Just In: CBN reinstates 9 banks suspended from forex market

The Central Bank of Nigeria ( CBN ) has reinstated the nine banks that were recently suspended from the foreign exchange market. They were suspended last week for failing to remit about$ 2.3 billion funds of the Nigerian National Petroleum Corporation (NNPC) to the Treasury Single Account (TSA) of the federal government.

Econmic Woes: CBN reserves fall to $19bn as non-oil exports drop by 43%

The Central Bank of Nigeria’s portion of the foreign reserves fell to $19.44 billion as non-oil exports fell by over 43 percent in the second quarter of 2016.

“Provisional data showed that total non-oil export earnings, at US$576.97 million, fell by 43.2 per cent, below the level in the preceding quarter,” CBN said in its second quarter economic report.

FG To Commence Probe Of Sanusi, Solodu Tenures As CBN Governors

A probe of the Central Bank of Nigeria, CBN, from 2007 to 2014 may be underway if the push by some forces within the government sails through, sources close to the administration have said.

The probe, if the authorities finally put a seal on it, would investigate the printing of naira notes under the watch of Professor Chukwumah Soludo and the management of CBN’s “surplus” finances under the watch of the incumbent Emir of Kano, Alhaji Muhammadu Sanusi.

Naira sells at N321 to dollar at parallel market, N197 at CBN

The Naira on Monday continued to exchange at N321 to the Dollar at the parallel market. The News Agency of Nigeria (NAN) reports that the nation’s currency has maintained this value since April 1.

The Naira, however, slide against the Pound Sterling and Euro as it traded for N445 and 355 respectively, from N457 and N357 it traded last week.

Meanwhile, the Naira also sold for N197 to the Dollar at the official inter-bank rate.

Traders at the foreign exchange market said that activities at the market had yet to rebound after the weekend break. (NAN)

CBN To Withdraw N1trn From Circulation

The Central Bank of Nigeria (CBN) has disclosed it readiness to pull out up to N1 trillion from circulation in a bid to stabilise the economy.

Already, N525 billion has been pulled out less than one week after the policy which seeks to tighten money supply, while additional N219 billion is slated to be pulled out next week

Banks’ treasury executives said they are preparing their treasury plans for more mop ups of about N300 billion.

The Central Bank Monetary Policy Rate was increased to 12 per cent from 11 per cent while Cash Reserve Requirement was hiked to 22.5 per cent from 20 per cent at its last meeting.

Meanwhile, the International Monetary Fund (IMF) said that it has again cut its growth forecast for Nigeria as the oil exporter faces substantial challenges from low crude prices.

In its annual review of Nigeria’s economic situation, the IMF said that gross domestic product growth will slow to 2.3 per cent in 2016 from an estimated 2.7 per cent in 2015.

It added that Nigeria’s general government deficit will grow further after doubling to 3.7 per cent of Gross Domestic Product (GDP) last year.

The IMF executive board said Nigeria needed to urgently implement policies to safeguard fiscal sustainability, reduce external imbalances and advance structural reforms that promote more inclusive growth.

http://www.leadership.ng/

Naira strengthens slightly against the dollar

The fluctuating rate of the naira against the dollar continued this week as the Nigerian currency began the same way it ended last week (N325/dollar). But since the real business began, there have been slight improvements on the price of the naira against the dollar on the black market as it has remained steady since Monday, March 21.

NAIJ.com’s findings from the Bureau De Change (BDC) operators revealed that although the exchange rate has not improved so much from what was obtainable before now, their customers have not stopped patronizing them for foreign exchange purposes. 

The operator who pleaded anonymity, informed that although the pace of the patronage has reduced, “they still come here to exchange money and for two days now, it has been N324 to one dollar.” Speaking also on the state of the economy, the operator stated that they are not sure of any improvement, but remain optimistic with the recent trends of currency fluctuation.

“We just hope for the best in the coming days since the naira has gathered a little momentum against the dollar in the past two-three days,” he noted.

Mrs Giwa, who made the call at an international conference where she was spotted by journalists, said: “It is believed that an increased collaboration between the various diaspora organizations and the formal sectors of government (especially the financial sector) will result in increased foreign exchange inflow from Nigerian diaspora into the country.”

naij.com

IMF visit: CBN may devalue Naira to N250 to a Dollar – Economist

Financial authorities are facing growing pressure to devalue the naira as the price of oil, its biggest source of foreign exchange, trades at the lowest level since 2004.

The Central Bank of Nigeria (CBN) may revise its target for the naira by about 20 per cent to N240 to N250 per dollar as oil continues its decline, Alan Cameron, London-based economist at Exotix Partners LLP, said in a research note.

The currency was little changed at N199.29 per dollar yesterday in Lagos, the commercial capital.

“Cumbersome foreign-exchange restrictions are strangling economic growth,’’ John Ashbourne, London-based Africa economist at Capital Economics, said in note to clients on Wednesday.

“The authorities will be forced to devalue the naira in the first half of 2016.”

Africa’s biggest economy needs more flexibility in setting monetary policy so it can use its foreign-currency reserves to support the poor population, International Monetary Fund managing director Christine Lagarde told Nigerian President Muhammadu Buhari on Tuesday.

The central bank has held the naira at N197 to N199 per dollar since March as Governor Godwin Emefiele introduced trading curbs to conserve reserves and stem a rout after it fell to a record N206.32 in February.

Nigeria, with more than 170 million people, is struggling to cope with crude prices that have fallen almost 70 per cent since their peak in June last year to below $40 a barrel.

Brent crude for February delivery tumbled 3.4 per cent to $33.07 by 7:15 a.m. in London.

“The need for a devaluation of the naira has been obvious for some time, all the more so after the latest drop in oil prices,” Cameron said.

Oil accounts for two-thirds of government revenue and almost all exports. The slump is weighing on growth, which is forecast to slow to 3.2 per cent this year, the slowest pace this century, according to a Bloomberg survey of economists.

FOREX RESTRICTION: 99% businesses may die by March, if

Chairman of Zinox Group of companies, Mr Leo-Stan Ekeh, yesterday advised President Muhammadu Buhari to urgently engage the private sector to ease the stifling economic situation in the country.

Ekeh while addressing a cross section of newsmen in Lagos yesterday said that Nigerian businessmen are going through harrowing times to sustain their businesses now due to the forex restrictions imposed by the present administration, adding that perhaps less than one per cent of Nigerian businessmen will still be standing if current realities remain till March this year.

He lamented that not being able to source adequate foreign exchange to transact business has made a lot of businesses lose credibility in international market and if that continues the entire economy may shut down.

However, he also expressed optimism that the Nigerian economy can never shut down totally but warned that “the shocks and gaps in the economy at the moment represent our current realities and we must find creative ways to navigate this harsh economic climate. The unprecedented fall in the price of crude oil is a global phenomenon which even the smartest economist couldn’t have predicted. The only regret is that successive governments failed to save for the present rainy day we are experiencing when prices were at their peak.

“Having said that, we must always look forward. I sincerely believe that the current administration has the requisite political will and capacity to see the country through this storm and the new mindset of Nigerians to get things done properly also helps.

“I also believe that the organized private sector holds the key to a way out of the present quagmire. As a matter of urgency, President Buhari should engage the private sector to save Nigeria. The three levels of the sector drives over 80 per cent of Nigeria’s economy and certainly, we can only move forward when the government carries them along.

“Recall that in the run-up to last year’s elections, President Buhari met with representatives of the private sector in Lagos to present his party’s economic plans. This and other engagements certainly went a long way in contributing to his victory at the polls.It is my considered opinion that the time is right for the President to enlist the support of the sector in finding a way out of the current economic challenges,” he added.

Credit: Vangurd

CBN may devalue Naira next year

There are indications that the Central Bank of Nigeria (CBN) may devalue the naira next year after President Muhammadu Buhari hinted for the first time that he would accept a devaluation of the naira, spurring speculation it may take place early next year when the local market reopens for trading.

The Central Bank of Nigeria(CBN) is fine-tuning the management of foreign exchange and would introduce some flexibility that would encourage additional inflows, Buhari told lawmakers in Abuja, on Tuesday as he presented the country’s 2016 budget.

“I am aware of the problems many Nigerians currently have in accessing foreign exchange for their various purposes,” the president said.

“These are clearly due to the current inadequacies in the supply of foreign exchange. We are carefully assessing our exchange-rate regime, keeping in mind our willingness to attract foreign investors, but at the same time managing and controlling inflation to a level that won’t harm average Nigerians.

“To the investors, business owners and industrialists, we are aware of your pain,” Buhari said. “To the farmers, traders and entrepreneurs, we also hear you. The status quo cannot continue.”

The currency of Africa’s biggest oil producer and economy has been all but fixed at N197-N199 per dollar since early March, with the central bank governor, Godwin Emefiele, curbing foreign-exchange trading and introducing import controls after the naira fell to a record low as crude prices plunged.

That’s caused investors including Aberdeen Asset Management Plc and Morgan Stanley to sell naira bonds and stocks in anticipation of a devaluation, which would cause losses on their holdings, and hindered the country’s growth.

The president’s change of tone means a devaluation and loosening of currency-trading restrictions may take place about January 4, when the central bank reopens the interbank market, which has been shut since Dec. 18 for the Christmas holidays, according to Razia Khan, the London-based head of Africa research at Standard Chartered Plc, which predicts the naira will weaken to N220 per dollar in the first quarter and N228 by the end of 2016.

“There’s recognition that the current system isn’t working and they need to move to something better,” Khan said by phone.

CBN saves $300m from BDC’s demand for BVN

Following the requirement of the Central Bank of Nigeria that all transactions by any Bureau De Change (BDC) in the country must be accompanied by the Bank Verification Number (BVN) of the customer, Nigeria has been able to save up to $300 million.

According to the governor of the CBN, Godwin Emefiele, the requirement of BVN for transactions has cut down the number of BDCs that request for forex transaction thereby cutting down foreign exchange savings by $100 million every week.

The CBN had last month, directed that BDCs request and verify the BVN of their customers before any transaction is consummated.

The directive which took off November 1, 2015 also stated that details of the transactions be included in the BDCs report to the apex bank.

With a weekly savings of $100 million, the CBN policy has seen a foreign exchange savings of $300 million for the past three weeks that the policy had been in place.

Speaking at the 49th Annual Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos at the weekend, Emefiele said the BVN policy had chased out fraudulent BDCs from the system.

“We have seen the number of BDC operators who purchase forex from the central bank every week drop from an average of about 2,886 to just below 1,200 BDCs, thereby giving the CBN forex savings of almost $100 million per week. This policy seems to have chased away unscrupulous BDC operators and allow only genuine operators to remain in the market” he said.

Noting that while “it may be too soon to completely adjudicate on the merits of our policies, preliminary signs indicates that we are headed to the right direction as a people”, Emefiele said through its various policies, the CBN has “managed to attain stability in the exchange rate at about N197/$1 since February 2015, although some are not happy with us for that action. Most speculators and rent-seekers have been eliminated from the forex market.

“Domestic production of excluded items such as tomato paste, rice, fish, aluminum items, and others are picking up gradually. Despite the sharp drop in inflows, our forex reserves are still at about $30 billion which is enough to cover about six months of Nigeria’s imports as against the traditional benchmark of three months.

Calling for understanding in the of pains, Emefiele said “this is an opportunity for us to look inwards, diversify our economy away from oil, produce locally and create jobs for our unemployed youths.

“We definitely cannot survive as a people by importing everything and anything. We are a resilient and hardworking people and I am confident that out of these difficulties would come out the best ideas. I am assured that better days are around the corner and we just cannot lose faith. This is the time to display our resilience as a nation and we must all put our hands on the deck to ensure a better economy for Nigeria.”

CBN upgrades Wema banking licence

The Central Bank of Nigeria has granted Wema Bank Plc a commercial banking licence with national authorization.

In a letter of notification signed by the bank’s Chief Finance Officer, Tunde Mabawoku, and the Company Secretary/Legal Adviser, Oluwole Ajimisinmi, and sent to the Nigerian Stock Exchange yesterday, the bank noted that the upgrade of the licence from a commercial banking with regional authorisation to national authorisation was conveyed in a CBN letter dated November 17, 2015.

Wema Bank Plc, a financial institution reputed as the longest surviving and most resilient indigenous Nigerian bank, was one of the banks forced to recapitalise its operations by CBN) in the wake of a financial crisis that hit the globe.

CBN had asked lenders to choose whether to operate as regional, national or international lenders with minimum capital requirements ranging from N15 billion for regional banks to N100 billion for international lenders.

Wema decided to meet tougher requirements by scaling down its business to become a regional bank to comply with a CBN policy introduced as part of measures to improve governance in the industry.

CBN unveils guidelines on international mobile money remittance

Following its approval of the inclusion of mobile money as part of international money transfer services in the country, the Central Bank of Nigeria (CBN) has unveiled the “Guidelines on International Mobile Money Remittance Service (IMMRS) in Nigeria”.

The CBN, however, emphasised in a document posted on its website yesterday that the guidelines restrict users and operators of mobile payments services to local currency transactions within Nigeria. 

It further stated that existing CBN guidelines on international money transfer services in the country do not cover money remittances via mobile applications.

The apex bank explained that permissible activities of International Mobile Money Remittance Service (IMMRS) consist of allowable inbound and outbound transactions.

According to the guidelines, transactions under inbound remittances, “Shall be limited to the receipt of monies transmitted via mobile phones and other hand held devices to persons resident in Nigeria and foreign visitors” while transactions under outbound remittances include, “outbound Person-to-Person money remittances from Nigeria towards family maintenance.”

The regulator, however, added that, “To safeguard against circumventing the statutory reporting threshold, the mobile money remittance service shall target individual customers only.”

In addition, the CBN stated that to be qualified to apply and obtain a valid approval for operating IMMRS in the country, a firm must be a registered entity, licensed in its home country to carry on money transfer activities.

Furthermore, the guidelines stated that such firms must, “Have a minimum net worth of US$1billion, as per the latest audited financial statement, or as may be determined by the CBN from time to time; hold a valid Mobile Money Operator’s license (and) should be well established (operate in at least twenty countries with at least 10 years experience) in the money transfer business, with a track record of operations.”

Also, according to the CBN for such firms to be allowed to operate in Nigeria, they must be in partnership with at least an authorised dealer bank licensed in the country and have a Memorandum Of Understanding (MOU) “ that clearly delineates liabilities in the event of disputes and/or process failures.”

Remit to TSA or face sanctions – CBN warns PMIs, DFIs

Having sanctioned three deposit money banks for non compliance with the directive to remit all public sector funds into the Treasury Single Account (TSA), the Central Bank of Nigeria (CBN) has directed all primary mortgage institutions and development finance institutions to comply immediately or face similar fate.

The CBN, in a circular dated November 12, 2015, and made available on its website yesterday, noted that the initial directive included all Primary Mortgage Institutions (PMIs) and Development Finance Institutions (DFIs). It, however, did not specify if microfinance institutions were to also comply.

The circular signed by the CBN director, Ahmad Abdullahi, and directed to all chairmen, managing directors, non executive directors, top management staff, all operators and external auditors, PMIs, and DFIs, noted that they were supposed to have complied with the September 15 deadline given by the federal government.

Consequently, it noted that in the event that any PMI or DFI still has deposits of the federal government, MDAS or parastatals, such deposits should be transferred to the TSA held by the CBN with immediate effect, “failing which severe penalties would be imposed for non compliance.”

The CBN had recently fined Skye Bank N4 billion for holding onto NNPC funds running into N40 billion long after the September 15 deadline.

It had earlier slammed a N1.87 billion and N2.94 billion on First Bank Nigeria Limited and United Bank for Africa respectively.

Meanwhile, a total of N836.714 billion has been paid into the TSA by 20 banks as at October 27 with Zenith Bank, UBA and First Bank accounting for 61 per cent of the entire transfers for all the banks.

Stanbic IBTC sanctions: CBN acted in bad faith – Financial Reporting Council

The Financial Reporting Council of Nigeria has responded to the letter by the Central Bank of Nigeria which claimed the regulatory council lacked the authority to order the suspension of Stanbic IBTC and its directors.

The Executive Secretary of the council, Jim Obaze, said in a letter dated November 10, 2015 with reference No. FRC/2015/DIM/Regulatory/002, that despite the intervention of the presidency in the matter, the CBN has refused to keep agreements.

Copies of the letter were sent to the National Office for Technology Acquisition and Promotion, Securities and Exchange Commission, and the Ministry of Industry Trade and Investment.

Following the meeting with the Chief Of Staff to the President, Abba Kyari, the FRC said it was agreed that CBN should write to Stanbic IBTC directing it to immediately stop all negative publicity against the council. The council was in turn asked to desist from similar media publications.

Besides, the CBN was directed to visit Stanbic IBTC to review the records to establish whether the errors were as a result of oversight, incompetence or compromise, while FRC should secure written positions on the matter from external auditors of the bank.

Although the FRC said it had since written to KPMG professional services, to send within seven working days the relevant documents as advised by the COS, the CBN was yet to comply.

“CBN actions are calculated to embarrass the Council and the Federal Government,” the FRC said. He accused the CBN of mixing up issues and ending up with a very “wrong and hasty conclusions”.

The council said the CBN did not have the competence, nor the authority to evaluate the FRC Act, adding that the process of inspection of the FRC, should be left for the office of Attorney General of the Federation and Minister of Justice or a court of competent jurisdiction.

The Council listed a series of procedural infractions committed by the regulator – rather than the bank – and dismissing all allegations of “financial misstatements” brought against the bank.”

FRC accused the CBN of not acting in good faith over the matter, by harmonising their positions on the review of the financial Statements of Stanbic IBTC for the year ended December 31, 2013 and 2014.

“The Council asked that the CBN should equally be sanctioned if it was discovered that the observed errors in the financial statements were true since the CBN approved the said financial statements before they were issued,” the statement said.

Mr. Obazee said the “Purchase and Assignment of Banking Application software” request made by (NOTAP) by Stanbic IBTC on July 3, 2013 was another transaction other than the one the CBN addressed.

He denied that Stanbic IBTC actually obtained the necessary approval for the software at the NOTAP, referring to alter that stated that the request was not approved.

“The transfer/reclassification of computer software in 2012 of N1.367 billion was not properly accounted for in the financial statements,” he disclosed, pointing out that the “inconsistencies and poor disclosures made the financial statements esoteric and incomprehensible, even to financial literate users.”

Apart from directing the two financial regulatory bodies in the country to ensure the problem was corrected and a consensus reached before the years ended 31st December, 2013 and 2014 respectively, the presidency had directed that they found the way to resolve the issue.

The Council sought an independent opinion of the financial reporting matter from the Institute of Chartered accountants of Nigerian (ICAN) and the Association of National Accountants of Nigeria (ANAN) to enable the CBN reach an informed decision.

The CBN Director of Communications, Ibrahim Mua’zu, said the bank was not in a position to comment any further on the issue for now, since the public had faulted FRC decision that it could not be the accused and the judge in the case.

CBN Denies N25bn Fraud In TSA Implementation

The Central Bank of Nigeria (CBN) has defended the implementation of the Treasury Single Account (TSA) and dismissed allegations that Nigeria lost N25 billion to its implementation.

Its clarification came against the backdrop of Wednesday’s decision by the Senate that the CBN and the Federal Ministry of Finance should suspend the implementation of TSA to enable it probe the allegation of N25 billion fraud allegedly as-sociated with the firm, Systemspecs, owner of Remita software, handling the implementation.

CBN’s Director of Corporate Communications, Mallam Ibrahim Mu’azu, in an interview expressed shock that the exercise, which was transparently conducted, could be tagged as fraud.

“All the allegations are not true and there is no fraud in any form associated with the TSA implementation,” Mu’azu said yesterday in a telephone interview.

However, he could not provide the figure the firm collected as commission for the exercise. Investigation showed that Remita is not a firm as claimed by the senators, but a software product of SystemSpecs Solution Limited. 

SystemSpecs is said to have emerged the preferred system solution firm handling government’s fund remittances in 2012 when its bid was rated ahead of other firms.

The firm, which has been involved in revenue remittances to government coffer using its software solution platform, was engaged in TSA mop up in banks and remittances to the CBN with its software – REMITA. SystemSpecs Limited is a company founded in 1991 as provider of epayment, financial, and human capital software solutions.

It has former Chairman of Cadbury Plc, Dr. Christopher Kolade, as its board chairman and former Vice Chairman, Nigerian Communications Commission (NCC), Mr. Ernest Ndukwe, as board member.

The Chief Executive Officer is Mr. John Obaro. A top official of the firm said that contrary to the N25 billion being bandied as cost of TSA collection, the amount involved is about N8 billion being one per cent cost of TSA mop-up and remittances to CBN.

The N8 billion, according to sources, is to be shared among System- Specs, CBN, banks and the Office of the Accountant General of Federation (OAGF). It was learnt that the N8 billion collected as one per cent of the cost of TSA mop-up was returned to CBN coffers last month. We could not confirm the return of the amount yesterday from CBN.

The SystemSpecs officer, who spoke in confidence because of the sensitive nature of the subject matter, said TSA implementation did not cost the Federal Government a dime.

“The Federal Government didn’t pay us a dime for TSA. But all parties involved, the CBN, banks, SystemSpecs and OAGF agreed on one per cent as transaction charges.

Both CBN and OAGF communicated this decision to us. It was equally agreed that ours is 50 per cent of the one per cent of transaction charges while banks take 40 per cent and CBN is 10 per cent.

“The one per cent we charged applied to normal collection of revenue for government, but when we are now enlisted to use our software platform, Remita, to mop up TSA funds from banks to the CBN, we discovered that one per cent, as cost of mopping the funds to CBN could be much.

When the funds started accruing and it had accrued to N8 billion, the CBN wrote us last month to stop charging percentage and we returned the money to CBN,” the source said.

He said during the implementation of TSA and mopping of funds by the company, agencies such as NCC, Nigeria Ports Authority (NPA) and others with fat balances in banks whose one per cent cost of collection were deducted, increased the cost of collection to N8 billion.

-newtelegraph

See how BVN Could End ATM Frauds

A financial expert, Prince Oyeyinka Oyekola, has commended the Central Bank of Nigeria for the introduction of the Biometric Verification of Number (BVN) by account holders in all commercial banks in the country.

Speaking against the background of suffering by bank account holders who have not completed the BVN process, Oyekola said the exercise is a worthwhile in the long run.

Millions of bank account holders who could not meet the October 2015 ending deadline for BVN have been running into problems. Accounts were blocked by commercial banks leading to long queue at ATM centres and banking halls.

However, Oyekola told our correspondent in Lagos on Wednesday that bank customers stand to benefit from the exercise because it will stamp out a lot of frauds that have been prevalent especially in use of Automatic Teller machine (ATM) cards.

He explained: “Now, no other person can pick your ATM card and cash your money. Since the BVN machine has captured the account holder’s ten fingers. You cannot even tell anyone your pin so that he or she can use your ATM card. It’s impossible since you have two different finger prints.” 

As at the time of filing this report, account holders who have not registered their BVN are still in a dilemma. Reports however say that registration had been extended in some areas.

Bond yields fall sharply as CBN eases liquidity

Yields on Nigeria’s bonds fell sharply across maturities on Tuesday as liquidity surged on the interbank money market, traders said, adding that the Central Bank of Nigeria (CBN) had loosened monetary policy to spur credit growth.

Nigeria’s 2017 bond fell the most, down 110 basis point to 6.9 per cent, a level last seen more than five years ago, a report by Reuters showed. The 10-year benchmark bond shed 72 basis point to 10.25 per cent. Overnight lending rates traded between 0.5 and 1 percent on Tuesday as banks’ balance on the interbank market stood at a credit of N850 billion.

THISDAY had reported that the CBN’s decision to suspend its open market operations (OMO), a monetary policy tool it had been using to periodically mop-up liquidity in the system has since increased the volume of liquidity in the system.

Essentially, the CBN has been in easing mode from a quantitative perspective as it has been increasing the quantity of money in the system, while keeping the cost of money (the monetary policy rate) constant.

With that, the volume of cash in the banking system has since increased .The move, according to analysts was to make banks reduce their lending rates and also increase lending to critical sectors of the economy so as to stimulate growth and expand the economy. But while deposit rate has remained as low as about five per cent, lending rate being charged by banks is still high, currently between the band of  21 and 25 per cent.

“Interest rates across the money market and the government debt market have fallen precipitously over recent weeks. The driver is easily identified – a surge of liquidity resulting from the CBN’s decision to not roll-over open market operation securities that have matured over recent week,” analysts at City Stockbrokers Limited stated in a recent report.

However, a former Executive Director of Diamond Bank Plc, Mr. Abdulrahman Yinusa, explained in a chat with THISDAY that beyond efforts by the central bank to spur lending, there are other variables affecting lending rates in the country. These he listed to also include the operating cost and risk premium.

Yinusa said further: “The rate a bank charges on loans beyond paying for the cost of fund is operating cost. In Nigeria, operating cost has not changed. All the banks are still running on generators and there are other infrastructural challenges. Yes, the NIBOR rate has reduced as a result of the intervention by the central bank, but has operating cost reduced?

“Another reason why lending rate is still high is because of the risk-return premium. If a bank is lending to a multinational and well-structured firm, it may choose to charge maybe one or two percent risk premium.

“But if it is giving loan to a Nigerian company, the percentage would be far higher. In Nigeria today, the risk environment has even worsened. We have to address a lot of fiscal issues in the country. As I speak, we are just about to get a finance minister. So, this is not something that the central bank can do alone. The CBN can only address the monetary aspect, but we still have fiscal issues to tackle.”

[ThisDay]

CBN: BVN enrollment to continue in banks

The Central Bank of Nigeria (CBN) on Tuesday clarified that though the deadline for enrollment of the customer Bank Verification Number (BVN) elapsed on October 31, the exercise would nevertheless continue.

CBN Director, Corporate Communications, Alhaji Ibrahim Mu’azu, said though the time frame given for the enrollment had lapsed, customers who are yet to be registered could still do so in order to remove the restrictions on their accounts.

He therefore advised the customers to insist on being registered by their banks, stressing: “The deadline of October 31, 2015 does not in any way suggest an end to the registration.”

The clarification from the apex bank followed complaints by some bank customers that their banks had turned them back from continuing the enrollment for the BVN due to the expiration of the deadline.

He said it would be improper for banks to turn back their customers from enrolling in the exercise.

Mu’azu also observed that many customers focused on BVN enrolment alone, forgetting that there were two stages to the BVN process, adding that the first stage was to enroll for the BVN, after which customers are expected to link their BVN to all their bank accounts.

He said an individual could enroll for a BVN without necessarily having an existing bank account, stressing that such individuals could then submit the acquired BVN at the point of opening bank account(s) in any bank of their choice.

He also said the process of linking BVN to bank accounts was now a one-stop shop to enable customers register and link their BVN from one location, irrespective of the banks in which they have accounts. All these, he said were aimed at making the process as seamless as possible.

The CBN had approved an extension of the exercise for Nigerian bank customers in the Diaspora. The bank also issued a statement clarifying the use of BVN for FOREX transactions.

He explained that the BVN was neither a payment instrument nor an account number and therefore could not be used to access any account by unauthorized users.

He said the BDCs were only required to collect the BVN of customers for the purpose of validating the identity of customers as well as making periodic returns to the CBN.

While noting that travellers from Nigeria had been submitting their BVN to buy foreign currencies from authorised dealers at the international airports, without complaints, the CBN spokesman questioned why submitting BVN to BDCs had become an issue.

[ThisDay]

N25 billion Scam Hits TSA Implementation

The recently introduced Treasury Single Account (TSA) by the federal government has run into troubled waters as what is believed to be a scam running into twenty-five billion naira (N25bn) has been unearthed in the management of the scheme.

Naira falls at parallel market as CBN insists on BVN requirement

The Naira on Friday depreciated further at the parallel market as buyers of forex boycotted Bureau de Change Operators (BDCs).