The Nation Newspaper

Tag: cbn

  • CBN pumps $195m into forex market

    The Central Bank of Nigeria (CBN) yesterday injected $195 million into the inter-bank Foreign Exchange Market.

    The excercise was in line with the its plan to boost forex liquidity in the market even as the naira maintains its strength.

    Figures released by the CBN show that it offered the total sum of $100 million to the Wholesale segment, while the Small and Medium Enterprises (SMEs) segment received the sum of $50 million. The invisibles segment comprising tuition, medical payments and Basic Travel Allowance (BTA) received $45 million.

    The bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, said that the intervention is in line with the CBN’s continual determination to ensure forex liquidity and satisfy legitimate demand.

    Okorafor assured that the bank will continue to intervene in the nation’s forex market in order to sustain the liquidity in the market and guarantee the international value of the Naira.

    Meanwhile, the naira exchanged at an average of N363/$1 in the bureau de change segment of the market on Monday, November 13, 2017, maintaining its stability in the forex market.

     

  • CBN sets clearing rules for banks

    CBN sets clearing rules for banks

    The Central Bank of Nigeria (CBN) has reviewed the settlement banking arrangements for banks and merchant banks.

    The CBN’s Monetary, Credit, Foreign Trade and Exchange Guideline says it can only maintain a Settlement Account for a commercial bank that provides clearing collateral of not less than N15 billion worth of treasury bills.

    The apex bank said achieving the benchmark gives a bank the right to engage in clearing and settlements operations in the country.

    In a circular to all banks and the Nigeria Interbank Settlement System (NIBSS), CBN Director, Banking and Payments System Department, ‘Dipo Fatoku, said it had become imperative for the banks to extend the settlement banking arrangement to all the clearing sessions, with effect from January 1, 2018.

    Specifically, he said the settlement of net clearing obligations from Central Securities Clearing System (CSCS), cheques, cards Automated Clearing House (ACH), NIBSS Instant Payment (NIP), National Electronic Funds Transfer (NEFT) and other clearing instruments shall be through the account of settlement banks only.

    Besides, such a Settlement Bank will have the ability to offer agency facilities to other banks and settle on their behalf, nationwide. It will equally have a branch network in all the CBN locations.

    The guidelines will be reviewed from time to time.

    It said that banks that meet the specified criteria will continue to be designated as “Settlement Banks”. This implies that non-settlement banks, called “Clearing Banks” will continue to carry out clearing operations through the settlement banks under agency arrangement.

    In the circular titled: Extension of Settlement Banking Arrangement to all Clearing Sessions’, Fatokun recalled that the CBN introduced settlement banking framework on April 1, 2014.

    “The framework categorised deposit money banks into settlement and non-settlement banks. The settlement banks settle their net settlement obligations and that of their non-settlement banks arising from cheque clearing and other instruments during sessions 1 and 2.”

    He said non-settlement banks should going forward, enter into agency agreement with settlement banks and pledge appropriate collaterals accordingly. “The aforementioned framework has been working well and contributed to the relative stability in the net settlement operations for settlement of clearing sessions 1 and 2 on the Real-time Gross Settlement System (RTGS),” he said.

    “In view of this, it has become imperative for the bank to extend the settlement banking arrangement to all the clearing sessions, with effect from January 1, 2018. Specifically, the settlement of net clearing obligations from CSCS, cheques, cards ACH, NIP, NEFT and other clearing instruments shall be through the account of settlement banks only”.

    The CBN advised settlement banks to update the agency agreements with their non-settlement banks. “Merchant banks that do not have settlement banks should appoint a settlement bank and inform the CBN on or before December 15,” it said.

  • CBN commits N44b to Anchor Borrowers’ programme

    CBN commits N44b to Anchor Borrowers’ programme

    The Central Bank of Nigeria (CBN) has committed N44.1 billion to the Anchor Borrowers’ Programme (ABP) through the 13 participating financial institutions.

    Its spokesman, Isaac Okorafor, disclosed this during the CBN Special Day at the just concluded 2017 Lagos International Trade Fair.

    He said the CBN is moving into commodity associations where over 300,000 farmers will be mobilised and about two million jobs will be created.

    Okorafor listed the CBN’s intervention schemes that have impacted positively to the economy as, Agricultural Credit Guarantee Scheme Fund (ACGSF), which has created a total of 5,045,900 jobs; N200 billion Commercial Agricultural Credit  Scheme (CACS) – 1,134,772 jobs; N200 billion Small and Medium Enterprises (SME) Restructuring and Refinancing Facility (SMERRF) – 89,860 jobs; N300 billion Power and Airline Intervention Fund (PAIF) – 7,899 direct jobs and 14,304 indirect jobs; the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) – 139,156 jobs.

    Others are Textile Sector Intervention Facility (TSIF) – 1,668 jobs; Nigeria Electricity Market Stabilisation Fund (NEMSF) – 1,180MW Capacity Recovery by Generating Companies (GENCOS) and over 414,000 units of meters procured; and Anchor Borrowers’ Programme (ABP) created 653,250 direct jobs.

    Okorafor said a total sum of N44.18 billion has been released through 13 Participating Financial Institutions (PFIs) in respect of 200,000 small holder farmers across 29 States in the country cultivating over 234,581 hectares of farmland in the ABP.

    The CBN targets 500,000 participants by end of 2017 on the ABP. He said the CBN is expanding the ABP through the direct engagement of commodity associations. “Currently we are working with the Rice Farmers Association of Nigeria (RIFAN) to mobilise 300,000 rice farmers who would add two million tons of rice to the national output in one year.

    He said the CBN is also working with the Federal Ministry Agriculture and rural development which aims at the pilot stage to create at least 10,000 jobs in each state of the federation.

    In order to provide access to finance for MSMEs, the acting director noted that the CBN has facilitated the establishment of the National Collateral Registry (NCR) to ensure that MSMEs and the millions of budding entrepreneurs across the country can use their movable assets to raise finance.

    Speaking at the trade fair, President, Lagos Chamber of Commerce and Industry (LCCI) Nike Akande, charged the CBN to pay more attention to excess bank charges in the banking sector.

  • Forex: CBN boosts forex supply with $195m

    The Central Bank of Nigeria (CBN) has intervened in the inter-bank  Foreign Exchange Market with the injection of another $195 million.

    Figures released by the bank yesterday, showed that it offered the total sum of $100 million to the Wholesale segment, while the Small and Medium Enterprises (SMEs) segment received the sum of $50 million. The invisibles segment comprising tuition, medical payments and Basic Travel Allowance (BTA) received $45 million.

    The bank’s Acting Director, Corporate Communications Department, Isaac Okorafor confirmed the figures, noting that the intervention was in line with the CBN’s commitment to continue to ensure forex liquidity and meet legitimate demand.

    Okorafor maintained that the CBN will continue to intervene in the nation’s forex market in order to sustain the liquidity in the market and guarantee the international value of the naira.

    Meanwhile, the Naira is still exchanging at an average of N360/$1 in the BDC segment of the market on Tuesday, November 7, 2017, maintaining its stability in the forex market.

  • SEC partners CBN, NIBBS to eliminate fraudulent investment outfits

    SEC partners CBN, NIBBS to eliminate fraudulent investment outfits

    The Securities and Exchange Commission ( SEC ) on Wednesday said that the commission was partnering with other regulatory bodies to get rid of fraudulent investment outfits in the Nigerian capital market to boost investors’ confidence.

    Mr Mounir Gwarzo stated this at the 2017 World Savings Day and Financial Literacy Week held in Lagos.

    Gwarzo said that the commission was working with other regulatory bodies to combat proliferation of fraudulent investment outfit in the nation’s capital market.

    Gwarzo, who was represented by Mr Henry Rowland, Director Investment Services, SEC, stated that the commission was committed to ensure zero tolerance to fraudulent activities in the market.

    “We are partnering with CBN, NIBBS, PENCOM, CSCS and other regulatory bodies to combat the negative effect of fraudulent investment outfit in the market.”

    He, however, stressed the need for prospective investors to seek the help of financial advisers while investing in the capital market to confirm those financial outfits that were registered with the commission.

    According to him, these advisers would help ascertain the true position of any investment outfit before any financial transaction can be carried out.

    On the importance of savings, he said that savings played an important role in determining the one’s future and urged students and youths to embrace savings culture.

    Mrs Oluwatoyin Sanni, the Chairperson, Financial Literacy Committee, called on investors to ensure that the companies they want to buy shares from file returns and records of their performance, profitability and dividend payment on  quarterly basis.

    “Prospective investors must check the quality of board of companies, the directors, the profile of the chairman and other corporate governance issues relating to the firm.

    “Again, check the business model of the company you want to invest in, how does the business plan work, how does the plan translate to profit.

    Look at the past, present and future of the company if the business lines, products and services is relevant in today’s world,” Sanni said.

    NAN

  • CBN seeks powers for CIBN to punish erring bankers

    CBN seeks powers for CIBN to punish erring bankers

    The Central Bank of Nigeria (CBN) wants more powers to be given to  the Chartered Institute of Bankers of Nigeria (CIBN) to de-certify bankers who engage in unethical practices.

    CBN Deputy Governor, Financial System Stability,    Joseph Nnanna, disclosed this  after the interactive session with the CIBN and the first category of the investees who were honoured at the investiture programme organised by the Institute.

    Nnanna was worried that recent incidents in Nigeria had given bankers bad name, which he desires bankers get back the good names. “Every honour is a recognition, both the honouree and to the institution. I have always had a high regards of CIBN. I had been a member of CIBN, board member for a long time. I have also been on various committees. We want the bankers get back the good names they had in the past. Unfortunately recent incidence in Nigeria has given bankers bad name but that has to stop”, Nnanna said.

    President/Chairman of Council, CIBN, Segun Ajibola, said there are 12 investees recommended by the board of fellows and approved by the governing council. “So we just had interactive session with them to familiarise ourselves, to let them know what the institute stands for, what are key initiatives, what are the areas they could be of assistance to pursue the mandate of the institute”, he said.

    Speaking further, Ajibola said they had a meeting of mind on how they can work together, collectively pursue the Institute’s mandate and lift banking and finance practice to the next level in Nigeria, and West Africa, among others.

    “We had very useful dialogue, they exchanged ideas and made very useful suggestion regarding the expectations of the institute, areas they need the institute to come in on its mandate and make contributions in banking and finance in Nigeria. The institute also dialogue with them on the expectations in the areas where they can contribute towards meeting the goals of the institute”, Ajibola said.

  • ATM charges: Report banks to us, CBN tells customers

    The Central Bank of Nigeria (CBN) has urged customers to promptly report unnecessary charges by any commercial bank especially on transactions carried out through the automated teller machine (ATM) to the apex bank.

    CBN’s Director Monetary Policy, Moses Tule, assured the apex bank has the means to sanction any bank found imposing unnecessary charges on innocent citizens.

    He however said such sanctions will follow if only the affected customers draw attention of the CBN to such frauds through formal report.

    Tule spoke in Jos while delivering a public lecture on “Monetary policy at uncertain time”.

    He said: “The CBN considered it fraud the act by commercial banks to exploit innocent customers through unnecessary charges.”

    A student of the University of Jos has asked during the question and answer session after the public lecture why the CBN is not doing anything to stop unnecessary charges by banks each time customers withdraw cash through ATM.

    The student complained he was aware charges on ATM transaction can only be done after the third withdrawals but had noticed N65 charge is often deducted from his account at first withdrawal.

  • Key CBN appointments

    Key CBN appointments

    •Much ado about Aisha

    It would appear on close scrutiny that there is really not much, after all, to the suspicions and allegations of irregularities attendant on President Muhammadu Buhari’s recent appointment of Mrs. Aisha Ahmad, a 40-year old investment banker as a Deputy Governor of the Central Bank of Nigeria (CBN), pending the confirmation of the Senate. Eyebrows had been raised in particular about the alleged elevation of Mrs. Ahmad to the position of Executive Director (Retail Services) at her previous place of employment, the Diamond Bank, barely 24 hours to her new appointment. Mrs. Ahmad’s seeming accelerated promotion at Diamond Bank, critics argued, was to enhance her qualification and suitability for the post of CBN Deputy Governor.

    This insinuation is obviously far-fetched. Nothing in the CBN Act (2007) indicates that only Executive Directors of banks are eligible for employment in the top hierarchy of the apex bank. The new Deputy-Governor designate has over 20 years local and global experience in investment and retail banking, wealth management and financial advisory. Her academic credentials, which include a Master’s degree in Finance and Management from the Cranfield School of Management, UK, and an MBA degree, Finance, from the University of Lagos, are unassailable. All that the CBN Act requires for qualification as Deputy Governor of the CBN is that appointees “shall be persons of recognised financial experience”. Mrs. Ahmad’s appointment, therefore, does not breach any law.

    However, if a new Bill to amend the CBN Act, which incidentally has scaled through the second reading in the House of Representatives, becomes law, appointments such as that of Mrs. Ahmad will become unlawful at the CBN. The proposed bill, among other provisions, states that “Managing Directors/CEOs and Executive Directors of a bank shall not be eligible to be appointed as Governors/Deputy Governors of CBN until after expiration of five years from their exit from the bank”. We unequivocally support this bill, which aims at limiting the possibility of conflict of interest between the top management of the CBN, tapped from the private sector banks, and the apex bank’s role in regulating and supervising the banks.

    Even when an appointee to the top hierarchy of the CBN is not from the private sector banks as was the case with Professor Charles Soludo from the academia, who was CBN Governor from 2004 – 2009, the candidate can still be susceptible to unhealthy influences by powerful private bank chief executives. Thus, in spite of the reforms and drastic re-capitalisation of the banks undertaken by Soludo to sanitise the sector during his tenure, he was ultimately adjudged as being too cozy with the bank CEOs, a situation that bred regulatory laxity and left the banks not necessarily less fragile and precarious than he met them despite their more solid capital base.

    Professor Soludo’s successor as CBN governor, Mallam Sanusi Lamido Sanusi (2009 – 2014), was appointed from the private sector where he was CEO of First Bank of Nigeria. Sanusi aggressively pursued a policy of fighting fraud, loans of doubtful integrity and shady insider dealings in the banking sector resulting in the CBN sacking at least five bank chief executives and bailing out the affected banks with N400 billion of public funds.

    In spite of Sanusi’s best efforts, he was dogged throughout his tenure by allegations of pursuing a hidden agenda motivated partly by personal vendetta against some of the CEOs who were once his colleagues. Without prejudice to the truth or otherwise of these insinuations, this kind of distracting encumbrance can be avoided if the proposed bill requiring bank managing directors and executive directors to be eligible for CBN top jobs only after five years of relinquishing their former positions is passed into law.

    True, the current CBN Governor, Mr. Godwin Emefiele, appointed from Zenith Bank where he was MD/CEO, has been a restrained systems man wary of rocking the boat. But the proposed new law is not about personalities. It is about strengthening the autonomy and professionalism of the apex bank.

  • Forex: CBN boosts liquidity with $195m

    The Central Bank of Nigeria (CBN) yesterday injected $195 million into the Inter-bank Foreign Exchange Market.

    Figures obtained from the bank indicate that the CBN offered $100 million to authorized dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment received the sum of $50 million.

    Those requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were allocated the sum of $45 million.

    CBN’s Acting Director in charge of Corporate Communications, Isaac Okorafor, confirmed the figures. He said the bank was confident that the level of transparency it had entrenched in the market would help the naira sustain its steady run against the dollar and other major currencies around the world.

  • Fintech Nigeria engages CBN, NSE on innovation in financial tech

    The Central Bank of Nigeria (CBN) and the Nigerian Stock Exchange (NSE) have commended the Fintech Association of Nigeria for its efforts in bridging the gap between the regulators, government and the active players in the Nigerian Fintech ecosystem.

    In a separate meeting between the members of the Governing Council of the Fintech Nigeria, led by its President, Dr. Segun Aina Director, Banking and Payment CBN, Mr. Dipo Fatokun and  the Executive Director, Market Operations and Technology NSE,  Mr. Ade Bajomo; both the CBN and NSE agreed with the justification for setting up of Fintech NGR, adding that its  establishment was long overdue for the development of FinTech ecosystem in Nigeria.

    While emphasizing the importance of Fintech Nigeria, Aina said the association would leverage its global network to bring best practices to the FinTech initiatives of the CBN thereby assisting the bank to achieve its mandate more effectively and efficiently as the association serves as the arrowhead for the coordination of the ecosystem.

    “The joint initiatives of the association (FintechNGR) and CBN is meant to drive the benefits of financial inclusion down the bottom of the pyramid,” said  Bunmi Lawson, Vice President, FintechNGR and  CEO of Accion Microfinance Bank.

    The General Secretary, FintechNGR and Associate Partner at Banwo&Ighodalo,  Isa Alade, while commending the idea behind Fintech Nigeria said: ” The association by its network of membership would serve to remove regulatory bottlenecks that stifle innovation as it bridges the gap between the innovators, government and regulators.” Speaking further, Aina said that the establishment of the association would also engender inter-agency relationship amongst regulators and the government comprising CBN, SEC, NSE, NAICOM, NDIC, amongst others.

    Olufemi Awoyemi, member, FintechNGRGovCo and founder/CEO of Proshare Ltd also emphasised the need for collaborative efforts within the ecosystem as it would unleash the massive potential in the Nigerian FinTech ecosystem, adding that the “association would serve to bridge information gaps amongst various stakeholders in the FinTech ecosystem thereby enabling access to the opportunities that abound within the space.”

    At the end of the meeting, the CBN promised to incorporate Fintech Association to presentations on FinTech regulation in Nigeria and make available the final draft to the association for inputs.

    FintechNGR will also be involved in the drive to give digital banks, otherwise known as Challenger Banks, prominence in Nigeria through fashioning out an appropriate licensing regime working with various departments of the Central Bank.

    The meeting also agreed that the CBN will formally inform the association and will be carried along with regards to the outcome of the sandbox experience initiative currently being undertaken by the Central Bank in partnership with a global foundation; an engagement for which stakeholder engagement is paramount to the CBN.

    Fatokun of the CBN said that the apex bank  through the banks and payment system department would be happy to be a part of the knowledge development and market feedback events organized by the FintechNGR and its partners starting with 2nd National Fintech Conference coming up from 24th to 26th January 2018.

    On the other hand, the NSE Executive Director, Mr. Ade Bajomo, stated that the NSE,  subject to approval of its management, sees this collaborative approach as an extension of its market data, new business development and strategic push for a more integrated securities and financial market and hence will be happy to explore opportunities the planned conference presents with a focus on sector specific sessions at the conference; and will also consider extending opportunities for the association to participate in focus group sessions on key development areas being worked on by the bourse specifically targeted at creating accessible funding modules for startups through the NSE.

    At both meetings, the association was tasked to ramp up the work in and around issues bothering on Fintech to the attention of the regulators and government with a focus on actual solutions that bring the largely informal markets into the formal/mainstream financial system, expand on the financial inclusion benchmarks and ensure that regulation promotes, rather than stifle creative solutions; all of which is better achieved through a collaborative and constructive engagement platform that delivers a comparable benchmark with global standards.

    The consistent engagement between the association, regulators and government would surely promote home made innovative finTechsolutions,which would impact positively on the economy and the society at large.