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CBN

  • CBN debunks fire incidence at Abuja head office

    The Central Bank of Nigeria (CBN) has denied the report that its head office in Abuja was on fire on Tuesday.

    In a statement issued by the apex bank’s spokesperson, Isaac Okoroafor said the report of the fire incidence was false.
    Read the statement in full:
    “Reports that the Central Bank of Nigeria (CBN) head office building is on fire are false.
    “Passersby who saw a pall of exhaust from the generator house far away from the building apparently mistook the exhaust for fire smoke.
    “The CBN maintains a total security system that triggers safety alarms in the presence of smoke and so all fire engines and personnel received the alert only to discover that it was an unusual pall of exhaust.
    “The affected generator has been rested and normal work has been uninterrupted, while the engineers are working to rectify the issues with the generator. We hereby assure the general public that there has been no fire at our building. “

  • CBN captures 31m Nigerians in BVN Project

    The Central Bank of Nigeria (CBN) has captured no fewer than 31 million account customers in its Bank Verification Number (BVN) project aimed at ensuring unique identifier in the Nigerian banking industry.

    CBN Director, Banking and Payment System, Mr Dipo Fatokun, disclosed this in a paper titled, `Nigeria’s progress towards the creation of a robust, trusted and inclusive Financial Services Environment’ delivered at the annual meeting of the ID4Africa movement on in Abuja.

    Fatokun said the CBN had also linked a total of 43,959,282 banks accounts in the BVN project.

    “To address the absence of a unique identifier in the Nigerian banking industry and to facilitate the creation of inclusive financial services environment.

    “The CBN in collaboration with the Bankers’ Committee launched the BVN Project on Feb. 14, 2014, with biometric solution, as a unique identifier for all bank customers.

    “The objectives includes the following: increase access, convenience, service levels across the industry; enable greater financial inclusion and integration of financial services into the economy, with its attendant positive impact on economic development,’’ he said.

    Fatokun said the BVN was also targeted at promoting safe and sound financial system in the country.

    He said that the BVN has helped in the provision of unique identity for customers that impact other areas such as credit check, and non-repudiation of transactions.

    According to him, the BVN has also helped to increase deterrent controls on financial transactions and reduce or mitigate fraud risk and identity theft.

    “Most importantly, it has created avenues for people who cannot write regular signature to make financial transactions, thus, facilitating financial inclusion.

    “As at December 2017, the implementation of the BVN Project recorded 31,426,091 registered BVNs and 43,959,282- accounts linked with BVN,’’ he said.

    Fatokun explained that the BVN was part of the Federal Government’s strategy towards accelerating financial inclusion in the country.

    “Nigeria launched its National Financial Inclusion Strategy in October 2012 with the goal of reducing the percentage adult Nigerians that are excluded from financial services from 46.3 per cent in 2010 to 20 per cent by 2020,’’ he said.

    Fatokun added that a number of factors were identified as barriers to financial inclusion among Nigerians.

    “The identified barriers to financial inclusion include lack of income, long distance to access points, lack of knowledge about financial services, high cost of services and cumbersome requirements for account opening.

    “In order to achieve the set target, and to address the aforementioned barriers, different measures and initiatives were put in place by the CBN.

    “To address the cumbersome documentation requirement for account opening, the CBN introduced the Three-tiered Know-Your-Customer (T-KYC) in 2013, which was modified in July, 2016.

    “The three-tiered KYC guideline allows individuals who may not meet the formal identification requirements and in banks to operate and enjoy banking services within defined thresholds.

    “The simplification consists of lowering the account opening requirements and less-paper documentation in exchange for lower threshold.

    “The CBN T-KYC is one of the initiatives for improving financial inclusion in Nigeria to facilitate easy access to a broad range of formal financial services,’’ he said.

  • 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.

     

  • CBN sets limit for daily mobile money transfer at N100,000

    CBN sets limit for daily mobile money transfer at N100,000

    The Central Bank of Nigeria (CBN) has set the sum of N100,000 as the maximum amount a bank customer can transfer via mobile phones using shortcodes.

    In a statement signed by Director, Banking and Payment systems of CBN, Dipo Fatokun, the decision was made because of the risks associated with mobile banking.

    “Concerns have been expressed on the likely exposure of CBN-approved entities to the possible breaching of the Unstructured Supplementary Service Data (USSD) accessed by financial services in view of likely vulnerabilities in the technology and the ever-growing threats,” the electronic circular read.

    Among other directives listed in the statement, CBN said, “Put a limit of N100,000.00 per customer, per day for transactions as may be required. However, customers desirous of higher limits shall execute documented indemnities with their banks or MMOs.

    Mandate the use of an effective 2nd-factor authentication (2FA) by customers for all transactions above N20,000. This shall be in addition to the PIN being used as 1st level authenticator, which applies to all transaction amounts.”

    The new directive is expected to take effect from June 2018.

    The bank added that any customer that would like to do transactions over N20,000 will require a pin and soft token which they would get from their banks.

    Banks are also expected to “install behaviour monitoring system with capacity to detect sim swap/ churn status, user location, unusual transactions at weekends, etc.”

    This system is expected to be put in place by October 31st, 2018.

  • Money laundering: CBN goes tough; issues stiffer sanctions, warnings to banks

    The Central Bank of Nigeria (CBN) has warned money deposit banks and their directors against aiding money launderers to avoid facing sanctions from the apex bank.

    The new regime of sanctions as released by the regulatory bank stipulates huge fines against financial institutions found culpable of any of 48 money laundering infractions.

    The new regime was contained in a circular titled: “CBN Anti-Money Laundering and Combating the Financing of Terrorism (administrative sanctions) regulations, 2018” by the Director, Financial Policy & Regulations Department of the CBN, Kevin N. Amugo, to all banks and other financial institutions.

    Amugo said the regulations were developed to ensure Nigeria’s compliance with Financial Action Task Force (FATF) recommendation 35.

    The law expects countries to ensure there is a range of effective, proportionate and dissuasive sanctions, whether criminal, civil or administrative, available to deal with natural or legal persons.

    The regulations said failure to comply with the anti-money laundering and terrorism requirements attract sanctions, which should be applicable not only to financial institutions, but also to their directors and senior management.

    The CBN said banks and board members or chief compliance officers would all be sanctioned for 31 out of the 48 money laundering infractions listed in the new regime.

    For each of the 31 infractions, the new regime stipulates minimum fines, ranging from N500,000 to N1.2 million on board members, or chief compliance officers or the internal auditor, and fines ranging from N1 million to N20 million on the offending banks.

    Infractions and penalties stipulated under the new regime include N1 million on each member of the board and N20 million on the Deposit Money Banks (DMB) that fail to approve the AML/CFT policies and procedures -a minimum penalty.

    Details of the other fines include N750,000 on the Executive compliance officer and another N750,000 for each year the contravention continues, for failing to review/update the AML/CFT policies and procedures at least every three (3) years.

    About N500,000 was imposed on the Chief compliance officer in the first instance and N500,000 for each year the contravention continues, while the bank would pay N5 million in the first instance and N1 million for each year the contravention continues.

    Failure to communicate the AML/CFT programme of the organization to the employees would attract a minimum penalty of N750,000 on the Executive compliance officer, N500,000 on the Chief compliance officer and N10 million on the bank.

    For the board or its committee to fail to supervise and ensure the effective implementation of the anti-money laundering/financial terrorism programme, each member of the board of the bank would pay a minimum penalty of N500,000 each against N10 million by the bank.

    The fine for failure of the officer to generate periodic reports on AML/CFT issues to the board or its relevant committee, the circular said, was a minimum penalty of N750,000 on the Executive compliance officer, N500,000 on the Chief compliance officer and N5 million on the bank.

    Also, penalties are imposed for failure to classify money laundering and terrorism finance risks in the bank, or failure to put in place guidelines for risk assessment and profiling of customers in institutions, board approved programme and failure to carryout risk assessment and profiling of each account.

    The penalties include a minimum of N1 million on the Chief compliance officer of the bank, a minimum penalty of N3 million on the bank for failure to put in place guidelines for risk assessment and profiling of customers in money laundering and terrorism programme.

     

  • Access Bank gets commendation for saving Etisalat

    Shareholders of Access Bank Plc have commended the bank and other members of the consortium of banks that provided the $1.2bn loan that saved Etisalat (now 9mobile) from collapsing.

    The shareholders stated this at the bank’s 29th Annual General Meeting (AGM) in Lagos on Wednesday.

    Mr Bayo Adeleke, immediate past Secretary, the Independent Shareholders Association of Nigeria (ISAN), lauded the bank’s effort in ensuring that the telecoms company did not collapse.

    Adeleke said the bank’s decision to accommodate a business that was going comatose helped many Nigerians to retain their jobs in the telecommunication company.

    He said that many Nigerians would have lost their jobs if the company was allowed to collapse, thereby increasing the country’s unemployment rate.

    Adeleke, however, urged the management of the bank to ensure recovery of the debt in order to increase its bottom-line and dividend payout in the years ahead.

    He said the bank’s profit would have increased significantly if not for the telecommunication company’s loan provision.

    Access Bank’s result for the financial year ended Dec. 31, 2017 showed that total impaired loans and advances stood at N101.36 billion from N36.61 billion recorded in 2016.

    Adeleke frowned at the N357.17 billion restricted deposits with the Central Bank of Nigeria (CBN) without interest during the period under review.

    He said the apex bank should pay interest on the fund in line with laws of Economics.

    Adeleke also called for the winding down of the Asset Management Corporation of Nigeria (AMCON), noting that the corporation had overstayed its welcome.

    He said Access Bank paid AMCON the sum of N27 billion in the last two years, and the reason for its establishment was no longer necessary.

    Adeleke lamented the incessant attacks on banks by armed robbers, urging government at all levels to provide the needed security for lives and property.

    Mr Taiwo Oderinde, another shareholder, called for enhanced training of the bank’s chief finance officer, risk officers, among others for improved performance.

    Oderinde said the officers should be exposed to local and foreign training due to rising cases of fraud in the industry.

    Responding, Mr Herbert Wigwe, Managing Director of the bank, said 2017 was not easy for the banking industry.

    Wigwe said the exchange rate volatility and other economic headwinds resulted in significant loan loss provision during the period, which affected the bank’s profitability.

    He explained that the drop in its profit was due to the telecommunication firm’s loan provision.

    Wigwe told shareholders to expect improvement in the years ahead, noting that the bank was still on the loan issue.

    On the issue of security, Wigwe said the country needed to solve its social issues to achieve growth and development.

    The bank posted gross earnings of N459.08 billion during the period as against N381.32 billion achieved in the comparative period in 2016, an increase of 20 per cent.

    Its profit before tax dropped from N90.34 billion in 2016 to N80.07 billion during the review period, a decline of 11.36 per cent. The profit for the year similarly dropped from N71.44 billion in 2016 to N61.99 billion in 2017.

    The shareholders approved a final dividend of 40k per ordinary share held by investors.

    The bank had earlier paid an interim dividend of 25k, the same amount paid the previous year.

     

  • Nigeria’ll sustain positive growth outlook — Adeosun, Emefiele

    The Minister of Finance, Mrs Kemi Adeosun and the Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, affirmed on Sunday that the country’s positive growth outlook would be sustained.

    The Minister and the CBN Governor gave this assurance at a joint press briefing at the end of the 2018 International Monetary Fund (IMF) and World Bank Spring Meeting in Washington DC, United States.

    Adeosun said the present growth outlook contrasted with the outlook in 2015, and that inflation rate was slowing down while the foreign reserves were rising.

    The minister, who expressed optimism that the Federal Government would be able to sustain the growth trajectory, however, called for vigilance and focus so that the country would not to fall back into recession.

    “We are confident that if we diligently implement our economic plan, we will grow the economy.

    “We have room to grow but other countries do not have room to grow.

    “By 2019, the growth will be far more robust than the present level in 2018.

    “We are therefore very optimistic in sustaining Nigeria’s economic growth.

    “We are going to use this opportunity to grow our fiscal buffers, particularly aggressively growing our revenue base.

    “The administration has succeeded in building macroeconomic resilience for Nigeria, particularly revising the funding mix, rebuilding fiscal buffers, enhancing foreign exchange reserves and focusing on import substitution strategies,” she said.

    Adeosun said that the Federal Government would continue to efficiently and effectively manage the cost of running state-owned enterprises such as the Nigerian National Petroleum Corporation as well as plug leakages.

    “We must make sure that every money that is earned comes in. We will drive the process of improving governance,” she said.

    On the nation’s domestic debt, the Minister stated that the Federal Government would not aggressively grow the debt.

    “We are refinancing our inherited debt portfolio from short term Treasury Bills to longer tenured debt which has resulted in huge savings and reduction in costs of funds for the government,” she said.

    Adeosun disclosed that the Voluntary Assets and Income Declaration Scheme (VAIDS) deadline was extended by three months till June 30, 2018 due to the appeals from tax payers for more time to regularise their tax status.

    She revealed that the present administration had raised the tax payers’ base from 13 million in 2015 to 17 million as at 2018.

    She confirmed the recovery of 322.51 million dollars of the Sani Abacha loot from the Swiss Government into a special account with the CBN.

    The funds, according to her, have been earmarked for the National Social Safety Nets programme of the Federal Government.

    “The objective of the National Social Safety Nets Project for Nigeria is to provide access to targeted transfers to poor and vulnerable households under an expanded national social safety nets system,” Adeosun said.

    Emefiele also reiterated Nigeria’s positive growth outlook, noting that a growth of 2.5 per cent had been projected by the IMF and World Bank for Nigeria.

    He disclosed that the country’s foreign reserves had risen to 47.93 billion dollars.

    “There is need to save for the raining day and also continue to grow the foreign reserves. If we had enough reserves, we wouldn’t have suffered the recession shocks,” he said.

    Emefiele assured that concerted efforts were being made to realise the 80 per cent target for financial inclusion by the year 2020.

     

  • CBN injects fresh $210m into forex market

    …as Naira exchanges for N360/$1

    The Central Bank of Nigeria (CBN) has intervened with another sum of $210m in the foreign exchange market to meet the requests of customers, as the regulator continues its efforts to maintain a stable exchange rate for the naira.

    A breakdown of the figures obtained from the bank in Abuja on Tuesday, indicated that the CBN offered the sum of $100m to authorised dealers in the wholesale segment of the market, just as it allocated the sum of $55m each to the Small and Medium-scale Enterprises segment and the invisibles segment to meet needs for tuition and medical payments and Basic Travel Allowance, among others.

    Confirming the releases, the CBN Acting Director in charge of the Corporate Communications Department, Isaac Okorafor, said the continued intervention by the bank was in line with its commitment to ensure liquidity in the market as well as reduce pressure on the naira.

    Okorafor said that the CBN was pleased with the current market situation brought about by policies it had put in place to check forex speculators, round trippers and rent-seekers.

    He noted that the policies had helped to stabilise the exchange rate in addition to the establishment of the Investors-Exporters window, which had increased FX supply with over $20bn inflow since its inception.

    According to Okorafor, the bank will not relent in its effort to manage the country’s forex with a view to reducing its import bills and checking any hemorrhage of its foreign reserves.

    The CBN, in its last intervention last Tuesday intervened to the tune of $210m to cater for requests in the various segments of the forex market.

    Meanwhile, the naira continued its stability in the forex market, exchanging at an average of N360/$1 in the BDC segment of the market on Wednesday.

     

  • Teleology Holdings ownership of 9mobile not guaranteed

    Arising from Nigerian Communications Commission (NCC) meeting held yesterday, there is no guarantee Teleology Holdings Ltd. will take over 9mobile after it had made a non-refundable deposit of $50 million for the acquisition of the Nigeria’s fourth largest mobile operator.

    This is so as the Executive Vice-Chairman of the Commission, Professor Umar Garba Danbatta at the meeting on Monday in Lagos said the NCC will not approve the sale of 9mobile to any bidder without technical competence.

    He, however, confirmed a preferred bidder for 9mobile had emerged with the full participation of NCC, adding that the bidder was already undergoing financial evaluation.

    “Once the Central Bank of Nigeria has done the financial evaluation of the bidder, NCC will also examine the technical capacity of the preferred bidder.

    “If the financial evaluation process was not done properly, the CBN would address questions on that; the examination process is meant to be open and transparent.

    “The board of 9mobile was given the mandate with these requirements in mind,” he said.

    One of the technical requirements is that the eventual owner of 9mobile should have a certain technical expertise with a minimum of 3 years operational history which from all indications Teleology Holdings Ltd. is lacking.

    However, Teleology has entered an alliance with Safaricom, the largest network operator in East Africa, which could put Teleology in an advantaged position.

    If eventually, Teleology doesn’t get 9mobile, it means Smile Communication as the preserved bidder gets the offer.

    At the meeting, Danbatta also confirmed the NCC had licensed four infracos.

    “Recently, Zinox Technology Ltd. was licensed for broadband infrastructure provisioning for the South-East Zone while Brinks Integrated Solutions Ltd. was issued licence for the North-East Zone.

    “A subsidiary of MainOne Cable Company Ltd. had earlier been licensed to provide services in Lagos.

    “IHS was also issued a licence to cover the North-Central Zone including Abuja,” he said.

    Danbatta said that much work would still need to be done in the deployment of 4G LTE infrastructure needed to support data services.

    “For now, the directive is that 3G should be made 4G LTE infrastructure compatible,’’ he said.

    Danbatta said that telecommunications contributed N1.45 trillion to the Nigeria’s Gross Domestic Product (GDP) in the first quarter of 2017.

    He said that the figure rose to N1.5 trillion in the second quarter of 2017 in spite of economic recession.

    According to Danbatta, telecommunications industry had investment worth $70 billion at September 2017 although the sector could not boast of $50 million worth of investments as at 2001.

     

  • Payment systems: NCC, CBN reach milestone agreements

    The Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) on Tuesday marked a milestone as the two regulatory bodies sign a memorandum of understanding on payment systems in Nigeria.

    TheNewsGuru reports Professor Umar Garba Danbatta lead a delegation of NCC’s senior management staff to the governor of the CBN, Godwin Emefiele where the latter recommended the signing of the MoU on payment systems in Nigeria.

    According to a statement by the NCC, the MoU takes serious cognizance of very crucial areas of collaboration between the two important regulators with respect to financial inclusion strategy, already being driven by the CBN.

    The strategy also provides responsibilities of the two organizations towards the achievement of government’s objective on payment systems, including but not limited to mobile money services.

    Prof. Danbatta spoke on the Commission’s critical review of the existing framework for the regulation of mobile payments in Nigeria, within the membership of a Committee comprising of the CBN, NCC, NDIC and the NIBSS.

    He stated that the Commission is looking forward to signing the revised strategy of the Anti-money Laundering (AML) aimed at preventing, detecting, indicting and control of money laundering and financial terrorism.

    Mr. Godwin Emefiele spoke on the critical importance of telecoms on the Nigerian economy and also congratulated the Commission on its efforts towards protecting the interest of telecom consumers and service providers.

    The two regulatory bodies re-assured each other that they will continue to partner and collaborate on shared terms for the actualization of their mutual mandates and enhancement of human lives.