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CBN

  • CBN recovers N50bn excess charges from banks

    …urges customers to report banks charging above recommended charges

    The Central Bank of Nigeria (CBN) said on Wednesday it has recovered over N50 billion from banks in excess charges imposed on customers in the last three years.

    This amount, the CBN said has been returned to bank customers who suffered from these excessive charges.

    Speaking at the ongoing Abuja International Trade fair, the Acting Director of Corporate Communications at the CBN, Mr. Isaac Okorafor, said the apex bank was committed to ensuring that bank customers are not burdened with excessive charges from their banks.

    Okorafor urged bank customers to go to the CBN website to see the approved charges required by banks.

    Besides visiting the website, Okorafor advised the banking public to report excessive charges they feel their banks had imposed on them.

    The CBN spokesman also said the apex bank has so far disbursed N43.92 billion to local farmers through the Anchor Borrowers’ Programme (ABP), an agricultural intervention programme initiated by the bank.

    Okorafor said the programme was done in partnership with 13 participating financial institutions with over 200,000 small holder farmers from 29 states.

     

  • CBN bans banks from taking SMS charges on bulk transfers

    Indications emerge over the weekend that commercial banks can no longer take Short Message Service (SMS) charges on bulk bank transfers done through the Real Time Gross Settlement (RTGS).

    TheNewsGuru.com reports that the Real Time Gross Settlement systems (RTGS) is a funds transfer system where money transfer takes place from one bank to another on a “real time” basis and “gross” basis. Settlement in the “real time” means that the transaction happens almost immediately.

    The banks were previously charging N4 per transaction or text message fee on all bulk transfers, but were directed by the Central Bank of Nigeria (CBN) to halt such fees in the interest of customers.

    TheNewsGuru.com reports that the CBN’s directive has further cut banks’ multiple revenue streams that form a major part of the huge profits they declared in recent years.

    An official in one of the leading commercial banks confided in TheNewsGuru.com that most salary accounts that are funded through bulk transfers are no longer getting transaction alerts because the fee cannot be absorbed by customers or charged on their accounts.

    He noted that banks had started complying with the CBN directive while customers under such arrangements are expected to use bank-specific digital codes to check their account balances as they can no longer get bulk-transfers related transaction alerts.

    TheNewsGuru.com reports that the Nigerian Communications Commission (NCC) had earlier directed that any person subscribing to any of the Nigerian GSM networks must not be charged more than N4 for SMS, sent to other networks. The NCC set a price cap of N4 per message for all domestic Off-Net Messaging Service in line with Sections 4 and Chapter V11 of the Nigerian Communications Act (NCA), 2003.

    Speaking on e-payment at a meeting with financial journalists in Lagos, CBN Director, Banking & Payments System Department, ‘Dipo Fatokun, described e-payment as any form of payment that allows the use of electronics system to initiate, authorise and confirm the transfer of money between two parties.

    The transaction reason, he said, could be for the payment for goods and services, settlement of obligations, gifts among others.

    He explained that e-payments are driven by a network of interconnected systems, which make it possible for exchanges of value between payer and payee, sender and receivers or donor and donee.

    “Banks, Payment Service Providers (PSPs), Financial Authorities and Central Banks play various roles in developing the payments system infrastructure to drive electronic payments, that is nationally utilized. The e— payments industry refers to all stakeholders, operators, regulators, infrastructures, merchants, retailers and the final consumers of the payments products and services. Payment technologies and platforms bind the industry together in a tight ecosystem,” he said.

    Fatokun disclosed that global non-cash (electronic payment) transaction volumes grew at 8.9 per cent to reach $387.3 billion in 2014, an increase, driven by accelerated growth in developing markets.

    “Cards have been the fastest growing payments instrument since 2010, as cheque use has declined consistently and significantly. Debit cards accounted for the highest share (45.7 per cent) of global e-payment transactions and were also the fastest growing (12.8 per cent) payments instrument in 2014,” he said.

    According to him, global non-cash volumes are estimated to have grown by 10.1 per cent to reach $426.3 billion in 2015, aided by high growth in emerging economies across the world, including Africa even as the Nigerian e-payments industry has been evolving in line with the evolution in global payments in both Wholesale and Retail systems.

    “Banks, PSPs, and the CBN have played various roles in developing the payments system and creating products and channels for electronic payments. The Retail Payments Transformation Programme of the CBN has led to the introduction of various electronic payments products and services by operators in the industry. The electronic products are gradually reducing the usage of cheques and cash, as noticed consistently in the annual performance report since the inception of the Cash-less Policy in 2012,” he said.

    He said the volume and value of transactions based on cheques and National Electronic Funds Transfer (NEFT) have been consistently reducing yearly since 2013, while same data for the Nigeria Interbank Settlement System- NIBSS Instant Payment (NIP), Automated Teller Machine (ATM), and mobile money channels have been on the increase. This is an indication of users’ preference for instant value channels over non-instant payment channels.

    “The ATM Channel accounts for the highest volume of transactions, while the NIP accounts for the highest value of transactions annually. This is because the ATM is usually the e-payment channel that new and lower value account holders always interface with, while corporates and upwardly mobile middle class customers make transfers using NIP,” he said.

    The CBN director disclosed that banks and other e-payment service providers operate in a highly regulated environment. “Regulation is necessary to ensure that operators focus on delivering products and services that enable compliance, efficiency, financial stability and a positive customer experience. The attempt to regulate electronic payments in Nigeria started with the CBN Electronic Banking Guidelines, issued in August 2003,” he said.

    Also, in furtherance of its effort to promote and facilitate the development of efficient and effective systems for the settlement of transactions, including the development of electronic payments system, the CBN has since 2008, issued and reviewed several e-payment related framework, guidelines and circulars.

  • Provide audit reports on TSA in six weeks, Reps tell CBN, Auditor General

    The House of Representatives on Wednesday mandated the Central Bank of Nigeria (CBN) and the Office of the Auditor General of the Federation (OAGF) six weeks to provide it with detailed reconciliation and audit reports of the amounts generated so far in the Treasury Single Account (TSA).

    The House said it’s ultimatum was necessitated by the need to know the current and true status of the TSA going by reports that not all Ministries, Departments and Agencies (MDA) have complied with the August 2015 directives of the Federal government on the policy.

    The Abubakar Danburam-led ad-hoc committee investigating the status of the TSA said the November 10 deadline is sacrosanct, adding that all money banked in the country are not excluded as long as they have MDAs’ account with them.

    The Committee held a closed door meeting with officials from the Office of the Accountant General of the Federation (OAGF), Auditor General’s office as well as CBN and some commercial banks.

    According to the Chairman, the Committee was forced to take the decision following the revelation of the Director of Funds, Accountant General’s office Alexander Adeyemi that there were still leakages in collecting funds from agencies despite the existence of TSA.

    It would be recalled that the Committee was told last month that the TSA has not been audited by the office of the Auditor General since its inception two years ago.

     

  • Forex: CBN boosts market with $195m ahead of MPC decisions

    …as Naira exchanges for N363/1$ at the parallel market

    The Central Bank of Nigeria (CBN) on Monday boosted the Foreign Exchange (Forex) market by offering a 195 million dollars in three segments of the Forex market.

    The acting Director of Corporate Communications, Mr Isaac Okorafor, in a statement, said it auctioned 100 million dollars at the wholesale Secondary Market Intervention Sales (SMIS) window of the inter-bank Foreign Exchange market.

    He said that the apex bank also intervened in the Small and Medium Enterprises (SMEs) and invisible segments, with 50 million dollars and 45 million dollars.

    Okorafor reiterated that the Bank’s intervention was to maintain its commitment to sustain liquidity in the market to meet genuine requests as well as deepen flexibility in the foreign exchange market.

    He said the CBN would continue to work on achieving the objective of convergence of rates in the various segments of the market, and would continue to strive that the forex market guaranteed transparency in the sale of foreign exchange.

    Okorafor said only last week, the CBN threatened to sanction any Deposit Money Bank (DMB) in breach of its earlier directive of March 3.

    The directive instructed them to, among other things, open teller points for retail Forex transactions and to have electronic display boards in all their branches, showing rates of all trading currencies.

    He said the bank’s firm position was to reiterate its commitment to ensure liquidity in the foreign exchange market, where all genuine requests would be met in line with extant forex guidelines, noting that it would foster more transparency and make the public become aware that the facilities existed.

    This week’s intervention is significant, coming in the midst of the Monetary Policy Committee Meeting taking place on Monday and Tuesday.

    Monday’s sale follows the major intervention, last week, to the tune of 545 million dollars as the retail Secondary Market Intervention Sales (SMIS) received the largest intervention of 285 million dollars.

    Other segments include the 100 million dollars offered for wholesale SMIS, 90 million dollars for Small and Medium Enterprises (SMEs) window and 70 million dollars for invisibles such as Basic Travel Allowances, tuition fees and medical payments.

    TheNewsGuru.com reports that the Naira on Monday closed at N363 to a dollar, N485 to the Pound Sterling and N433 to one Euro at the parallel market.

     

  • Depositors are real owners of banks, not you – CBN tells bank directors

    The Central Bank of Nigeria, CBN, has warned directors of commercial banks who treat bank depositors with disdain to desist from such unprofessional conducts or face sanctions.

    The apex bank also frowned at insider abuses perpetrated by executives of the bank.

    The Governor of the apex bank, Godwin Emefiele said this on Tuesday at this year’s edition of the CBN-Financial Institutions Training Centre (FITC) Continuous Education Programme for Directors of Banks and Other Financial Institutions.

    Emefiele, who spoke on the theme: “The Next Level of Corporate Governance Practice”, said fit and proper persons should be appointed into the boards of banks, adding that corporate governance is undoubtedly an essential pillar in financial system stability.

    He said the failure of banks’ boards in carrying out their oversight functions by checking management excessive risk taking, conflict of interest, undue concentration on short term gains and excessive executive compensation fundamentally affect the ability of financial institutions to meet their core mandates.

    The CBN boss directed independent bank directors to rise up to their responsibilities and be the conscience of their institutions in the interest of depositors and minority shareholders. “Independent directors do not need to be friends of the managing directors. They can’t fire you but the CBN can remove you if you don’t do your job well,” he said.

    Emefiele said banking needed independent directors who “are bold, sound and experienced to do what we want them to do.”

    Emefiele said the CBN will get tougher on insider related loans, adding that many bank chiefs and executive directors borrow from the banks at very low interest rates.

    He said banks are not owned by shareholders who he said were simply used by God to establish them. He said depositors funds are 10 times higher than shareholders’ funds, hence the interest of the depositors should be paramount. “A bank managing director who feels he set up the bank has only been used by God to set up such bank. The real owners of the banks are depositors,” he said.

    The apex bank chief noted that though shareholders are important to banking, the most important stakeholders are the depositors. “It is important for us to ensure we all protect them. That is why in the programme, we said that independent directors must remain independent and perform their roles and responsibilities, no matter how tough it is. They have to look at insiders who are shareholders and tell them what is good and what is not right. Yes, we are going tough because it is a dynamic environment and we will continue to take drastic actions against that insider abuse,” he said.

    He spoke of a bank with 4.5 million depositors that the CBN is monitoring but has decided the lender will not be allowed to go down.

    “If we allow the bank to go down, how can we explain to the 4.5 million customers that their money is lost? The impact of such closure on the economy will be tough,” the CBN boss said.

    To him, running an efficient and sound bank is all about strong governance, adding that weak governance ensues when shareholders employ inexperienced or unenlightened people to run their banks.

    “Weak governance will ensure that liquidity position in banks is eroded. We want to make sure that banks remain strong by ensuring that strong governance exists. It is also about checking your conscience to tell yourself, have you performed your role diligently, that you are not only serving your own interest as shareholders but also serving the interest of larger stakeholders? These are some of the issues we will be looking at going forward because those depositors are very important,” he added.

    ”It encompasses the protection of minority shareholders, disclosure provisions, the role and structure of the board, complexity on the definition of related parties, compensation structures and much more. Therefore weak corporate governance can undermine financial stability by heightening vulnerability of financial institutions to external shocks,” he said.

    He said institutions with sound corporate governance and effective board oversights are more resilient to shocks and operate more profitably. “Given the crucial financial intermediation role which banks and other financial institutions play in the economy, corporate governance for financial institutions is, arguably, of great importance in contrast to governance in non-financial companies,” he said.

    He said that prior to the global financial crisis of 2007 to 2009, it was taken for granted that the banking sector in Nigeria was safe and sound. However, this trust proved to be misplaced as it was realised that none of the 25 banks that scaled the CBN consolidation exercise was immuned from failure if they operated in a poor corporate governance environment.

    Accordingly, the 2014 CBN Code of Corporate Governance for Banks and Discount Houses (an improvement on the 2006 Code) was one of many responses to the industry’s post-consolidation corporate governance challenges arising largely from the integration processes. The mass enlightenment on corporate governance in the industry today could very well be attributed to the issuance of the CBN Code. The implementation of the Code largely addressed ineffective board oversights; overbearing influences of chairmen on MDs/CEOs; weak internal controls and prolonged tenure on the board amongst other anomalies.

    “While appreciable momentum had been attained in corporate governance practices in the Nigerian Banking Industry, we need not rest on our oars as vulnerabilities are still evident. The recent economic recession has shown that the financial industry still harbours weaknesses in governance, exemplified by instances of unclear rendition of returns, corporate governance abuses, such as unreported losses, huge exit packages for directors, insider non-performing loans, over-domineering executive management, contravention of regulatory/prudential guidelines and lending limits, poorly appraised credits and weakening of shareholders’ funds among others. Overall, the huge challenge of ‘key-man’ risk abound in our industry,” Emefiele said.

     

  • We’ll implement policies to ensure Nigeria recovers fast from recession – Emefiele

    The Governor of Central Bank of Nigeria, CBN, Godwin Emefiele has said the apex bank will ensure the implementation of policies that will further improve the nation’s economy especially now that it has exited recession.

    Emefiele revealed at the CBN’s 24th seminar for finance correspondents and editors in Awka, Anambra State on Wednesday. Emefiele noted that he is “hugely optimistic that improved outcomes will be recorded in our work towards taming inflation, bringing down interest rates and guaranteeing exchange rate stability.”

    To achieve this, the CBN, he said is “consistently devising ingenious approaches to solve our peculiar challenges and will continue to learn from the experiences of other countries, particularly developing nations.”

    Emefiele however lamented that “the major challenge has been structurally-induced inflation, which has presented a dilemma to policy makers on whether to align the rates with socially desired or policy consistent outcomes.”

    To address these challenges, the CBN he said “has embarked on massive monetary stimulus through direct interventions in sectors that hold immense benefits for the broader economy.”

    Such interventions have been in agriculture, micro, medium and small scale enterprises (MSMEs), power sector, aviation and youth entrepreneurship, among others.

    These measures he said were necessitated by the liquidity (and credit) crunch that followed the global financial crises.

    The CBN, Emefiele said “has consistently sought to formulate interest and exchange rate policies that are conducive to the development of domestic private industrial activities, while taking due cognizance of other macroeconomic variables.”

    Speaking on foreign exchange (forex) and interest rate developments in the country, Emefiele said the apex bank recently introduced flexbile forex regime, with forex restrictions placed on the importation of 41 items.

    “This became inevitable in order to curtail fast depleting foreign reserves, occasioned by the significant demand for imports in Nigeria,” he said.

    The CBN, he added, “has consistently supported the economy with robust supply of foreign exchange to deposit money banks (DMBs) particularly to meet demands for invisibles such as school fees, medical tourism and personal travelling allowance. This has led to stability in the naira exchange rate against the US Dollar.”

    Emefiele warned that fundamentals of the domestic environment needed to be promoted to support domestic production and invariably curtail imports.

    To this end, the CBN he said “has consistently sought to formulate interest and exchange rate policies that are conducive to the development of domestic private industrial activities, while taking due cognizance of other macroeconomic variables.”

    The CBN he assured will continue to explore further avenues to ensure that interest rates are supportive of domestic production needs.

    While the “Bank will continually fine tune measures to ensure and guarantee a stable exchange rate regime. With on-going recovery in economic performance.”

  • Forex: CBN launches e-CCI for transparency, efficiency

    As part of deliberate administrative efforts to ensure transparency, efficiency and accountability in the foreign exchange market, the Central Bank of Nigeria, CBN has instructed banks and other authorized dealers to implement electronic Certificate of Capital Importation (eCCI) for foreign investors.

    TheNewsGuru.com reports that the Certificate of Capital Importation is given to foreign investors to confirm the level of investment they have brought into the country. The certificate has always been on hard copy until this policy shift.

    The eCCI implementation, which takes effect from Monday is expected to boost transparency and enhance confidence of foreign investors in the local market. The foreign investors constitute about 70 per cent of the total transaction turnover in the capital market.

    The eCCI would enable foreign investors to easily find out the status of their investments in the country, increase transaction efficiency and ensure that investors get adequate returns on their investments.

    In a circular to all authorised dealers, CBN Director, Trade and Exchange Department, W.D. Gotring, said: “In a bid to enhance transparency and efficient processing of foreign investment flows to the country, the CBN informed all authorized dealers and the public of the deployment of electronic Certificate of Capital Importation (eCCI) platform”.

    Continuing, he said the eCCI shall replace the hard copy of CCI normally issued in respect of all capital inflows either in form of cash or machinery/ equipment.

    “The policy, takes effect from tomorrow, meaning that from this date, processing of all Certificate of Capital Importation in Nigeria shall only be done electronically on the eCCI platform,” he added.

  • CBN injects fresh $250m to lift naira

    CBN injects fresh $250m to lift naira

    The Central Bank of Nigeria on Tuesday injected $250m into the various segments of the inter-bank foreign exchange market, in order to lift the naira against other major currencies.

    Figures obtained from the CBN indicated that the Retail Secondary Market Intervention Sales segment of the market received the highest intervention with a total of $100m, the Small and Medium Enterprises window received a boost of $80m while the invisibles segment, comprising Business/Personal Travel Allowances, school tuition, medicals, among others was allocated the sum of $70m to meet the demands of customers.

    The bank’s spokesman, Isaac Okorafor, noted that the second quarter report by the National Bureau of Statistics indicated that Nigeria had gotten out of recession.

    While hinging part of the success to the regular intervention of the CBN in the forex market to boost liquidity in the market, Okorafor said the timely execution and settlement for eligible transactions as well as the forex available to the real sector and industrial capacities were factors that boosted the economy.

    He recalled that the CBN Governor, Mr. Godwin Emefiele, had a few months ago predicted that the Nigerian economy would be out of recession at the end of the third quarter.

    The CBN reportedly injected $297m into the Retail Secondary Market Intervention Sales segment, raising the total intervention for the week to the sum of $547m.

  • Lai Mohammed calls on CBN to promote entertainment industry

    Lai Mohammed calls on CBN to promote entertainment industry

    The Minister of Information and Culture, Lai Mohammed, has appealed to the Central Bank of Nigeria, CBN, to replicate in the Creative Industry the role it played in promoting the agriculture and health sectors.

     

    The Minister made the appeal in Abuja on Tuesday when he led patrons in the Creative Industry to make a presentation to the CBN Governor, Godwin Emefiele, on the challenges and prospects of the industry.

     

    According to him: “I have watched over the years how the Central Bank has really been the catalyst in promoting agriculture, the health sector and the like and we believe that by the time we give you our short presentation, you will see why we have come here and we have made you our first stop to further enlist the support of the government to create that enabling environment,” he said.

     

    Mohammed emphasized on the need to change the perception about the Creative Industry as a mere entertainment instead of being a huge economic venture with the capacity to create wealth.

     

    “We need to change the perception about the industry. When people hear the Creative Industry, they think about entertainment. Yes, it’s correct but it’s also very big business. It’s an economy which we have not exploited enough. It’s an economy which is probably more sustainable than our traditional economy. It’s an economy that has the potential to employ more people and create more wealth on a long term basis,” he said.

    The Minister said as part of efforts to protect the income stream of the sector, the Ministry of Information and Culture, in partnership with the stakeholders, has taken a giant step by kick-starting a sustained fight against the piracy of intellectual property.

     

    He said through the support of the Inspector General of Police, Anti-Piracy Units have been set up in all police commands and the Federal Capital Territory, adding that the recent raids carried out at

    Alaba market in furthering of the anti-piracy campaign led to the confiscation of pirated products worth millions of Naira.

     

     

    In his remarks, the CBN Governor said government has a responsibility to support the development of talents and creativity as a deliberate policy to create jobs.

    He noted that the Service Sector, of which the Creative Industry is a part, contributes 54 per cent of the country’s GDP, saying the Industry has a potential for growth, especially if a deliberate effort is made to protect talents and intellectual property

    Mr. Emefiele said the huge potentials of the Creative industry will not be realized unless the issue of piracy is tackled decisively.

     

     

  • Foreign reserves hit 30-month high at $31.6b – CBN

    …as apex bank injects $297m into forex market

    The nation’s foreign exchange reserves have stood at a 30-month high at $31.59 billion, as at August 18. The Central Bank of Nigeria (CBN) data have shown.

    Nigeria’s dollar reserves have climbed back to a level they last reached in January 2015, shortly before the general elections. The bank, however, did not provide the reason for the increase.

    Nigerian assets, largely shunned by foreign investors over the past three years, have attracted significant amounts of capital after the CBN in April liberalised the exchange rate for investors.

    The forex buffer stood at $25.73 billion, up by 20.77 per cent from a year ago, but is still far off a peak of $64 billion hit in August 2008.

    Also, the CBN boosted the naira on Thursday when it injected $297 million into the Retail Secondary Market Intervention Sales (SMIS) segment of the forex market raising the total intervention for the week to $547 million.

    Confirming the figures, the CBN spokesman, Isaac Okorafor, disclosed that the bank was resolute in its determination to intervene in the forex market with the aim of uplifting the naira exchange rate, boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

    Okoroafor, an acting director in the Corporate Communication department of the apex bank, expressed confidence that the interventions would continue to guarantee stability in the market and ensure forex availability to individuals and business concerns with genuine demand.

    The CBN had earlier intervened in the Inter-Bank Foreign Exchange Market to the tune of $195 million in three segments of the market. In the wholesale segment of the inter-bank Forex market, it sold $100m and uplifted the Small and Medium Enterprises (SMEs) and invisible segments, with $50 million and $45 million respectively.

    Responding to enquiries earlier in the week, Okoroafor had hinted that the apex bank would increase liquidity in the market in the coming days, noting that the move was necessary to enhance stability in the forex market.