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CBN

  • CBN injects $355.43m into forex market

    The Central Bank of Nigeria (CBN) in its resolve to guarantee liquidity in the market, on Friday injected the sum of $355.43 million into the Retail Secondary Market Intervention Sales (SMIS).

    Figures obtained from the CBN revealed that the intervention was to meet requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

    The Bank’s Acting Director, Corporate Communications Department, Mr. Isaac Okorafor confirmed the development.

    He reiterated that the CBN’s interventions in the market were aimed at sustaining liquidity in the market as well as boosting production and trade.

    He explained that with increasing accretion to the country’s reserve, the Bank is in a much better position to ensure liquidity in the inter-bank sector of the market and as such would continue to intervene in order to drive growth in the economy and guarantee stability in the market, particularly now that the economy had gained steam due to an upsurge in the non-oil sector.

    With the naira closing at N360/$1 on Friday, Okorafor expressed confidence that the Bank’s forex intervention underscored its determination to maintain the country’s external reserves in order to safeguard the international value of the naira.

    The CBN had in its last SMIS on February 2018, injected the sum of $321.4 million in the interbank market, while also intervening in the inter-bank foreign exchange market to the tune of $210,000,000, comprising of $100million for the wholesale segment and $55 million for both the Small and Medium Enterprises (SMEs) and invisibles segment.

     

  • Scarcity: CBN commences issuing lower naira notes to traders

    The Central Bank of Nigeria has commenced the disbursement of smaller naira notes to traders in order to improve the circulation of N5, N10, N20, and N50 in the economy.

    The acting Director, Currency Operations Department, Mrs. Priscilia Eleje, said this at a publicity campaign on “Disbursement of Lower Denominations of the Naira’’ in Wuse Market, Abuja on Tuesday.

    She said the campaign was targeted at the informal sector, especially traders in markets, with the aim of increasing the circulation of the smaller units of the naira to make doing business easier.

    According to her, the Federal Capital Territory will be used as the pilot stage of the new campaign and if successful, will be replicated nationwide.

    Eleje said the new strategy would ensure that traders desist from hiking prices of goods just to avoid looking for “change.’’

    According to her, new naira notes will be distributed to traders within Wuse and Garki markets and others through their associations.

    “The notes we will be disbursing are mints. This money is not meant for you to keep in your house or to go and spray at weddings or sell.

    “We have our operatives everywhere and whoever is caught selling these notes will be prosecuted.

    “These notes are meant to be used for daily transactions so that when a customer comes to the market, you won’t tell him or her that you don’t have change,’’ she said.

    Eleje said the money was not free, adding that rather, the CBN through the various associations in the market would exchange lower denominations for larger ones.

    Also, the Deputy Director, Currency Operations Department, Mr. Vincent Wuranti, lectured the traders on ways to handle and maintain the naira notes.

    He urged all users to desist from squeezing the notes, writing on them or handling the notes with soiled hands.

    Wuranti also urged the public to inculcate the habit of using wallets in order to safeguard the naira and allow it to have a longer life span.

    The Chairman, Wuse Market Association, Mr. Rapheal Okoro, said insufficient lower denominations of the naira was one of the greatest problems being faced by traders.

    “When you buy something, you cannot get change. There are instances where customers change their minds about buying items because of change.

    “As a trader, you lend another trader change and he cannot give you back when you need it. This has led to a lot of crisis in the market. So we are happy that the CBN has come up with this plan,’’ he said.

    Okoro said the CBN had agreed to make the notes available to traders on a weekly basis, saying the volume depends on the market demand.

  • Banks must settle customers’ complaints within 2 weeks – CBN

    Banks must settle customers’ complaints within 2 weeks – CBN

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

    Mr Tajudeen Ahmed, The CBN Head of Complaints Management Division, said this in an interview with the News Agency of Nigeria in Abuja.

    He said the CBN would ensure that bank customers received redress on issues of excess charges or unauthorised withdrawal.

    Ahmed reiterated the apex bank’s commitment to eradicate short payment of interests and end the culture of excess and arbitrary charges.

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

    He explained that any charge outside what is contained in the circular was not allowed and should not be charged.

    “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 of that complaint.

    “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 find solution to that 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 disgruntled bank customers to visit any branch of the CBN closest to them to lay their complaints.

    “The CBN continually engages the banks to find out if their conducts 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 faulted banks for setting a limit on ATM withdrawals to get customers to make several withdrawals to cash large sums.

    “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 that 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.

     

  • 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.

  • CBN, RMAFC oppose creation of Assets Management Agency

    CBN, RMAFC oppose creation of Assets Management Agency

    The Central Bank of Nigeria (CBN) and the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) on Tuesday, expressed opposition to the planned creation of a new agency to manage assets seized from corruption and other criminal cases.

    The agencies made their stance known in Abuja at a public hearing organised by the House Committee on Banking and Currency on a bill seeking to establish the Nigerian Assets Management Agency (NAMA) to manage government assets, including those seized, forfeited or taken over by anti-graft and other federal security agencies.

    Mr Godwin Emefiele, CBN Governor, advised the House to either consolidate the bill with the Senate’s Proceeds of Crimes Recovery and Management Agency Bill or drop it.

    Emefiele, who was represented by CBN Assistant Director, Legal, Mr Henry Forma, said the bill before the Senate appeared more comprehensive, adding that the two bills should be consolidated into one since they are similar.

    He stated that issues covered in the Senate bill were duplicated in the bill being considered by the House.

    “In view of the foregoing, it’s our recommendation that, in order to avoid an inevitable conflict that will arise if the Proceeds of Crime bill and the bill for the establishment of the Nigerian Assets Management Agency were to be passed into law, the House committee should obtain and adopt the Senate bill which adequately covers all the matters contained in the (House) bill,” Emefiele said.

    The CBN governor argued that since the nature of the asset recovery envisaged in the House bill was uncertain and unpredictable because of its dependent on the commission of crimes that may involve the recovery of stolen government assets or forfeiture of crime proceeds, it may not be financially prudent to establish an agency that may become at some point redundant and a waste of scarce public resources.

    “The establishment of the agency would also add to the already bloated cost of governance in Nigeria.

    “The House committee may wish to apportion the functions of the proposed agency to an existing agency of government with a structure that can accommodate the envisaged functions of the agency such as the EFCC,” he said.

    In his submission, acting Chairman, Revenue Mobilization Allocation and Fiscal Commission (RMAFC), Mr Shettima Gana, who also opposed the establishment of the new agency, said the functions of the proposed agency should be transferred to Assets Management Company of Nigeria (AMCON) or the EFCC which already have existing structures.

    He said that following government’s determination in 2011 to reduce the number of agencies, the establishment of a new agency to manage all assets seized, forfeited or taken over by federal security bodies would not only increase the cost of governance, but amount to duplication of the functions of an existing agency.

    Earlier, Chairman of the Committee, Rep. Jones Onyereri, explained that the idea behind the bill was to provide for an agency that would be responsible for taking and managing Federal Government’s owned assets.

    He added that the assets included but not limited to assets acquired through court orders, forfeitures and seizures by federal agencies.

    “Prior to now, such assets were scattered among different agencies without proper coordination as to their real value and earnings from disposal of such assets,” Onyereri said.

     

  • CBN injects fresh $210m into foreign exchange market

    CBN injects fresh $210m into foreign exchange market

    …as Naira exchanges for $1/N360

    The Central Bank of Nigeria (CBN) has provided fresh 210 million dollars to meet customers’ requests in various segments of the foreign exchange market.

    The Bank’s Acting Director, Corporate Communications Department, Mr Isaac Okorafor in a statement on Monday in Abuja, said that 100 million dollars was offered to authorised dealers in the wholesale segment of the market.

    Okorafor said that the Small and Medium Enterprises (SMEs) segment got 55 million dollars, while customers in need of foreign exchange for tuition fees, medical payments and Basic Travel Allowance (BTA), were allocated 55 million dollars.

    Okorafor reiterated the CBN’s commitment to continuous intervention in the interbank foreign exchange market, in line with its pledge to sustain liquidity in the market and maintain stability.

    He said that the CBN would continue to strategically manage the foreign exchange market with a view to reducing the country’s import bills and halting depletion of its foreign reserves.

    On Feb. 12, the CBN had intervened to the tune of 210 million dollars to cater for requests in the various segments of the market.

    Meanwhile, the naira continued its stability in the foreign exchange market, exchanging at an average of N360 to a dollar in the Bureau De Change segment of the market.

  • 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.”

     

     

  • 2019: Former CBN deputy governor, Moghalu declares interest for presidency

    A former Deputy Governor of the CBN, Prof. Kingsley Moghalu, announced on Monday that he was consulting widely to run for the presidency in 2019.

    Moghalu told political correspondents in Lagos that time had come for technocrats, intellectuals and experienced people to take power from Nigeria’s career politicians.

    He said that he would not be deterred from joining the race, in spite of speculations that 2023 was the year slated for Igbos to have a shot at the presidency.

    Moghalu argued that politics in Nigeria should be detribalised for Africa’s most populous nation to grow and take its rightful place in the comity of nations.

    `It is the turn of any competent Nigerian to aspire for the post of presidency because career politicians have failed Nigeria.’’

    He said that zoning, which had been used by the major political parties, might have been relevant in the past but that it was no longer necessary because competence should be placed above tribe in present day Nigeria.

    “Zoning was an internal arrangement by political parties that was not constitutional. It should no longer matter where the president comes from.

    “The future of Nigeria rests in technocratic interventions. We need thinking people that will take Nigeria from the politics of stomach infrastructure to politics of mental infrastructure.’’

    The former CBN chief said that the first part to progress for Nigeria was for the people to begin to think differently and beyond tribe in choosing those who would lead them.

    Speaking on a second term for President Muhammadu Buhari, Moghalu said that the president had constitutional rights to seek re-election.

    “I don’t fathom how anyone can say the president should not run for a second term. It is his choice, the decision on who becomes Nigeria’s president in 2019 rests with Nigerians. ‘’

    On the nation’s economy, the economist pointed out that “the economy was in a delicate situation before the present administration.

    “The handling of the forex crisis though was misguided. The drop in oil prices actually affected the value of our currency but government should have simply allowed the naira to find its true value which would have reduced the inflation rate.’’

    He said that Nigeria must look beyond continued dependence on oil and encourage independent institutions to flourish.

    Moghalu, however, advised Nigerians to eschew docility and become more forceful in demanding accountability from their leaders at all levels of governance.

    The News Agency of Nigeria (NAN) reports that Moghalu, who served as CBN deputy governor from 2009 to 2014, is a political economist, lawyer and a former United Nations official.

    He was also a professor of practice in international business and public policy at the Fletcher School of Law and Diplomacy at Tufts University in Massachusetts, U.S.

    Born on May 7, 1963, Moghalu is a graduate of the London School of Economics. He also read Political Science at the University of Nigeria Nsukka.

  • CBN to sanction non-compliant exporters of Forex

    The Bankers’ Committee on Tuesday announced the commencement of sanctions against exporters who fail to repatriate foreign exchange (forex) proceeds from their business into the economy.

    The sanctions will be implemented by the Central Bank of Nigeria (CBN).

    Addressing newsmen at the end of the Bankers’ Committee meeting in Lagos, Citibank Nigeria Managing Director/CEO Akin Dawodu spoke of a provision in the Central Bank of Nigeria (CBN) Foreign Exchange Manual that mandates all exporters to repatriate export proceeds back to the country to support the local currency and the economy.

    There is a 90-day grace period during which all proceeds from non-oil exports must be repatriated to the country and all arrears cleared. Dawodu said after the moratorium, non-compliant exporters will be blacklisted and banned from accessing banking services as well as forex from the CBN.

    He said repatriating export proceeds will boost Nigeria’s balance of trade.

    Also speaking, CBN Director, Banking Supervision, Abdullahi Ahmad, said the apex bank is monitoring non-oil exporters and assessing compliance levels. “The period of grace is gone and now is the time for heavy sanctions against defaulters. Defaulters will be banned from accessing banking services,” he said.

    Nigeria’s foreign exchange reserves have hit $42 billion, according to Ahmad, who added that the economy remained at its lowest risk rating at present.

    “Nigeria’s capital market is the best in the world; inflation has been coming down, even as Gross Domestic Product (GDP) growth is expected to be sustained above two per cent,” he said.

    External reserve was $40.4 billion as at last December. The last time the foreign reserves hit the $40 billion mark was January 2014, about five months before the crash in global oil prices. In September 2008, the country’s foreign exchange reserves hit $62 billion, with the Federal Government spending $12 billion from it to settle external debts.

    FSDH Merchant Bank Managing Director Mrs. Hamda Ambah said the Bankers’ Committee also adopted a unified rate N360/$ for all Personal Travel Allowances (PTAs), Basic Travel Allowances (BTAs), school fees and transactions without commission.

    She said the committee also urged bank customers to report any defaulting lender for appropriate sanctions. The banks are to buy dollar from the CBN at N357/$1 and sell to end-users at N360/$1.

    According to the CBN manual, proceeds of oil and non-oil exports are to be repatriated into the export proceeds domiciliary accounts of their exporters’ accounts within 90 days for oil exports and 180 days for non-oil exports. Where this policy is violated, the collecting bank will be liable to a fine of 10 per cent of the Free On Board value of the transaction, including other appropriate penalties as provided in the Banks and Other Financial Institutions Act (BOFIA).

    Likewise, where the exporter fails to repatriate the proceeds into the domiciliary account within the stipulated period, the exporter will be barred from participating in all the segments of foreign exchange market in Nigeria.

    Ahmad said many exporters, who benefited from Federal Government support scheme, have continually failed to comply with this directive. The defaulters will be barred from accessing other banking services.

    To Ahmad, since the CBN is taking strategic steps to ensure that Nigerian exporters’ businesses thrive, not sending earned dollar back to the economy is not proper.

     

  • CBN injects fresh $210m into forex market

    The Central Bank of Nigeria (CBN) has injected another sum of $210million into the inter-bank Foreign Exchange Market in its desire to ensure the availability of forex and also meet customers’ requests in various segments of the market.

    Information from the CBN on Monday showed that the CBN offered $100million to authorized dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment received the sum of $55 million. Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated the sum of $55 million.

    Acting Director, Corporate Communications Department (CCD) of the CBN, Mr. Isaac Okorafor, confirmed the figures, adding that those who made bids in the wholesale window would receive value for the bids on Tuesday, February 06, 2018.

    Okorafor reassured the public that the Bank would continue to intervene in the interbank foreign exchange market in line with its quest to sustain liquidity in the market and maintain stability. He added that the steps taken so far by the Bank in the management of forex had paid off, as reflected by reduction in the country’s import bills and accretion to its foreign reserves.

    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 Monday, February 05, 2018.