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Tag: Banks

  • Banks’ credit to economy dipped by N136bn in Q1 – NBS

    Banks’ credit to economy dipped by N136bn in Q1 – NBS

    The total credit from banks to the economy recorded a decline of N135.8bn from N15.74tn at the end of the fourth quarter of last year to N15.6tn in the first three months of 2018.

    This is contained in the banking sector report released by the National Bureau of Statistics on Monday.

    The NBS stated that the total number of staff members in banks decreased by 0.93 per cent from 90,453 in the fourth quarter of 2017 to 89,608 in the first quarter of this year.

    It said in the first quarter of this year, the sector recorded a total volume of 457,226,406 transactions valued at N32.48tn.

    According to the report, data from electronic payment channels in the Nigeria banking sector revealed that Automated Teller Machine transactions dominated the volume of transactions during the period.

    It stated that there were 212,370,853 ATM transactions valued at N1.56tn that were recorded in the first quarter of this year.

    The report read in part, “In terms of credit to the private sector, the total value of credit allocated by the banking sector stood at N15.6tn as of Q1 2018.

    “Oil and gas and manufacturing sectors got credit allocation of N3.42tn and N2.07tn to record the highest credit allocation as of the period under review.

    “As at Q1 2018, the total number of banks’ staff members decreased by 0.93 per cent from 90,453 in Q4 2017 to 89,608.”

    Based on analysis of the report, the agricultural sector received N501.6bn; power and energy, N426.5bn; construction, N647.9bn; trade and general commerce, N1.05tn; while credit to government was put at N1.41tn.

    In the same vein, the real estate sector received a total loan of N784.2bn; finance, insurance and capital market, N999.4bn; education, N73.48bn; information and communications, N865.32bn; transportation and storage, N291.67n; while other sectors got N384.8bn.

  • Banks ripping us through ATMs, customers cry out

    Banks ripping us through ATMs, customers cry out

    Commercial Bank customers within the Federal Capital Territory (FCT) have decried excess charges by banks through Automated Teller Machine (ATM) withdrawals.

    Some customers who spoke to a News Agency of Nigeria (NAN) correspondent, said they dreaded making withdrawals using other banks ATMs because of the continued charge of N65 for every transaction.

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

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

    They, however, called on the Central Bank of Nigeria (CBN) and other relevant authorities to look into the matter so as to help poor Nigerians.

    Miss Agatha Young, a First Bank customer, said, “I live in Kubwa, one of the suburbs around the city centre and almost all the banks ATMs in my area dispense maximum of N10,000.

    “Recently, I needed to withdraw N200,000 and my bank’s ATM was crowded, so I went to use another bank’s ATM only to discover that the machine was dispensing only N10,000 per transaction.

    “I was only able to withdraw N150,000 because other customers were waiting on the queue and I was tired of going through the same process.

    “I also discovered I was charged almost N1000 for that transaction as I had exceeded three withdrawal limit using the other bank’s ATM, which is outrageous.’’

    Mr Sunday Mgbede, a Gurantee Trust Bank customer, residing in Nyanya, another suburb around the city centre also said most of the ATMs in his area dispensed maximum of N10,000 per transaction.

    “If you want to make withdrawals at weekends around the Nyanya/Mararaba axis, you will discover that only few ATMs are dispensing over N10,000 per transaction.

    “The concerned authorities should please look into this matter because people are suffering, there is no money in the country, yet banks want to make profit off customers.

    “Even the N65 charge which CBN authorised should be charged after three transactions, I am not sure the banks follow the rule due to the debit alerts we receive after withdrawals.’’

    Another customer of First Bank, Erica Jonah who narrated her experience, said she used her ATM card to withdraw N100,000 from another bank and discovered the machine was programmed to dispense N10,000 per transaction and was charged N65 per every transaction.

    Jonah said that was not her first experience, describing the practice by banks involved in it as fraudulent.

    She also called on regulatory bodies in the industry to look into the matter with a view to curbing such excesses by banks involved in the practice.

    Meanwhile, Mrs Gift Agbo, a former banker, said most ATMs used by banks in the country were not designed for Nigeria’s currency and that is why the amount it dispensed was limited.

    “Some of these machines are old and not programmed for the kind of money we have in the country.

    “The notes which many banks put in the machines also limits the amount that can be dispensed by the machines.

    “I am sure this problem can be resolved if Nigerian banks invest in customised machines that are suitable for our environment and currency,’’ she said.

    In its reaction, CBN Consumer Protection Department said it had received several complaints from bank customers over the low withdrawal limit set by banks on their ATMs.

    Mr Fada David, thevSenior Manager, Complaints Management Division of the Department, assured customers that the apex bank was working to make sure that such complaints were addressed.

    “Yes we have received complaints from people saying they could withdraw for example N40,000 from bank A yet they are not able to get that much if they carry a card of Bank A to bank B ATM.

    “First of all, I want the public to know that withdrawal from any ATM at all is not supposed to attract any charges until you withdraw more than three times in a month.

    “If you are using your bank’s ATM, you are at liberty to withdraw as many times as you like in a month without incurring any charges.

    “Also, we want to encourage customers to engage their banks to find out why there is such a withdrawal restriction on ATMs,’’ he said.

    David also urged customers to embrace the cashless policy and use other payment methods such as POS, internet and other Mobile banking applications; to reduce over dependence on cash.

    “You can use other payment channels for goods and services. You can go to the market, buy something and use your mobile app, pay for that product.

    “Unless it is absolutely necessary that you need to take cash, consumers can take advantage of a lot of other payment channels to pay for goods and services and do other transactions,’’ he said.

    David said that bank customers also have the responsibility to improve the way their bank serves them by officially writing to complain about bad services.

    According to him, it is only then will the bank address the issue to make sure that their customers are happy with the services being rendered.

  • Delayed accounts: CBN threatens to sack CEOs, chairmen of defaulting banks

    The Central Bank of Nigeria (CBN) has directed that henceforth the CEOs and chairmen of any bank which fails to publish its annual account 12 months after the financial year end will be removed from office.

    This directive is contained in the CBN’s Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2018/2019 released at the weekend. It was signed by CBN Governor Godwin Emefiele.

    The policy aligns with the provisions of the Bank and Other Financial Institutions Act (BOFIA) 1991, which require banks to, subject to the written approval of the CBN, publish their audited financial statements- financial position and comprehensive income- in a national newspaper printed and circulated in Nigeria not later than four months after the end of each financial year.

    Besides, to allow the implementation of consolidated supervision, the CBN directed all banks, discount houses and their subsidiaries to continue to adopt December 31 as their accounting year end.

    ”The CBN will continue to hold the Board Chairman and Managing Director of a defaulting bank directly responsible for any breach and impose appropriate sanctions, which may include barring the Managing Director or his/her nominee from participation in the Bankers’ Committee and disclosing the reason for such suspension.”

    “It will also include suspension of the foreign exchange dealership licence of the bank and its name sent to the Nigerian Stock Exchange (in the case of a public quoted company) and removal of the Chairman and Managing Director/CEO from office if the accounts remain unpublished for 12 months after the end of the bank’s financial year,” the report said.

    One Systematically Important Bank (SIB) with offshore subsidiaries in three countries has failed to publish its financial statement for the past three years. Its last published financial statement was for the third quarter ended September 30, 2015.

    Also, based on the new CBN’s policy on financial account publication, any bank that fails to publish its 2017 financial statement by the close of business today will be sanctioned by the regulator.

    The new CBN policy spells out borrowing terms and liquidity positions for commercial, merchant and noninterest banks. It says the minimum liquidity ratio for commercial, merchant and non-interest banks should be retained at 30, 20 and 10 per cent, subject to review from time to time.

    “In the 2018/2019 fiscal years, discount houses will continue to maintain a minimum investment of 60 per cent of their total liabilities in government securities. The ratio of individual bank loans to deposits is retained at a maximum of 80 per cent. The Net Open Position (NOP), long or short, of the overall foreign currency assets and liabilities taking into cognisance both on and off-balance sheet items will not exceed 10 per cent of shareholders’ funds unimpaired by losses,” it said.

    It said the aggregate foreign currency borrowing of a bank, excluding intergroup and inter-bank (Nigerian banks) borrowing, will not exceed 125 per cent of shareholders’ funds unimpaired by losses. “Banks are expected to hedge borrowing using financial market tools acceptable to the CBN; borrowings must be subordinated debts with prepayments allowable only at the instance of the bank and subject to prior approval of the CBN; and all debts, with the exception of trade lines, will have a minimum fixed tenor of five years,” it added.

    On discount window operations, the CBN specified that all eligible markets players may borrow funds from or lend funds to the CBN on short-term basis, to meet their temporary shortage of liquidity occasioned by internal or external disruptions or deposit their excess funds, respectively. “The window, through the Standing Lending Facility (SLF) and the Standing Deposit Facility (SDF) will be accessible at a stipulated time at the end of the business day to enable the institutions square up their positions overnight at appropriate rates tied to the Monetary Policy Rate,” it said.

    It advised banks to seek profitability by driving down cost and charging competitive rates instead of charging excessive rates of interest. Therefore, banks are expected to develop and implement a Risk-Based Pricing Model in line with the provisions of CBN.

    The CBN will continue to maintain and upgrade the Real-Time Gross Settlement (RTGS) System for settlement of inter-bank fund transfers and time-critical payments and categorise banks into settlement and non-settlement banks for the purpose of clearing and settlement.

    The settlement banks are to participate directly in the clearing houses and receive their net clearing position in their settlement account with the CBN while non-settlement banks receive their net clearing position through the settlement account of their settlement bank.

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

    On capital adequacy, the CBN said the minimum ratio of total qualifying capital to total risk-weighted assets will remain at 10 per cent for regional and national banks, and 15 per cent for international banks in the 2018/2019 fiscal years.

    ”Not less than 66.67 per cent of banks’ capital will comprise paid-up capital and reserves. Banks will also maintain a ratio of not more than one to ten (1:10) between adjusted capital funds and total credit net of provisions. They are encouraged to maintain a higher level of capital commensurate with their risk profile. Banks and banking groups are required to comply with the appropriate guidelines for the measurement and calculation of capital requirements.”

    The differences resulting from the comparison of expected losses determined under International Financial Reporting Standards (IFRS) with all losses determined under the prudential guidelines will continue to be adjusted under the statement of changes in equity, through the non-distributable regulatory reserve.

    The CBN said it will continue to enforce the stipulated penalties for noncompliance with regulatory guidelines, as well as the provisions of the CBN Act 2007 and the BOFI Act 1991 (as amended), in the 2018/2019 fiscal years. “Any financial institution that fails to comply with extant guidelines and other directives that may be issued by the CBN will be sanctioned accordingly,” the CBN said.

     

  • Horror: Six policemen, several others killed as robbers invade banks in Offa [video]

    Horror: Six policemen, several others killed as robbers invade banks in Offa [video]

    There was pandemonium on Thursday in Offa, a local community in Offa Local Government Area of Kwara State as dare devil robbers invade killed six policemen and six others including residents during a raid of some commercial banks in the area.

    https://www.youtube.com/watch?v=vvd_5DEphx0

    Sources said the men, who numbered close to 30, blew up entrances into the banks with dynamite in an operation which lasted for more than one hour.

    The banks allegedly affected by the raids are Guaranty Trust Bank, Zenith Bank, First Bank, Union Bank and Eco Bank.

    According to a reports, the robbers entered the area around 4pm, shoting continuously to scare aware some residents.

    They reportedly blocked roads from both Ilorin and Oshogbo and entered Owode Police Station in the metropolis.

    They were said to have shot dead four policemen at the division, including some complainants.

    Among those reportedly killed by the robbers were a police officer, who was expected to retire in the next few months, and a pregnant policewoman.

    The gunmen reportedly made away with millions of naira after shattering bank buildings, terrorising workers, customers and passersby, as well as traders and other people in the vicinity.

    A witness, who did not want to be identified, said he saw the corpses of six policemen.

    “The ground was littered with corpses. Many people died. I counted six corpses of some policemen at the scene,” he said.

    An Internet user said cars on the banks premises were also burnt.

    He said, “My siblings just came back home. They were on their way back to church and were caught in the crossfire close to Zenith Bank.

    “According to them, no military force confronted the robbers throughout the operation. They used dynamite and crazy guns.

    “They saw four people killed. They would have been killed because after they (robbers) finished the operation, a few of them opined that they should release gunfire on them (my siblings and those close to them), but a man, who seemed to be their boss, told them they had little time left and had no option than to exit immediately. Cars were burnt; cars were stolen. They exited through Igbosun route.”

    Graphic pictures of slain policemen and residents were posted by some residents on the Internet.

    The Kwara State Police Public Relations Officer, Mr. Ajayi Okasanmi, confirmed the robbery incident.

    He also confirmed that there were casualties, but he could not confirm the number of dead people and how much was stolen.

    Okasanmi said, “It is true that there were attacks on some banks at Offa, but I cannot identify the banks now. I learnt that there were casualties, but I cannot confirm the number until I am briefed. But more policemen have been deployed in the area and they have restored calm.”

     

  • CBN lends banks N27.6tr in six months – Report

    Commercial Banks borrowed N27.46 trillion from the Central Bank of Nigeria (CBN) in six months, data from the apex bank’s half year report on financial sector performances released on Tuesday shows.

    The 2017 half-year Financial Markets Activity Report, said loans came in the form of Standing Lending Facility (SLF), including the Intra-day Lending Facilities (ILF). The standing facilities were accessed by the banks to enable them either meet their short-term liquidity needs or place their surpluses. The rates for SDF and SLF remained at nine and 16 per cent, respectively.

    The report said the SLF was utilised by the banks in order to enable them square up their positions after inter-bank market trading hours. It said of the total SLF granted in the review period, N20.62 trillion was conversion from unsettled ILF.

    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 were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.

    According to the report, signed by CBN Director, Financial Markets Department, Alvan Ikoku, the banks continued to access the CBN’s Standing Facilities window to square up their positions either by borrowing from the SLF window or depositing excess reserves at the standing deposit facility (SDF) window of the CBN at the end of each business day.

    The report said the SLF was utilised by the banks in order to enable them square up their positions after inter-bank market trading hours. It said the patronage of the facility reflected the liquidity position during the first half of the year, as requests were at its lowest on January 2, 2017 with N83.61 billion and at its highest on April 18, 2017 with N478.54 billion.

    “In view of the 122 transaction days within the period, average daily request amounted to N225.14 billion. Consequently, the cumulative interest received on the facilities was N21.13 billion at 16.00 per cent. In comparison with the corresponding period of the previous year, total SLF transactions amounted to N5.07 trillion, out of which N4.87 trillion was conversion from ILF.

    It said the average daily request stood at N59.76 billion, while the cumulative interest received on the facilities was N2.92 billion at the applicable rates of 13.00 and 14.00 per cent. The higher level of transactions over the corresponding period in 2016 was occasioned by the tight monetary operations in 2017.

    The CBN report said patronage of the SDF reflected the liquidity unease in the system as less funds were deposited compared with the corresponding period of the preceding year.

    “The reduced patronage was due to tighter monetary operations through increased Open Market Operation (OMO) auctions. The foreign exchange interventions, in addition, moderated the cash balances in the banking system. The restriction of N7.50 billion maximum remunerable SDF per bank remained applicable.

    The total request for SDF in the review period was N5.1 trillion, indicating a daily average volume of N45.54 billion as against a total SDF of N12.69 trillion and daily average of N102.42 billion in the corresponding period of 2016.

    Further analysis of the transactions indicated that the highest amount of SDF was N121.50 billion on February 2, while the lowest was N0.30 billion on March 20.

    Consequently, the interest paid on SDF amounted to N1.99 billion at the rate of 9.00 per cent in the first half of 2017, as against N2.84 billion at 4.00 per cent from January 1 to March 21 and 7.00 per cent from March 22 to June 30, 2016.

    It said the total value of transactions in the funds market stood at N864.93 billion in the first half of 2017, as against N513.11 billion in the corresponding period of 2016. The high level of activity in the review period was attributable to liquidity squeeze occasioned by tight monetary operations.

    Further analysis of the transactions indicated that open-buy-back (OBB) accounted for 89.42 per cent at N773.42 billion, while the unsecured recorded 10.58 per cent at N91.51 billion.

    In the preceding year, OBB accounted for less at N203.54 billion or 39.67 per cent compared to the unsecured segment which recorded N309.57 billion or 60.33 per cent. The shift in patronage in favour of OBB in the review period was attributable largely to greater risk aversion by market participants.

     

  • Stakeholders appeal to new owner of 9mobile to resolve $1.2b loan owed banks

    Some capital market stakeholders on Monday appealed to Teleology, the new owner of 9mobile, to resolve amicably the 1.2 billion dollars syndicated loan owed some Nigerian banks.

    The stakeholders made the appeal in separate interviews with the News Agency of Nigeria in Lagos, while reacting to the emergence of Teleology as the new owner of the firm.

    Prof. Sheriffdeen Tella, the Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun said the new owner should consider the outstanding loan as paramount.

    Tella said that an amicable resolution of the loan would bring stability to the telecom industry.

    He suggested that the laws guiding the establishment, operations and funding in the industry should be reviewed to enthrone an enabling working environment in the sector.

    “There is the need to encourage telecom firms to enlist on the Nigerian capital market to raise funds whenever they are about to run into troubled waters financially.

    “Eventual sale of 9mobile to a new private concern will lead to improvement in the services provided by the telecom firm, build confidence in the telecom industry and create employment,” Tella said.

    Mallam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that if the new service provider settled the debts, it would bring a relief to the indebted banks.

    Kurfi said the restructuring of the loan by Teleology and eventual payment would reduce the banks liabilities.

    “It is a great relief to the Central Bank and particularly to the banks that have huge exposure,” he said.

    Mr Boniface Okezie, the President, Progressive Shareholders Association of Nigeria (PSAN) described the development as good news to the shareholders of indebted banks.

    Okezie said the loan repayment would enable the affected banks to recoup their money as a result of the loan to 9mobile.

    He called on the affected banks to work closely with the new owner to ensure prompt repayment of the loan.

    Teleology Holdings Ltd. beat the March 22 deadline for transfer of a non-refundable deposit of 50 million dollars for the acquisition of 9mobile.

    Teleology emerged the new owner of 9mobile ahead of Smile Communications, which was the only other firm in the final round of the takeover bid.

    At the beginning of submission of bids, more than 10 bidders indicated interest in acquiring the mobile network, but only five were shortlisted.

    The five firms are Bharti Airtel, Globacom, Helios Investment, Smile Communications and Teleology Holdings.

    The acquisition bid resulted when the largest shareholder, Mubadala Development Company of the United Arab Emirates, (formerly Etisalat), pulled out of the firm.

     

  • Unauthorized deductions: Settle customers’ complaints within two weeks – CBN directs banks

    The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to settle customers’ complaints on issues of overcharge, unauthorised deductions and other matters within two weeks.

    The CBN Head of Complaints Management Division, Mr. Tajudeen Ahmed, said this in an interview with newsmen in Abuja on Thursday.

    He said the CBN would ensure that bank customers get a redress on issues of excess charges or unauthorised withdrawals.

    Ahmed reiterated the apex bank’s commitment to eradicating excess and arbitrary charges.

    According to him, the CBN has since issued a circular which could be found on its website, showing all legitimate bank charges.

    He said that any charge outside what is stated in the circular is not allowed.

    “The consumer protection department issued guidelines to banks dated August 16, 2011, directing all banks and other financial institutions to resolve all customer complaints within two weeks of receipt.

    “Before the expiration of that complaint, the financial institution is expected to be engaging the customer on a continuous basis to update him or her on the status of the complaint.

    “If it is not resolved within the deadline given, then such a person is encouraged to draw the attention of Central Bank of Nigeria to the complaint,” he said.

    Ahmed advised customers with unresolved complaints to contact the CBN by writing to the Director Consumer Protection Department or send an email to cbd@cbn.gov.ng.

    He also advised dissatisfied bank customers to visit any branch of the CBN closest to them to make their complaints.

    “The CBN continually engages the banks to find out if their conduct and practices are fair to their customers in order to stimulate people’s confidence in the banking system.

    “Non-adherence to that normally results to regulatory sanctions, as the case may be,” he said.

    Ahmed also faulted banks for setting a limit on ATM withdrawals.

    “I have also observed and noted this. Don’t forget that at the beginning, it wasn’t like this. Over time, we started having this problem.

    “One of the reasons is that the quantum of N500 denomination is much more than that of N1,000 denomination.

    “When we approached the banks about these problems, they said the machines become easily faulty when it is set to dispense up to N30,000 to N40,000 units.

    “However, CBN has directed that the machines that allow payment of up to N30,000 to N50,000 should be installed.

    “This is still ongoing. The Banking and Payment Department of the CBN is championing it,” he said.

    Also, the Head of Consumer Protection Division, Mrs. Hadija Kasim, said bank customers could also avoid some of these issues by inculcating the habit of cashless policy.

    She reminded the public that there were various methods to make payments rather than carrying cash.

    “Let’s not forget that ATM cards can also be used on Point of Sale (POS) terminals.

    “We are encouraging people that unless it is absolutely necessary, they should reduce the carriage of cash.

    “Cashless transactions are more convenient, safer and you will avoid the problem of overcharges,” she said.

    Kasim also advised bank consumers to use bank transfer channels for transactions in cases where sellers do not have POS.

  • Non-performing loans: CBN bars banks, discount houses from paying dividends to shareholders

    In a smart move to stop Deposit Money Banks and Discount Houses with huge bad loans and low capital base from total collapse, the Central Bank of Nigeria (CBN) has stopped such banks from paying dividends to shareholders.

    This is due to the rising non-performing loans and the need to stop further erosion of the capital base of the banks and discount houses.

    The directive is coming barely a week to the release of the 2017 financial year’s annual reports by commercial banks and discount houses in the country.

    The development has dashed the hope of many shareholders as a number of the banks will be affected by the directive and consequently unable to pay dividends.

    The CBN said the move was aimed at stemming the tide of rising non-performing loans and the consequent weakening and erosion of the banks’ capital base.

    The directive was handed down in a letter dated January 31, 2018.

    In the letter to the banks and discount houses, which was signed by the Director, Banking Supervision Department, CBN, Ahmad Abdullahi, the regulator said it had observed that rather than grow their capital with retaining earnings, some banks were paying out a greater proportion of their profits, irrespective of their risk profile and the need to build resilience through adequate capital buffers.

    As a result, the apex bank barred the DMBs and discount houses with the NPLs above 10 per cent from paying dividends to their shareholders.

    The CBN’s minimum NPL threshold for banks is five per cent, meaning lenders’ bad loans should not exceed five per cent of their loan books.

    As of September 2017, the banking industry’s NPLs had hit 15.18 per cent.

    The circular, which was made public on Sunday, read in part, “Globally, retained earnings have been identified as an important source of growing an institution’s capital. Advantages of retained earnings include being a source of long-term finance; being easier and cheaper to raise than external finance; curtailment of financial risks; and improving liquidity and profitability.

    “However, it has been observed that rather than take advantage of this beneficial means of capital generation, some institutions pay out a greater proportion of their profits, irrespective of their risk profile and the need to build resilience through adequate capital buffers.”

    It added, “In order to facilitate sufficient and adequate capital build up for banks in tandem with their risk appetite, the following directives will now apply:

    “Any Deposit Money Bank or discount house that does not meet the minimum capital adequacy ratio shall not be allowed to pay dividend.

    “The DMBs and DHs that have a Composite Risk Rating of ‘High’ or a non-performing loan ratio of above 10 per cent shall not be allowed to pay dividend.

    “The DMBs and DHs that meet the minimum capital adequacy ratio but have a CRR of ‘Above Average’ or an NPL ratio of more than five per cent but less than 10 per cent shall have dividend pay-out ratio of not more than 30 per cent.

    “The DMBs and the DHs that have capital adequacy ratios of at least three per cent above the minimum requirement, the CRR of ‘Low’ and the NPL ratio of more than five per cent but less than 10 per cent, shall have dividend pay-out ratio of not more than 75 per cent of profit after tax.”

    “There shall be no regulatory restriction on dividend pay-out for the DMBs and the DHs that meet the minimum capital adequacy ratio, have a CRR of ‘Low’ or ‘Moderate’ and an NPL ratio of not more than five per cent. However, it is expected that the boards of such institutions will recommend pay-outs based on effective risk assessment and economic realities.

    “No DMB or DH shall be allowed to pay dividend out of reserves.

    “Banks shall submit their board-approved dividend pay-out policy to the CBN before the payment of dividend shall be permitted. All ratios shall be based on financial year averages. This circular takes immediate effect.”

     

     

  • Senate summons Emefiele, banks, others over illegal deductions

    The Senate on Tuesday summoned the governor of Central Bank of Nigeria, CBN, Godwin Emefiele, forensic auditors, Managing Directors of banks and Bankers Committee over the recurring issue of illegal deductions and bank charges on both individual and corporate accounts.

    It also mandated the Committee on Banking, Insurance and other Financial Institutions, led by Senator Rafiu Adebayo Ibrahim (APC, Kwara South) to organise a public hearing for the purpose of harmonising and amending laws, rules and guidelines that do not adequately protect the customers and give them substantial remedy when overcharged.

    It also urged the government to proactively protect customer’s rights, eradicate short payments of interest and end the culture of excess and arbitrary bank charges.

    According to the Senate, these steps, if taken, will reposition the banks in the country to avert a recurrence. The resolutions of the Senate, co-sponsored by 22 other senators, were sequel to a motion by Senator Magnus Abe (APC, Rivers South-East), “Urgent need to investigate, regularise and amend conflicting, vague and unjust remedies which the Central Bank of Nigeria offers to victims of excess and arbitrary bank charges and illegal deductions by commercial banks.”

    In the presentation of the motion, Senator Abe said: “The Senate notes that over the years, commercial banks in Nigeria have indulged in sharp practices of overcharging customers/depositors arbitrarily and excessively, contrary to tariff stipulations, credit and monetary guidelines issued from time to time by the Central Bank of Nigeria.”

    In his remarks, Senate President, Dr Bukola Saraki, who commended Senator Abe on the motion, stressed that every naira was important to customers, especially due to the present economic situation in the country.

  • Tax evasion: EFCC recovers N27.7b from six banks

    The Economic and Financial Crimes Commission (EFCC) has recovered over N27.7billion from six banks being unremitted withholding tax on dividends.

    Also, about seven more banks were said to be on the radar of the anti-graft agency for similar infractions.

    According to a fact-sheet obtained by The Nation, the EFCC is expecting recovery of more withholding tax.

    The document reads: “The Economic and Financial Crimes Commission (EFCC) has recovered a staggering sum of N27, 712,334,455.06 as withholding tax on dividends payment by six Nigerian banks.”

    “The recovery by the Bank Fraud Section of the Lagos office of the Commission was made through direct intervention by the Commission and indirectly through the assistance of the Federal Inland Revenue Service (FIRS), the Internal Revenue Service (IRS) of some states as well as the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).

    One bank allegedly accounted for more than 80 percent of the amount as N26, 468,223,358.24 was recovered from the bank between November and first week of December, 2017.

    “Of the sum, the EFCC directly recovered N4, 207,235,701.06 from the bank, while N22, 260,987,657.24 came through the intervention of FIRS, the Lagos State Internal Revenue Service, the Internal Revenue Service of other states and the RMAFC.

    “The balance of N1, 244,111,097.43 was recovered from the other five banks. The investigation is still on going.

    “Seven other banks are currently under the Commission’s radar with respect to withholding tax on dividends.

    “We are certain to record more recovery by the time the investigation is completed”.

    However, none of the banks could be reached for comments at the time of filing this report.