” he said.

    He said that Primary Mortgage Banks are permitted to engage in mortgage finance, real estate construction finance within the permitted limits, acceptance of savings, demand and time/term deposits, drawing from mortgage funds (such as National Housing Fund (and/or other related mortgage endowments) for on-lending and financial advisory services for mortgage customers.

    The banks, are also authorised to grant  granting mortgage/housing related consumer loans. These are enhancements to residential mortgages which shall be limited to furniture, home appliances and generators subject to a maximum of 10 per cent  of total loans.

    The mortgage banks are to also finance  rent-to-own properties, home improvement loans, incremental housing finance and other activities the CBN may approve from time to time.

    The new guideline also stipulated that the number of directors on the board of a Mortgage Bank shall be a minimum of seven and a maximum of 12.

    The non- executive members shall outnumber the executive directors at any point in time. Also, for non-Nigerian directors, a certificate/statement of good conduct from the Police Service (or other appropriate authority) in country of domicile shall accompany the resume, completed Approved Persons Questionnaire and copies of academic and professional qualification certificates.

    For resident non-Nigerian directors, reference shall be made to his employer, university, and legal permit to reside and work in Nigeria. This is in addition to a certified true copy of the director’s passport, completed Approved Persons Questionnaire and copies of academic and professional qualification certificates.

    Also, all directors and top management staff of Primary Mortgage Institutions shall comply with the requirements of the relevant governance codes, Approved Persons Guidelines and related regulations issued by the CBN from time to time.

    “The CBN may at any time vary or review any condition of a licence or impose additional conditions. Where a licence is granted subject to certain conditions, the PMB shall comply with those conditions to the satisfaction of the CBN within such period as may be deemed appropriate in the circumstances. Any PMB that fails to comply with such conditions shall be guilty of an offence under BOFIA,” the guidelines said.

  • Court attaches Imo State’s accounts in CBN, 16 other banks over N1.5b debt

    A High Court of the Federal Capital Territory (FCT) in Abuja has ordered the attachment of funds in accounts owned by the Imo State gvernment in the Central Bank of Nigeria (CBN) and 16 other banks over a N1.5 billion debt it owed a firm, E. F. Network Nigeria Limited.

    Justice Bello Kawu gave the order in a motion ex-parte for garnishee order nisi brought by E. F. Network Nigeria Limited and Gideon Egbuchulam.

    The garnishee proceedings was predicated on a March 8, 2019 judgment of the Supreme Court, which ordered the Imo State government to pay E. F. Network and Egbuchulam N1.5 billion as debt arising from the contract executed for the government.

    Justice Kawu ordered that all money held by the state in its accounts with all the listed banks should be attached for the purpose of satisfying the judgment of the Supreme Court delivered on the March 8 (which affirmed the concurrent judgment of the Court of Appeal and the High Court of Imo State).

    The judge gave the banks 14 days to show cause why the garnishee order nisi should not be made absolute in satisfaction of the judgment sum contained in the Supreme Court judgment.

    He adjourned till May 3 for the banks to show cause and for hearing on whether or not the garnishee order should be made.

    The banks listed with the CBN are Access Bank, Zenith Bank, Jaiz Bank, Union Bank, First Bank, U.B.A, Ecobank, Keystone Bank, Diamond Bank, Fidelity Bank, Polaris Bank, GTBank, Stanbic IBTC Bank, Unity Bank, Heritage Bank and FCMB Bank.

    Court documents showed that the Ikedi Ohakim administration in Imo State, which the Rochas Okorocha administration succeeded, had contracted E. F. Network for the implementation of the government’s Clean and Green Initiative, in pursuit of which the firm was awarded a contract to supply 10 million refuse bags and 40,000 plastic rolling containers at N42 per bag and N20 per plastic container.

    By the contract, the Imo State Governor and others, listed as appellants in the appeal, guaranteed payment though an irrevocable mandate of the payment of N35 million monthly to the contractor.

    It was found that after the execution of the contract, the state kept to the agreed schedule of payment for 12 months and subsequently stopped, leaving an outstanding balance estimated at N800 million.

    In a bid to recover its money, the firm sued at the High Court of Imo State, which gave judgment in its favour on February 11, 2014, ordering the defendants to, among others, pay the firm N1 billion, a judgment the Imo State Governor and others appealed up to the Supreme Court and lost on March 8, 2019.

    In its March 8, 2019 judgment, the Supreme Court, beside upholding the N1 billion awarded against the state, which the Court of Appeal affirmed, awarded N500,000 cost against the appellants.

  • BREAKING: Court attaches Imo’s accounts in CBN, 16 other banks over N1.5b debt

    A High Court of the Federal Capital Territory (FCT), Abuja has ordered the attachment of funds in accounts owned by the Imo State Government in the Central Bank of Nigeria (CBN) and 16 other banks in the country.

    Justice Bello Kawu, sitting in Kubwa, gave the order in a motion ex-parte for garnishee order nisi brought by a firm, E. F. Network Nigeria Limited and its promoter, Gideon Egbuchulam.

    The garnishee proceedings was predicated on a March 8, 2019 judgment of the Supreme Court, which found that the Imo State Government was indebted to E. F. Network and Egbuchulam for contracts executed for the government.

    Justice Kawu ordered that all money held by the state in its accounts with all the listed banks, should be attached for the purpose of satisfying the judgment of the Supreme Court delivered on the 8th day of March 2019 (which affirmed the concurrent judgment of the Court of Appeal and the High Court of Imo State).

    The judge gave the banks 14 days within which to show cause why the garnishee order nisi should not be made absolute in satisfaction of the judgment sum contained in the Supreme Court judgment.

    He adjourned to May 3 for the banks to show cause and for hearing on whether or not the garnishee order should be made.

    The banks listed with the CBN are Access Bank, Zenith Bank, Jaiz Bank, Union Bank, First Bank, U.B.A, Ecobank, Keystone Bank, Diamond Bank, Fidelity Bank, Polaris Bank, GTBank, Stanbic IBTC Bank, Unity Bank, Heritage Bank and FCMB Bank.

    Details shortly…

  • Emefiele woos investors, says Nigeria ready for business

    The Central Bank of Nigeria (CBN) has assured investors and the international community that the country having gone through a successful election, was ready for investments.

    The CBN Governor, Mr Godwin Emefiele, on Friday night in Washington DC, held an informal meeting with potential investors where he enticed them with the Nigerian success stories, especially in agriculture.

    Emefiele said that the Anchor Borrowers Programme, which targets local farmers was one of the major achievements of the bank under its development interventions.

    “As at December 2018, a total sum of N178.48 billion had been disbursed through 19 participating financial institutions to 902,518 farmers.

    “During the period, over 2.8 million and 8.4 million direct and indirect jobs were created under the Anchor Borrowers Programme,” he said.

    On the country’s foreign exchange policy, Emefiele said that the focus had always been to ensure price stability.

    He highlighted some of the foreign exchange reforms undertaken by the bank, which included the ban of the 41 items, the establishment of the investor’s and export’s window and the SME Window of the foreign exchange market.

    According to him, this resulted in stable exchange rate, foreign exchange liquidity, vibrancy in the capital market, improved supply of foreign exchange supply with positive impact on GDP growth.

    Emefiele said also that Nigeria, through its financial inclusion strategy had recorded a lot of progress in giving its adult population access to a broad range of formal financial services at an affordable cost.

    According to him, statistics shows that in Nigeria today, the number of adult with access to financial services has grown from 58.4 per cent in 2016 to 63.2 per cent in 2018.

    “A lot of work has been done and indeed a lot of work needs to be done but in the midst of this, we are saying that Nigeria is open for business and foreign investors.

    “As the monetary and fiscal authority continue to work tirelessly to boost our economy, it is important to portray some of Nigeria’s enduring strength which offers significant reward for current and prospective foreign investors.

    “I want you to know that irrespective of the impact of the recession, Nigeria’s economy remains the largest in Africa by the size of its GDP with diversified opportunities across different sectors.

    “These sectors include ICT, manufacturing, solid minerals, trade and agriculture,” he said.

    Emefiele assured potential investors of the safety of their investments should they choose to take a leap of faith and make a mutually beneficial investment in the country.