The Nation Newspaper

Tag: forex

  • Forex restrictions grow foreign reserves to $2.5b

    Foreign exchange reserves rose by $2.5 billion last month to hit $31.5 billion.

    Head of Markets, FBN Capital, Olubunmi Ashaolu, in a report, attributed the increased earnings to the introduction of the Central Bank of Nigeria’s (CBN’s)  forex restrictions policy.

    CBN, in a circular dated June 23,  banned 41 imported goods from forex either in the interbank market or in the bureaux de change.

    “We have heard some well-informed estimates that imports of the listed goods had accounted for 20 per cent of forex utilisation: this would amount to about $900 million per month on the basis of the CBN’s figure for utilisation (for goods and services) for first quarter 2015,” he said.

    Ashaolu said import demand had eased due to the squeezing of real incomes, adding that the Nigeria National Petroleum Corporation (NNPC) has started to transfer its forex reserves from the commercial banks to the CBN.

    “This brings us to the untested theory that the plugging of forex leakages has begun. This could also explain why the Federation Account Allocation Committee (FAAC) distribution of June revenues was higher than May’s when oil prices would have suggested the opposite,” he said.

    According to CBN regulations, forex from the markets (whether direct CBN forex sales, the interbank or the parallel markets) can no longer be used to import these items. The restricted list includes some food items, such as rice, margarine, imported palm oil, other vegetable oils, and tomato paste.

    The objective of the restrictions is to curb demand for imports, safeguard the forex reserves, which have been affected by declining oil earnings and portfolio outflows, and boost local production.

     

  • CBN directs banks to prioritise forex demand for fees, others

    CBN directs banks to prioritise forex demand for fees, others

    The Central Bank of Nigeria (CBN) has directed authorised foreign exchange dealers to give priority to customers seeking foreign currency for payment of school fees and personal allowances for overseas travels.

    The apex bank said this in a statement by the Director, Corporate Communications Department, Alhaji Muazu Ibrahim, yesterday in Abuja.

    The bank assured forex users that it would continue to meet their demand so long such demands were for legitimate purposes.

    “All legitimate requests for foreign currency for eligible transactions such as remittances for school fees, Business Travel Allowance, medical and other eligible transactions shall be fully met at the official exchange rate.

    “Already, all the legitimate demand for such transactions through recognised channels have so far been fully met by the CBN.

    “The CBN hereby directs all authorised dealers in foreign exchange in Nigeria to henceforth treat as top priority all legitimate demand for foreign exchange for eligible transactions,” it said.

    It stated also that holders of Naira denominated debit and credit cards would continue to have access to the use of their cards at Automated Teller Machines in any part of the world.

    It stated that the amount was subject to an annual limit of 50,000 dollars, noting that ATM withdrawals would continue to be at a maximum of 300 dollars per day.

  • LCCI faults CBN’s decision on forex

    LCCI faults CBN’s decision on forex

    The dust raised by the Foreign Exchange (forex) policy introduced by the Central Bank of Nigeria (CBN), which excluded 41 items from the foreign exchange market, has refused to settle. This time, the decision of the Monetary Policy Committee (MPC) of the CBN to maintain status quo on its policy stance has not gone down well with members of Lagos Chamber of Commerce and Industry (LCCI)

    The MPC had after its meeting of July 23 and 24, 2015, decided to retain the current demand management model in the foreign exchange market.

    However, after a review of the MPC’s decisions, LCCI said “this singular decision reflects an ominous indifference of the CBN to the plight of various stakeholders including manufacturers over its foreign exchange management strategy.”

    The Chamber in a statement signed by its President Remi Bello, said it shared CBN’s concern that there are no easy choices given the dwindling crude oil price, dwindling accretion to reserves, weak fiscal position of government and the pressure on foreign reserves.

    “We also share the submission of the apex bank that the Federal Government needs to unfold its economic agenda to boost investors’ confidence and reduce uncertainty in the economy.

    “We support CBN’s position that monetary policy instruments need to be complemented with fiscal policies to achieve the desired economic outcomes, as monetary policy has severe limitations in the present circumstances,” the statement said.

    The LCCI however, argued that the present model, which is essentially an administrative allocation mechanism, has profound collateral consequences for the economy – the opaqueness of the foreign exchange management, vulnerability to corrupt practices and distortions in the economy.

    LCCI noted that submissions by stakeholders in the economy to the CBN to review its list of items not valid for foreign exchange were completely ignored by the MPC, and that the matter was not even mentioned in the communiqué. “We are gravely disturbed by this disposition,” Bello said.

    Bello further expressed the chamber’s worry on the apparent trivialisation by the CBN of developments in the parallel market segment of the foreign exchange market. “It is curious that the unprecedented disparity in the rates did not seem to bother the CBN,” he added.

    He also affirmed that the widening disparity in rates has profound implications for the economy. “It is an incentive for round tripping. “It would create distortions in the economy, compromise the principle of level playing field in the economy, and make the management of the foreign exchange market vulnerable to all manner of sharp practices and corruption,” he added.

    LCCI pointed out that the large informal sector of the economy is fed largely from this segment of the market and that these are issues the CBN cannot afford to ignore.

    He observed that fuel import exerts the highest pressure on the foreign exchange market and the country’s reserves.

    While stating that the chamber expects this matter to be highlighted in the MPC communiqué, Bello called on President Muhammadu Buhari to do something urgently about these critical issues.

    He said: “The protracted problem of excess liquidity should be addressed in a manner that would not persistently cause disruptions and dislocations in the economy.  The therapy of interminable monetary tightening has really not worked.  The focus has been on tackling the symptoms, not the cause.”

    Bello advised that fixing the problem through a root cause analysis will be more helpful to the economy. “We note, for instance, that while the benchmark for Net Credit to the economy was 29.3 per cent for 2015, credit to Federal Government grew by 40 per cent as at June 2015. These are issues to worry about,” he said.

    Bello also noted that the money supply impact of monetisation of oil revenue receipts, banking system credit to government, and the various intervention funds of the CBN need to be critically examined at this time.

    According to him, the crisis of excess liquidity has done incalculable damage to the economy for many years.  “There is a strong nexus between the crisis of liquidity, rising inflation; exchange rate depreciation, weakening purchasing power and worsening poverty of citizens over the years.  It is in fact the principal reason for the paradox of poverty in the midst of plenty,” he pointed out.

    The LCCI President disagreed with CBN that the factors driving inflation at this time are transient as suggested by the MPC. Rather, he observed that the continued depreciation of the currency and the structural issues are major factors putting pressures on prices, which needs to be tackled urgently.

  • LCCI faults CBN’s decision on forex

    LCCI faults CBN’s decision on forex

    The dust raised by the Foreign Exchange (forex) policy introduced by the Central Bank of Nigeria (CBN), which excluded 41 items from the foreign exchange market, has refused to settle. This time, the decision of the Monetary Policy Committee (MPC) of the CBN to maintain status quo on its policy stance has not gone down well with members of Lagos Chamber of Commerce and Industry (LCCI)

    The MPC had after its meeting of July 23 and 24, 2015, decided to retain the current demand management model in the foreign exchange market.

    However, after a review of the MPC’s decisions, LCCI said “this singular decision reflects an ominous indifference of the CBN to the plight of various stakeholders including manufacturers over its foreign exchange management strategy.”

    The Chamber in a statement signed by its President Remi Bello, said it shared CBN’s concern that there are no easy choices given the dwindling crude oil price, dwindling accretion to reserves, weak fiscal position of government and the pressure on foreign reserves.

    “We also share the submission of the apex bank that the Federal Government needs to unfold its economic agenda to boost investors’ confidence and reduce uncertainty in the economy.

    “We support CBN’s position that monetary policy instruments need to be complemented with fiscal policies to achieve the desired economic outcomes, as monetary policy has severe limitations in the present circumstances,” the statement said.

    The LCCI however, argued that the present model, which is essentially an administrative allocation mechanism, has profound collateral consequences for the economy – the opaqueness of the foreign exchange management, vulnerability to corrupt practices and distortions in the economy.

    LCCI noted that submissions by stakeholders in the economy to the CBN to review its list of items not valid for foreign exchange were completely ignored by the MPC, and that the matter was not even mentioned in the communiqué. “We are gravely disturbed by this disposition,” Bello said.

    Bello further expressed the chamber’s worry on the apparent trivialisation by the CBN of developments in the parallel market segment of the foreign exchange market. “It is curious that the unprecedented disparity in the rates did not seem to bother the CBN,” he added.

    He also affirmed that the widening disparity in rates has profound implications for the economy. “It is an incentive for round tripping. “It would create distortions in the economy, compromise the principle of level playing field in the economy, and make the management of the foreign exchange market vulnerable to all manner of sharp practices and corruption,” he added.

    LCCI pointed out that the large informal sector of the economy is fed largely from this segment of the market and that these are issues the CBN cannot afford to ignore.

    He observed that fuel import exerts the highest pressure on the foreign exchange market and the country’s reserves.

    While stating that the chamber expects this matter to be highlighted in the MPC communiqué, Bello called on President Muhammadu Buhari to do something urgently about these critical issues.

    He said: “The protracted problem of excess liquidity should be addressed in a manner that would not persistently cause disruptions and dislocations in the economy.  The therapy of interminable monetary tightening has really not worked.  The focus has been on tackling the symptoms, not the cause.”

    Bello advised that fixing the problem through a root cause analysis will be more helpful to the economy. “We note, for instance, that while the benchmark for Net Credit to the economy was 29.3 per cent for 2015, credit to Federal Government grew by 40 per cent as at June 2015. These are issues to worry about,” he said.

    Bello also noted that the money supply impact of monetisation of oil revenue receipts, banking system credit to government, and the various intervention funds of the CBN need to be critically examined at this time.

    According to him, the crisis of excess liquidity has done incalculable damage to the economy for many years.  “There is a strong nexus between the crisis of liquidity, rising inflation; exchange rate depreciation, weakening purchasing power and worsening poverty of citizens over the years.  It is in fact the principal reason for the paradox of poverty in the midst of plenty,” he pointed out.

    The LCCI President disagreed with CBN that the factors driving inflation at this time are transient as suggested by the MPC. Rather, he observed that the continued depreciation of the currency and the structural issues are major factors putting pressures on prices, which needs to be tackled urgently.

  • Lagos Chamber of Commerce faults CBN’s decision on forex

    The dust raised by the Foreign Exchange (forex) policy introduced by the Central Bank of Nigeria (CBN), which excluded 41 items from the foreign exchange market, has refused to settle. The decision of the Monetary Policy Committee (MPC) of the CBN to maintain status quo on its policy stance has not gone down well with members of Lagos Chamber of Commerce and Industry (LCCI).

    The MPC, after its meeting of July 23 and 24, 2015, decided to retain the current demand management model in the foreign exchange market.

    After a review of the MPC’s decisions, LCCI said, “this singular decision reflects an ominous indifference of the CBN to the plight of various stakeholders including manufacturers over its foreign exchange management strategy.”

    Speaking, the Chamber’s President, Remi Bello, said it shared CBN’s concern that there are no easy choices given the dwindling crude oil price, dwindling accretion to reserves, weak fiscal position of government and the pressure on foreign reserves.

    “We also share the submission of the apex bank that the Federal Government needs to unfold its economic agenda to boost investors’ confidence and reduce uncertainty in the economy.

    “We support CBN’s position that monetary policy instruments need to be complemented with fiscal policies to achieve the desired economic outcomes, as monetary policy has severe limitations in the present circumstances,” the statement said.

    The LCCI however, argued that the present model, which is essentially an administrative allocation mechanism, has profound collateral consequences for the economy – the opaqueness of the foreign exchange management, vulnerability to corrupt practices and distortions in the economy.

    LCCI noted that submissions by stakeholders in the economy to the CBN to review its list of items not valid for foreign exchange were completely ignored by the MPC, and that the matter was not even mentioned in the communiqué. “We are gravely disturbed by this disposition,” Bello said.

    Bello also expressed the chamber’s worry on the apparent trivialisation by the CBN of developments in the parallel market segment of the foreign exchange market. ”It is curious that the unprecedented disparity in the rates did not seem to bother the CBN,” he added.

    He also affirmed that the widening disparity in rates has profound implications for the economy. ”It is an incentive for round tripping. “It would create distortions in the economy, compromise the principle of level playing field in the economy, and make the management of the foreign exchange market vulnerable to all manner of sharp practices and corruption,” he added.

    LCCI pointed out that the large informal sector of the economy is fed largely from this segment of the market and that these are issues the CBN cannot afford to ignore.

    He observed that fuel import exerts the highest pressure on the foreign exchange market and the country’s reserves.

    While stating that the chamber expects this matter to be highlighted in the MPC communiqué, Bello called on President Muhammadu Buhari to do something urgently about these critical issues.

    “The protracted problem of excess liquidity should be addressed in a manner that would not persistently cause disruptions and dislocations in the economy.  The therapy of interminable monetary tightening has really not worked.  The focus has been on tackling the symptoms, not the cause.”

    Bello advised that fixing the problem through a root cause analysis will be more helpful to the economy. “We note, for instance, that while the benchmark for Net Credit to the economy was 29.3 per cent for 2015, credit to Federal Government grew by 40 per cent as at June 2015. These are issues to worry about,” he said.

    Bello noted that the money supply impact of monetisation of oil revenue receipts, banking system credit to government, and the various intervention funds of the CBN need to be critically examined at this time.

    According to him, the crisis of excess liquidity has done incalculable damage to the economy for many years.  “There is a strong nexus between the crisis of liquidity, rising inflation; exchange rate depreciation, weakening purchasing power and worsening poverty of citizens over the years.  It is in fact the principal reason for the paradox of poverty in the midst of plenty,” he pointed out.

    The LCCI President disagreed with CBN that the factors driving inflation at this time are transient as suggested by the MPC. Rather, he observed that the continued depreciation of the currency and the structural issues are major factors putting pressures on prices, which needs to be tackled urgently.

  • Re: How not to spend forex

    SIR: Your editorial of Wednesday July 15,  How not to spend forex was spot on. At a time of financial distress such as we are, the only justification for exchange rate concession to pilgrims is if there is a high probability or historical evidence of reciprocal traffic from Israel, Palestine and Saudi Arabia, to Nigeria in significant numbers. This has never happened in our relations with these countries. We are better to use such incentives to attract tourist and pilgrim traffic from the Caribbean and the Americas who regard here as spiritual home. The foundation for under-development is spiritual and psychical dependence on another’s culture so uncritically for one’s inspiration and sense of completeness. This N160 concessional forex not only mortgages national economic interest for political expediency (bad politics), it actually reinforces the inferiority complex that is at the root of deference or enslavement to another’s culture for guidance on the matter of faith.

    Just to cite a CBN statistics, Nigeria expended N38billion or USD250million on some 100,000 government-sponsored pilgrims to holy lands in Saudi Arabia, Palestine and Israel in 2008. This is a key reason many poor African nations get poorer by choice and the rich nations get richer taking advantage of our subordinate spirituality, psyche and intellect. We need to bear in mind that an economy is a cultural construct. We have to use all of our historical, cultural, intellectual and other assets as vehicles for building and uplifting ours.

     

    • Abimbola Daniyan,

    Osogbo, Osun State.

  • How not to spend forex

    How not to spend forex

    •A monetary regime that grants pilgrims forex concessions, but denies the productive sector a similar privilege, reeks of wrong priorities

    A production concern, in urgent need to import raw materials, approached the Central Bank of Nigeria (CBN) for foreign exchange (forex) at the official exchange rate of N198.95/US $1. The apex bank balked.  It said the company should source its forex from the parallel market. As at July 14, that rate was N241/US $1.

    But a week or two later, John Kennedy-Opara and his Christian Pilgrims Commission (CPC) breezed into the Aso Villa. Without much ado, Mr. Kennedy-Opara breezed out to announce the good news to the faithful: the government had graciously pegged forex, for the next round of Christian pilgrimage to Jerusalem, at N160 to US $1!

    Moral: the Nigerian government would rather subsidise the forex needs of leisurely pilgrims than aid distressed players in the productive sector.

    It is a classic case of placing faith over work, in the priority of the state. For a country still grappling with economic basics, and in these times of acute economic angst, it certainly leaves a bitter taste in the mouth.

    Indeed, from the numbers, the conclusion is very depressing. For offering pilgrims a special rate of N160 per dollar, the government is subsidising each pilgrim to the tune of N38.95 on every dollar. If the pilgrims were to buy from the parallel market, at N241 per dollar, the subsidy would have been a whopping N81 per dollar!

    But shorn of the religious veneer, these Nigerian pilgrims are only splashing scarce forex, sorely needed at home, in a foreign economy. That boosts their host economy, but further worsens the distress at home.

    In contrast, that productive concern, which CBN left to its fate, eventually sourced forex for N230 a dollar, N32.05 above the official rate. If it had tarried for lack of cash, it would have paid higher; for, as at yesterday, the naira parity had sunk further to N241. So, the company would have been N44.05 in the hole for every dollar it bought.

    In the face of the present harsh economic realities, how does such a company stay competitive and be in a position to keep its staff and pay their salaries? Failure at both fuels further poverty and joblessness — and the culprit would have been a government that doesn’t seem to get its priorities right.

    Now, before we are misconstrued: Nigeria is officially a secular state; with no court religion. But Nigerians are religious and expressively so. Therefore, there is nothing wrong for the Nigerian state to be sensitive to the religious wellness of its citizens: Christian, Muslim, traditional religions. As a general principle, we welcome whatever the state can do to make religious practice more comfortable; and whatever consular services Nigeria can put in place to aid religious pilgrims.

    But to, in this season of economic anomie, waste scarce forex on the luxury needs of a comparative few, when the cash is sorely needed for the basic economic survival of the teeming majority, is absolutely unacceptable.

    Pilgrimage for Christians is doctrinally not mandatory. Even in Islam where it is, it is subject to affordability. So, every pilgrim, Christian or Muslim, strays into the self-actualisation zone; which suggests each can pay his or her way. So, the government should let them pay; and stop sucking scarce forex into a comparatively non-essential venture.

    That is why the Buhari Presidency should depart from the old wasteful ways, rescind this N160 a dollar concession just granted Christian pilgrims and make every pilgrim, Christian or Muslim, to buy his or her forex in the open market.

    ‘The Buhari Presidency should depart from the old wasteful ways, rescind this N160 a dollar concession just granted Christian pilgrims and make every pilgrim, Christian or Muslim, to buy his or her forex in the open market’

  • Forex: CBN mulls reopening of RDAS window

    Forex: CBN mulls reopening of RDAS window

    The Central Bank of Nigeria (CBN) is expected to reopen the Retail Dutch Auction System (RDAS) official window it shut last February as battle to save the naira and foreign exchange reserves intensifies.

    Chief Economist, Africa Global Research at Standard Chartered Bank, Razia Khan, hinted at the weekend, that the apex bank was under pressure to re-open the two-way interbank forex trading.

    In a report: “When perception is not reality” obtained by The Nation, the analyst explained that given the current perceived market shortage of dollar, a re-opening of the market is likely to see dollar-naira trade higher.

    She said the ‘negative watch’ period for the continued inclusion of Nigerian bonds in the widely tracked GBI-EM index was extended in June, to allow the new government the time to formulate policy.

    “Unless interbank determination of the forex rate is reintroduced, with a resulting improvement in forex liquidity, Nigeria risks being excluded from the GBI-EM index. Failure to re-open the FX market may deter direct investment as well. Few foreign investors are ready to commit new investment to Nigeria ahead of an forex adjustment that they believe to be imminent,” she said.

    Khan said Nigeria’s changing economic fundamentals call for a rethink of forex policy, in order to better absorb external shocks.

    “We see Nigeria’s current account surplus moving to a deficit, both in 2015 and in the years ahead. The pace of accumulation of new forex reserves will not easily support a fixed exchange rate system.

    With a fixed exchange rate, forex reserves rather than the naira bear the brunt of any external shock, hurting Nigeria’s creditworthiness, and potentially raising the cost of any external borrowing,” she predicted.

    The economist said the risk is that the longer it takes to re-open the forex market, the greater the likelihood of forex overshooting when conditions do eventually normalise.

    She said the debate over forex policy would continue to take centre-stage in this quarter, culminating in a reopening of the interbank forex market, and a likely move higher in the dollar-naira exchange rate. “The authorities, mindful of other reform priorities and the need to limit inflation, are unlikely to favour naira depreciation for its own sake. These reform priorities include a probable doubling of the rate of Value Added Tax to 10 per cent in order to boost state government revenue, as well as some form of fuel subsidy adjustment,” she said.

    The CBN had after series of measures aimed at arresting the sustained fall in naira value, announced the closure of the RDAS thereby leaving the interbank foreign exchange market as the only official foreign exchange market.

    The decision became necessary given the wide gap between the rates at the CBN official exchange market and the interbank market; a development which analysts said largely fuelled the current speculative activities in the foreign exchange market in the country.

    The RDAS or official forex window allows banks and other authorised dealers to place bids on behalf of individual clients who qualify to buy forex at the official auction.

    Unlike the Wholesale Dutch Auction System (WDAS) scrapped in September 2013 over widespread abuse, the

     

  • Knocks for CBN forex policy

    Knocks for CBN forex policy

    Businessmen have rejected the recently-announced Central Bank of Nigeria (CBN) foreign exchange (forex) policy.

    The Lagos Chamber of Commerce and Industry (LCCI) said the CBN approach to the management of the foreign exchange market, especially the directive on the exclusion of 41 products, was worrisome.

    LCCI President Remi Bello said yesterday that the directive, with its multidimensional implications, would  result in major disruptions, dislocations and panic among investors.

    He said many of the products on the list of the 41 are intermediate goods, which are critical inputs for many manufacturing firms and other critical sectors of the economy.

    “This development will put several investments at risk with implications for job losses, quality of loan assets in the banking system and the welfare of citizens,” he said.

    He listed some of the goods as iron rods, Cold Rolled sheets, wire rods, reinforcing Bars, Polypropylene granules, glass and glass ware. Construction, real estate, fabrications, housing, etc will be adversely affected, he added.

    He said: “A painstaking gap analysis to determine the domestic capacity for production vis a vis the demand should have preceded the policy decision by the CBN.

    “The list is prone to multiple definitions and discretionary interpretations by agencies and institutions responsible for implementation.

    “This discretionary interpretation would create room for corruption.”

    Yusuf said the alternative forex markets or the parallel market and the Bureaux de Change (BDCs) are not deep enough to meet the demand of the essential intermediate products on the exclusion list. Bello said the exclusion of the items from the forex market is as good as import prohibition.

    He alleged that the policy measure would lead to the widening of exchange differentials between the interbank markets and the parallel markets. The immediate consequence, he argued would be rampant round tripping of foreign exchange, which the CBN has limited capacity to curb.

    The LCCI boss said the CBN approach to forex allocation “appears administrative in nature, a system prone to abuse and considerable corruption. It could only be likened to the import licensing era of the early eighties,” he said.

    He added that the policy has far reaching implications for investors in fabrication, construction and real estate sectors.

    On the way forward, Bello suggested putting the policy on hold pending a proper study of the demand and supply gaps in the various sectors affected by this policy.

    He urged the CBN to focus more on the market fundamentals and as much as possible allow market mechanism to drive the allocation of foreign exchange. The closer the rate is to equilibrium, the better for the economy and less disruptive for investors, he said.

  • BVN cuts forex to $50,000

    The Bank Verification Number (BVN) initiative, when fully implemented, will help to curb arbitrage in the foreign exchange (FOREX) market and reduce the spending limit on the use of the naira denominated debit cards for transactions abroad, from $150,000 to $50,000 per person yearly. The daily cash withdrawal limit on the card was also fixed at $300 per person.

    Sterling Bank’s Executive Director Abubakar Suleiman, who disclosed this at an interactive session with reporters in Lagos, explained that with the BVN, each bank customer will have a unique identification, which will make it easy to prevent people from flouting the Central Bank of Nigeria (CBN)’s policy on the use of naira-denominated debit cards for transactions abroad.

    According to the Managing Director/Chief Executive Officer, Union Bank of Nigeria Plc, Mr. Emeka Emuwa, the decision was taken because of some cases of card abuse abroad which impacted exchange rate stability.

    The Union Bank boss had explained: “We did find that in a number of cases people were using the cards in a manner that they were not expected to use them and there have been cases of arbitrage. So, in order, to sustain stability, what was agreed by the committee was that the limit for the use of the naira debit cards would be reduced.”

    However, industry watchers argued that bank customers could attempt to circumvent this policy by opening several bank accounts and using the naira debit cards they will be given to make withdrawals above the limit.

    But, according to Suleiman, this will not be feasible when the BVN initiative is fully implemented, as each bank customer will have a BVN that will give him/her a unique identity that will be known to every player in the financial sector. Thus, when such a customer has reached the limit of his naira debit card spending abroad, he will not be able to use another card as the system will immediately recognise him.

    The BVN, which is an initiative of the CBN and the Bankers’ Committee, was launched on February 14, last year.  It is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity. This will allow banks access to more reliable information that could inform decisions on customer loan and credit applications and other complex transactions.

    The initiative is expected to boost financial inclusion as those who have typically stayed away from mainstream banking due to low literacy levels will be able to open and access their bank accounts using their biometric information rather than traditional identification methods.

    To encourage enrolment for the BVN, the CBN had directed banks to  honour only transactions over N100 million from customers with BVN from March 2015. Such transactions,  the Central Bank said, include but not limited to, money transfers, loans, and contingencies.

    The CBN also urged bank customers to register for their BVN by this month, warning that any customer without a BVN would be deemed to have inadequate Know-Your-Customers by that date.

    The Managing Director, Nigeria Interbank Settlement System Plc (NIBSS), Mr. Ade Shonubi, said customers who have done the mandatory biometric registration at any bank branch would soon start collecting their BVN cards as the cards were already with the banks awaiting collection by customers.

    Shonubi said bank customers would not be charged for the cards.

    The NIBSS boss said: “We are giving the BVN cards out for free. The cost is borne by the Bankers’ Committee, which considers the whole biometric project very important. They have been bearing the cost; the cost of the cards, cost of almost everything else that has to do with the BVN.

    “I have got my BVN card. I would encourage bank customers to talk to their banks as well. They have been printing them and sending them to the banks to distribute to the branches where you have enrolled, you would be sent an SMS. For those that have given email address, it would be sent to their emails.”

    Indeed, investigations reveal that some banks have started giving the cards to their customers.