The Nation Newspaper

Tag: CBN’s

  • CBN’s monthly bailout to banks hits N1tr

    CBN’s monthly bailout to banks hits N1tr

    With banks’ high cash demand, the Central Bank of Nigeria (CBN) cumulative monthly bailout to them rose to N1.06 trillion last February from N75.39 billion the previous month. The loans consist of N154.50 billion direct Standing Lending Facility (SLF) and N905.51 billion intra-day lending facility.

    This reflects a daily average of N66.25 billion for the 16 transaction days in the month compared with a total request for N75.39 billion, with a daily average of N9.42 billion in eight transaction days last January.

    The SLF is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds are sourced from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds are used to extend credit to the private sector and pay claims on demand deposit.

    According to CBN’s Economic Report for the month, data on Deposit Money Banks’ activities indicated that total assets and liabilities of the commercial banks amounted to N28.4 trillion, showing an increase of 2.9 per cent over the level at the end of January. Funds are sourced mainly from unclassified liabilities; Central Government deposits and claims on the Central Bank. The funds were used, largely, for extension of credit to the private sector.

    Also, at N14.4 trillion, banks’ credit to the domestic economy rose by 1.7 per cent above the level in the preceding month. The development was attributed to the increase in claims on the private sector during the review month.

    Total specified liquid assets of the commercial banks stood at N5.8 trillion, representing 38.2 per cent of their total current liabilities. At that level, the liquidity ratio fell by 1.8 percentage points below the level in the preceding month and was 8.2 percentage points above the stipulated minimum ratio of 30.0 per cent.

    Available data indicated that total assets and liabilities of the discount houses stood at N135.2 billion at end February, showing a decline of 20.4 per cent below the level at end-January 2015. The development was accounted for, largely, by the 80.2 and 10.9 per cent fall in claims on banks and Federal Government. Correspondingly, the decrease in total liabilities was attributed to the 76.1 per cent and 14.0 per cent fall in borrowings and money-at-call.

    Discount houses’ investment in Federal Government securities stood at N51.98 billion and accounted for 52.7 per cent of their total deposit liabilities. Thus, investments in Federal Government Securities was 7.3 percentage points below the prescribed minimum level of 60 per cent.

    At that level, discount houses’ investments on Nigeria Treasury Bills fell by 0.8 per cent below the level at the end of the preceding month. Total borrowing and amount owed by the discount houses was N29.37 billion, while their capital and reserves amounted to N29.6 billion. This resulted in a gearing ratio of 1.8:1, compared with the stipulated maximum target of 50:1 for fiscal 2015.

    Available data indicated that interest rates rose during the review month. All other deposit rates of various maturities rose from a range of 3.57 to 10.79 per cent. The average prime lending and maximum lending rates trended upward during the review month. The spread between the weighted average term deposit and maximum lending rates declined by 0.23 percentage point to 17.08 percentage points at the end of February 2015.

    Similarly, the margin between the average savings deposit and maximum lending rates widened by 0.25 percentage point to 22.74 percentage points at the end of the review month. The weighted average inter-bank call rate rose to 12.90 per cent above 7.49 per cent in the preceding month, reflecting the liquidity condition in the inter-bank funds market.

    Provisional data indicated that the total value of money market assets outstanding in February 2015 stood at N7.8 trillion, showing an increase of 1.1 per cent, compared with the increase of 1.5 per cent at the end of the preceding month. The development was attributed, to the 46.7 and 1.6 per cent increase in Bankers’ Acceptance and Federal Government of Nigeria Bonds outstanding. Developments in the Nigerian Stock Exchange (NSE) were mixed during the review month.

    Foreign exchange inflow and outflow through the CBN in February was $1.90 billion and $4.30 billion, and resulted in a net outflow of $2.40 billion.

    Foreign exchange sales by the CBN to the authorised dealers amounted to $3.58 billion, showing an increase of 5.2 per cent above the level in the preceding month. Relative to the level in the preceding month, the average naira exchange rate against the US dollar remained the same at the Retail Dutch Auction (RDAS) segment, but depreciated at both the bureau-de-change and interbank segments of the market.

    Non-oil export receipts declined by 33.1 per cent below the level in the preceding month. The development was attributed, largely, to the significant decline in export earnings from the industrial sector.

  • ‘NIMS ‘ll promote CBN’s financial inclusion’

    The Association of Non-Bank Micro Finance Institutions of Nigeria (ANMFIN) has said the National Identity Management System (NIMS) being implemented by the National Identity Management Commission (NIMC) will provide additional fillip to the Central Bank of Nigeria’s (CBN’s) Financial Inclusion drive.

    Its Executive Secretary, Mr. Godbless Safugha, who spoke after signing a memorandum of understanding (MoU) with the agency in Abuja, on the enrolment of its members into the National Identity Database (NIDB), expressed gratitude to the NIMC for stretching its hands of collaboration and support towards its organisation, adding that NIMC’s role in driving financial inclusion at the grass root through the provision of reliable data cannot be over emphasised.

    He said: “For us at ANMFIN, we see the National Identity Management System (NIMS) project as an antidote for identity crisis management in Nigeria which will improve financial services, social safety net programmes, healthcare services and others. So we chose to partner this platform for the clear transformation it will bring to the Nigerian people.”

    Stressing the relevance of the grassroots to the success of financial inclusion in Nigeria, he said: “Today, the Central Bank of Nigeria is preaching Financial Inclusion. To successfully achieve this goal, we must be able to reach the common man at the grassroots. If those people at the grass root are not identified, it becomes difficult to make any progress in this direction.

    “But with NIMC coming on board, I am optimistic that we will achieve financial inclusion in a very short time because we can quickly identify those at the grassroots.”

    The Director-General, NIMC, Chris Onyemenam, assured ANMFIN of the agency’s support, adding that it will take advantage of the group to get to the grass root.

    “We will do our utmost best to give you that support. I think you are closer to the bankers at the grass root. Am sure we can catch the rural bankers speedily through this collaboration,” he said.

    The NIMC chief reiterated the commission’s commitment to identifying Nigerians to boost economic development. “God willing, we will continue to support efforts to uniquely identify Nigerians in a bid to fast track the prospects in the NIMS project in terms of economic development.”

    The Commission, established by Act No. 23 of 2007, has the mandate to foster the development of an identity sector, register persons covered by the Act, assign a Unique National Identification Number (NIN) and issue General Multi-Purpose Cards (GMPC) to those registered individuals, and harmonise and integrate identification databases for verification and authentication.

     

     

  • CBN’s money troubles

    CBN’s money troubles

    More money more trouble: that is a common street saying and Hardball agrees that nothing is truer except that in the case of Nigeria’s apex money shop, the Central Bank of Nigeria (CBN) this truism is a bit more nuanced than you may think. First, this is not to suggest that the CBN is swimming in cash – though it may well be considering that it is the repository of Nigeria’s treasury – we are concerned here about the endless shifts between coins, polymer and paper currency in the last five years.

    But think what you may, cynics have a different take – and they have a right to their worries – they see in the flip-flops, heavy cash movements in the name of contracts rendered both in local and foreign currency tranches. Each time we change from one form of currency to another we are doling out huge sums and in a sense that can be said to be money trouble. If CBN were the Central Bank of Niger Republic for instance, it sure would not have such large sums to play with or throw around. You may even say that CBN when confronted or ‘troubled’ by a surfeit of cash (which comes with its peculiar challenge of managing it) it thinks up currency change to reduce the wahala of managing so much liquid cash.

    Since 2006, the CBN which seems to live in a neuter world of its own where we have only to accept the report it renders to us and where transparency, accountability and oversight are abhorrent practices grants us any mode of currency it sees in its dreams. For three years from 2006, CBN experimented with the N20 denomination of the polymer note. Having found it exceptionally cost-saving, durable and anti-bacterial, the big bank set all the other small notes like the N5, N10, and N50 into the polymer wonder at a huge cost and contract procedure that was opaque as can be. CBN also entered into its usually expensive publicity blitz to sell the new polythene money and make us love and use them. In fact recall that at a point, a deadline was fixed for the final jettisoning of the paper money. Nobody had a sensible reason why we had to outlaw our money just because it was in the paper form but consequent upon that announcement, market women were upfront in rejecting the notes because they don’t want to be stuck with it. In the ensuing crisis, many ended up getting stuck with the paper money.

    Nigerians have been using the polymer currency ever since with most either not knowing the difference or not caring. If only they could find the money to spend it would not matter the nature of it. Truly the polymer money has proven to be more durable comparatively but less manageable in the peculiar Nigerian way.

    Last month, the CBN sailing on the choreographed braggadocio of its governor, Sanusi Lamido Sanusi, told us that we have to revert to paper money because it had been re-discovered that polymer is not amenable to our hot climate which makes it fade easily. It is as simple as that; no detailed comparative cost advantages, no apologies for blatant policy failure and no dire consequences to any. Once the CBN oracle has spoken to the denizens, so be it.

    In no time, contracts would be awarded (they may well have gone out) and ultimatum would be issued to we guinea pigs for the change over to paper money once again. Dear reader, is this not money trouble of an acute type? By the way, what is the value of these miserable ‘little’ notes? Whoever uses N5 anymore for any purchase? There must be a fundamental problem somewhere if only the CBN thinks.

  • CBN’s one-day cheque settlement policy begins

    CBN’s one-day cheque settlement policy begins

    THE move by the Central Bank of Nigeria (CBN) to reduce the settlement cycle of a cheque to one day has taken off, it was learnt at the weekend.

    Known as the cheque truncation system, the move is in line with the apex bank’s cashless policy and the economic policy and the current trend around the globe.

    The Nigeria InterBank Settlement Systems (NIBSS) and a financial services software provider – Precise Financial Systems (PFS), worked with the bank to achieve the breakthrough across all the 37 branches of the apex in states capital and the Federal Capital Territory (FCT), Abuja.

    Under the new regime, all cheques presented for settlement would be resolved within the stipulated date across the country.