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Tag: cbn

  • CBN: commercial banks’re sabotaging efforts on new naira notes

    The Central Bank of Nigeria (CBN) has accused commercial banks of sabotaging its efforts in replacing mutilated notes with new ones in the country.

    Its Acting Director, Communications Department, Mr Isaac Okorafor, made the allegation in Lagos yesterday in an interview.

    Okoroafor was reacting to lamentation from Nigerians on the high level of mutilated notes in the country.

    The CBN spokesperson said the apex bank was aware of the development and had taken several measures to address the rising incidence of mutilated notes in the country.

    According to him, one of the steps taken by the CBN in mopping up the mutilated notes from the system was reduction in the amount it charges banks for sorting the dirty notes for clean ones from N12,000 to N1,000 per box.

    Okorafor  lamented to the News Agency of Nigeria (NAN) that the reduction in charges for the commercial banks which lasted for three months from Jan. 2 to March 28 was to encourage them to bring back more dirty notes to CBN.

    He said the sorting charges which used to be N12,000 was later raised to N2,000 per box after the March 28 deadline when the window was closed.

    He said the opportunity was limited to lower denomination naira notes comprising N50, N20 and N10 notes.

    A cross section of Nigerians have expressed disgust over the mutilated notes in circulation, mainly smaller denomination comprising of N5, N10, N20, N50 and N100 notes.

    He said the bank had adopted another option of withdrawing the unfit notes from circulations rather than depending mainly on the commercial banks on the task.

    Okorafor said the bank had started engaging associations in various markets to encourage traders to change genuine dirty notes for new ones.

    This, he added, would not attract any cost to traders.

    “The bank has already taken the new measure to Kano, Kaduna and Abuja and also intends to bring it to the south,” he said.

     

  • CBN: election spending threatens naira stability

    The Central Bank of Nigeria (CBN) has warned that the economy faces inflation and financial stability risks over the short-to medium-term if expected huge election spending is not checked.

    CBN Deputy Governor (Corporate Services) Adamu Edward Lamtek explained in his personal statement at the last Monetary Policy  Committee  (MPC)  meeting released yesterday by the CBN that  if excess liquidity was allowed to build up, the demand for foreign exchange could shoot up in the second half of 2018 and throw the naira exchange rate out of equilibrium.

    Lamtek said: “Such an adverse scenario must be prevented through a proactive monetary  policy.  This  is  justified  by  the  reality  that  exchange  rate  stability  is critical   to the current recovery in   economic growth and the   gradual disinflation.  Added  to  this  is  that a stable exchange rate  should, in the minimum, prevent further deterioration of  foreign currency denominated assets of the banking system and improve the resilience of the industry”.

    He said these  concerns surely  called  for  a  forward-looking  and  cautious  approach  to policy. “I see the need for greater coordination of monetary and fiscal policies and     continued     engagement of critical stakeholders     to     address misinformation and  better anchor expectations,” he said.

    “In addition, I reckoned that  some of the supportive  administrative  measures  put  in  place since last year by the Bank need more time to work their way fully through the economy.  I  am  equally  persuaded  by  the  commitment of the Federal Government to the Economic Recovery and Growth Plan (ERGP), especially in the area of infrastructure development, which continues to be relevant to sustaining and deepening  growth and development of  the  country in the medium to long-term,” he said.

    He insisted that the outlook  for  domestic liquidity, based  on  expected  fiscal actions  and  election spending, is worrisome and that with an impending  Federal Government budget outlay  of over N8 trillion and deficit  of  about N2 trillion for 2018, the  short-term fiscal outlook appears expansive. “The delay in the passage of the budget could result in substantial injections in the second half of fiscal 2018 in an   attempt to meet planned commitments. The immediate effect of this, combined with the repayment of local debt by the government and election  spending  would be  a  surge  in  banking  system liquidity,” he said.

    He said Nigeria’s stock of external reserves continues to grow on account of reduced imports,  improved  inflows  from  more favourable oil  prices,  and  increased autonomous inflows through the Investors’ and Exporters’ Foreign  Exchange (I&E) Window.

    He said that confidence in the economy is building as the naira exchange rate continues to be   stable and the premium between the bureau de change  and interbank market segments  narrows.

    “The parallel market premium continues to shrink as legitimate  foreign exchange  transactions  migrate  to  the  formal market.   It does  therefore appear that the bold reforms of the Central Bank on forex  policy  and in the  foreign  exchange  market  in  2016  and  2017  are paying  off.  It  is  gratifying  that  the  benefits  of  these  reforms  have  stretched beyond the stability of the naira exchange rate,” he said.

    Continuing, he said some manufacturing outfits have  resorted  to  using  locally  available  alternatives  as  raw  materials,  just  as interest in domestic production of certain classes of food like rice and tomato products is growing. Likewise, capital market indicators have trended upward partly in response  to positive market sentiments occasioned by the gradual improvement in the macro-economy.

    “Monetary  policy  cannot,  at  the  same  time,  be  expansionary.  At 14.33 per  cent  in  February  2018,  inflation  is  still  significantly  higher  than  the Monetary Policy Committee’s preferred range of 6 –9 per cent. Second,  the  economic  recovery  we  have  seen  so  far  has  benefitted  partly from  improved  investment  inflows.  As  a  direct consequence, the country’s external  reserves’ position  has  relatively  improved, just  as  confidence  in  the economy,” he said.

    According to him, rising  yields  in  advanced  economies,  following  the  drift  towards policy  normalization  as  global  inflation  picks  up,  poses  a  significant  risk  to  in-bound  investments.  This  threat  is  mitigated  by  a  stable  naira  exchange  rate and competitive yields locally. For this purpose, we will need positive interest rates,  as  do most emerging markets  and developing economies.

    “This means that inflation needs to moderate further. Third,  there  is  still  work  to  be  done  to  fully  contain  banking  system  fragilities which increased in the wake of the stagflation in 2015 through 2016. The non-performing loans ratio  continues  to  be  in  excess  of  the  bank’s  desired  level”.

     

    “Among  other challenges,    banks    have    had    difficulty    with    their    foreign    currency denominated liabilities (loans)   as   the   exchange   rate   moved   against borrowers  as  from  2015.  Therefore,  from  a  financial  stability  standpoint,  any threat  to  the  naira  exchange  rate  stability must  be  viewed  seriously  and promptly addressed to forestall another exchange rate shock,” he advised.

  • CBN injects $210m into forex market

    The Central Bank of Nigeria (CBN) yesterday boosted the inter-bank Foreign Exchange market with another sum of $210 million.

    The apex bank offered $100 million to authorised dealers in the wholesale segment of the market. The Small and Medium Scale Enterprises (SMEs) segment got $55 million while the sum of $55 million was apportioned to invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA).

    CBN’s Acting Director, Corporate Communications Department, Isaac Okorafor, confirmed the figures and reiterated CBN’s capacity to continue to sustain the foreign exchange intervention.

    He urged authorized dealers to help sustain the confidence in the foreign exchange market by continuing to honour requests from customers with genuine needs.

    It will be recalled that the Central Bank of Nigeria last Friday, May 4, 2018 intervened in the Secondary Market Intervention Sales (SMIS) to the tune of $349.34m.

    Meanwhile, the Naira, on Tuesday, May 8, 2018, continued to maintain its stability in the FOREX market, exchanging at an average of N362/$1 in the BDC segment of the market.

    Meanwhile, traders said the currency started to weaken last week as demand piled up especially from companies seeking to repatriate dividends and investors booking profits from local assets. Importers buying goods from abroad were also exerting pressure on the naira.

    Nigeria emerged from its first recession in a quarter of a century last year but growth is still fragile. It then introduced a multiple exchange rate regime to manage dollar demand as a way to alleviate chronic shortages on the currency markets.

  • CBN: banks must repay excess charges with interest

    Banks deducting monies illegally from their  customers’ accounts for products and services, will be made to refund such monies with interest, the Central Bank of Nigeria (CBN), has said.

    Its Consumer Complaints Manager, Consumer Protection Department, Fada David, who spoke in Abuja yesterday, said the apex bank’s new stand is coming on the heels of repeated complaints from banks’ customers of excessive charges by their banks for withdrawals from Automated Teller Machine (ATM).

    David said: “The Monetary Policy Circular of the CBN , gives certain guidelines as to how much should be refunded to customers if excess charges are discovered. Part of the punitive measures is that if excess charges are discovered, they are refunded to consumers with interest.”

    He also encouraged customers to read the CBN’s Guide to Bank Charges circular to know those charges that their banks were allowed to charge and the correct amount.

    “Bank customers should consult this document to know how much they are expected to pay for services. When you go through it and in a situation where you see charges that you do not understand, you have the right to write your bank and get them to explain what the charges are,” he said.

    He added that “in a situation where it is clear that the customer was charged excessively, the customer should get them to reverse it. You have the right to know how much you are charged from operating your account and make sure that the bank only charges the specified amount,” he said.

    Also, Mr Oludamola Atanda of the Consumer Education Division, Consumer Protection Department at CBN, urged customers to demand for their monthly statement of account. This he said would help customers to monitor their accounts closely.

    Atanda noted that bank customers “have the right to demand for the right product and services. The banks cannot force you to go for a specific product or loan facility.”

     

    You have the right to choose. If they give you a product you do not like, you do not have to take it. Its important for us to understand this.

    “There is also the issue of right to privacy. My bank should not share my details with just anybody. For instance, a wife cannot come and say she wants details of her husband’s account.

    “Only by court order can an account details by revealed to a third party”.

    Atanda said at times, customers complain about certain bank products because they were not properly informed about the products.

    “If I am taking a product, my bank has the responsibility to educate me on that product.

    “If it is a savings product, a customer should know how it works, how many times to withdraw in a month, how much interest to expect and the minimum deposit on the account.

    “We are saying that you have the right to demand good service. Those are the things we want to let customers know,” he said.

    In recent times across the Federal Capital Territory (FCT), bank customers have lamented that they now dreaded making withdrawals using other banks’ ATMs because of the continued charge of N65 for every transaction.

    The customers complained that most banks within the city centre have rigged their ATMs to dispense only N10,000 or less per transaction, thus ripping off customers withdrawing more than that amount.

    The customers complained that if they had to withdraw N100,000 or more through other banks ATM, it meant they would lose so much money.

    They, however, called on the CBN and other relevant authorities to look into the matter so as to help poor Nigerians.

     

  • CBN: Nigeria spends $36.371b on fuel importation

    A whopping $36.371billion was spent on the importation of petroleum products into the country in the last five years, the Central Bank of Nigeria (CBN), has said.

    The apex bank made this disclosure yesterday in Abuja during a public hearing of the Hon. Datti Garba Muhammad- led House  adhoc Committee on the investigating of the state of the country’s  four Refineries, their Turn Around Maintenance (TAM) to date and regular/modular licensed refineries.

    Director in-Charge of Research, Mr Ganiyu Amao, who led the CBN team to the session said excessive outflow of foreign exchange (forex) impedes the ability of the bank to stabilise the naira through intervention in the forex market.

    According to him, a lot of pressure is exerted on the country’s external reserves causing the naira to depreciate.

    Also yesterday, the ad hoc committee directed the Nigerian National Petroleum Corporation (NNPC) to present necessary information on the installed capacity, volume of crude supply and output, and the TAM of the four refineries within 24 hours.

    Members of the Committee such as Wole Oke (PDP, Osun), and Kingsley Chinda (PDP, Rivers), were of the opinion that rather than the one week given by the chairman of the committee, 24hours was enough for “a highly organised Corporation like the NNPC and should be able to provide such info upon request”.

    While making his presentation, Amao said: “Data from the CBN show that from 2013 to 2017, a total of forex committed to imports in the country stood at $119.409billion, while the total forex committed to imports in the oil sector stood at $36.371billion, representing 13.5per cent of all imports made by the country.

    “It greatly exerts serious pressure on our external reserve and depreciates the value of our local currency.”

    According to him, domestic fuel consumption rose from 4.5 million metric tons (MT) to 23.9million metric tons in 2013, and dropped to 2.6million MT in 2016, adding that a policy that compels International Oil companies (IOCs) to refine at least half of the crude that they produce for domestic consumption, is favoured by the apex bank.

    Hon. Muhammad (APC, Kaduna), and members of the panel however frowned at the inability of the NNPC, to provide relevant documents the lawmakers demanded.

    The lawmakers said it was apparent some of the invited stakeholders were trying to shortchange the investigation by holding back needed and necessary documents.

    He said: “Only a few organisations and individuals have complied with the committee’s request for documents and memoranda as many are bent on frustrating the investigation to this regard.’’

  • CBN demands N15b collateral from settlement banks

    The Central Bank of Nigeria (CBN) has asked settlement banks to provide a clearing collateral of not less than N15 billion worth of treasury bills to enable them perform settlement roles.

    The directive was contained in the CBN’s Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2018/2019.

    The CBN said it would continue to categorise banks into settlement and non-settlement banks for the purpose of clearing and settlement.  Settlement banks, it said, would participate directly in the clearing houses and receive their net clearing position in their settlement account with the CBN.The non-settlement banks will receive their net clearing position through the settlement account of their settlement banks.

    “Any bank applying for direct participation as a settlement bank shall be required to possess the capacity to provide the required clearing collateral of N15 billion, subject to periodic review. It shall have the ability to offer agency facilities to other banks and to clear and settle on their behalf. It shall also have adequate branch network, in all the CBN locations,” the CBN said.

    “Banks that meet the specified criteria shall continue to be designated as “Settlement Banks.” Consequently, non-settlement banks, called “Clearing Banks” shall continue to carry out clearing operations through the settlement banks under agency arrangement. The terms of agency arrangements shall be mutually agreed between the Settlement Banks and the Clearing Banks,” the CBN said.

    The CBN said it would continue to adopt the risk-based supervision (RBS) approach in the supervision of institutions under its regulatory purview. “The objective of the RBS approach is to provide an effective process to assess the safety and soundness of banks and other financial institutions. This is achieved by evaluating their risk profile, financial condition, risk management practices and compliance with applicable laws and regulations,” it said.

    It enjoined banks to pursue profitability in their business models through efficient operations, adding that they should charge competitive rather than excessive rates of interest in the course of their transactions. The lenders are also to disclose their prime and maximum lending rates as fixed spreads over the Monetary Policy Rate.

  • China, Nigeria sign currency swap deal

    China’s Central Bank said Thursday that it has signed a currency swap agreement with its Nigerian counterpart.

    The agreement will allow the two sides to swap a total of 15 billion Chinese yuan ($2.35 billion) for N720 billion or vice versa, in the next three years, the People’s Bank of China (PBOC) said on its website.

    The move is aimed at facilitating bilateral trade and investment and promoting the financial stability of both sides, the PBOC said.

    The deal can be extended by mutual consent.

    A currency swap deal allows two institutions to exchange payments in one currency for equivalent amounts in the other to facilitate bilateral trade settlements and provide liquidity support to financial markets.

    In 2014, the Central Bank of Nigeria (CBN) former deputy governor, Kingsley Moghalu, said the bank was looking to increase the percentage of Yuan foreign reserves in its possession from two per cent to seven per cent.

    According to him, 85 per cent of its foreign reserves were in dollars and it needed to have more in Chinese Yuan, as the country was taking a more important place in global trade.

    “It was clear to us that the future of international economics and trade will shift in large part to business with and by China. Ultimately the renminbi (Yuan) is likely to become a global convertible currency,” Moghalu said.

     

     

  • CBN boosts foreign exchange market with $210m

    The Central Bank of Nigeria (CBN), on Wednesday, injected 210 million dollars into the Inter-bank Foreign Exchange Market in continuation of its efforts to sustain liquidity in the market.
    The acting Director,  Corporate Communications,  CBN,  Mr Isaac Okorafor in a statement said the apex bank offered 100 million dollars to authorised dealers in the wholesale segment of the market.
    He said that the Small and Medium Scale Enterprises (SMEs) segment received 55 million dollars, while 55 million dollars was apportioned to invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA).
     Okorafor urged Deposit Money Banks to continue to honour requests from customers with genuine needs, noting that CBN would continue to sustain liquidity in the foreign exchange market.
    Meanwhile, the nation’s currency continued to maintain stability in the foreign exchange market, exchanging at an average of N362 to a dollar at the Bureau De Change segment of the market. (NAN)

  • 31.4million customers captured in BVN, says CBN

    No fewer than 31 million customers have been captured in the Bank Verification Number (BVN), the Central Bank of Nigeria (CBN) has said.

    “As at December 2017, the implementation of the project recorded 31,426,091 registered BVNs and 43,959,282- accounts linked with BVN,’’ CBN Director in charge of Banking and Payment System, Mr. Dipo Fatokun, said in Abuja.

    His lecture titled: Nigeria’s progress towards the creation of a robust, trusted and inclusive financial services environment, was given at the annual meeting of the ID4Africa Movement.

    Fatokun said: “To address the absence of a unique identifier in the Nigerian banking industry and to facilitate the creation of inclusive financial services environment, the CBN, in collaboration with the Bankers’ Committee launched the BVN Project on February 14, 2014, with biometric solution, as a unique identifier for all bank customers.

    “The objectives include the following: increase access, convenience, service levels across the industry; enable greater financial inclusion and integration of financial services into the economy, with its attendant positive impact on economic development.”

    Fatokun said the BVN was also targeted at promoting safe and sound financial system in the country.

    The BVN, he said, had helped in the provision of a unique identity for customers that impact other areas such as credit check, and non-repudiation of transactions.

    According to him, the BVN has also helped to increase deterrent controls on financial transactions and reduce or mitigate fraud risk and identity theft.

    The CBN official said: “Most importantly, it has created avenues for people who cannot write regular signature to make financial transactions, thus facilitating financial inclusion.

    “As at December 2017, the implementation of the BVN Project recorded 31,426,091 registered BVNs and 43,959,282- accounts linked with BVN.’’

    Fatokun explained that the BVN was part of the Federal Government’s strategy towards accelerating financial inclusion in the country.

    “Nigeria launched its National Financial Inclusion Strategy in October 2012 with the goal of reducing the percentage adult Nigerians that are excluded from financial services from 46.3 per cent in 2010 to 20 per cent by 2020,’’ he said.

    Fatokun added that a number of factors were identified as barriers to financial inclusion among Nigerians.

    He said: “The identified barriers to financial inclusion include lack of income, long distance to access points, lack of knowledge about financial services, high cost of services and cumbersome requirements for account opening.

    “In order to achieve the set target, and to address the aforementioned barriers, different measures and initiatives were put in place by the CBN.

    “To address the cumbersome documentation requirement for account opening, the CBN introduced the Three-tiered Know-Your-Customer (T-KYC) in 2013, which was modified in July, 2016.

    “The three-tiered KYC guideline allows individuals who may not meet the formal identification requirements and in banks to operate and enjoy banking services within defined thresholds.

    “The simplification consists of lowering the account opening requirements and less-paper documentation in exchange for lower threshold.

    “The CBN T-KYC is one of the initiatives for improving financial inclusion in Nigeria to facilitate easy access to a broad range of formal financial services.’’

     

  • Update: Fire scare at CBN headquarters

    …No fire incident at CBN Head Office, says Spokesman

    When The Nation got to the Headquarters of the CBN on Central Business District the generator fire had been put under control by a combined team of CBN In-House fire fighters, the Julius Berger team and men of the Federal Capital Territory (FCT) Fire Service (FFS).

    The fire was said to have started at about 6pm and lasted for about 30 minutes before it was put out. The huge smoke covered a section of the CBN building up to the roof and left the security guards and other staff on duty worried and confused. 

    The Assistant Comptroller, FFS, Bello Atayin said that the fire started at the generator house and attributed the fire incident to a technical fault at the generator house.

    According to him, “the fire incident started at the generator house on the west side of the building and we were alerted. It was a minor fire incident and it had been put under control.”

    “A huge smoke billowed from a faulty generator number three at the Central Bank of Nigeria (CBN) headquarters On Tuesday which caused a fire scare. 

    Reacting to the incident, CBN’s spokesman, and Ag. Director, Corporate Communications, Isaac Okorafor described the report of the fire incident as false.

    In a statement, CBN Spokesman, Isaac Okorafor, said passersby who saw a pall of exhaust from the generator house far away from the building apparently mistook the exhaust for fire smoke.

    “The CBN maintains a total security system that triggers safety alarms in the presence of smoke and so all fire engines and personnel received the alert only to discover that it was an unusual pall of exhaust,” he said”.

    The affected generator has been rested and normal work has been uninterrupted, while the engineers are working to rectify the issues with the generator. We hereby assure the general public that there has been no fire at our building,” he added.