TheNewsGuru

Tag: Commercial Banks

  • Naira redesign: How APC Govs. outmanoeuvred CBN to extend deadline for old notes

    Naira redesign: How APC Govs. outmanoeuvred CBN to extend deadline for old notes

    The Federal Government has filed a suit challenging the Supreme Court’s ruling on Wednesday which granted the relief sought by three All Progressives Congress (APC) governors to extend the deadline for the use of the old naira notes beyond February 10, 2023.

    The Governor of Central Bank Nigeria Godwin Emefiele, had announced February 10 as the new deadline for the legal tender status of the old N1000, N500 and N200 notes following a public outcry that trailed the scarcity of the new naira banknotes less than 48 hours to the initial target date of January 31.

    However, contrary to expectations, the extension has not improve circulation of the new notes as commercial banks reportedly restrict cash flow, forcing citizens to buy back their savings from agents such as Point of Sale (POS) operators, for between 10-30 per cent of the amount needed.

    Consequently, Governors Nasir El-Rfai of Kaduna, Yahaya Bello of Kogi and Bello Matawalle of Zamfara, approached the Supreme Court to restrain the federal government through the CBN from enforcing the February 10th deadline, listing the Attorney-General of the Federation (AGF) Abubakar Malami, as the sole defendant.

    The Governors through their legal counsel Abdulrakeem Mustapha argued that many citizens were yet to see the newly redesigned naira notes let alone participate in the cash swap programme, despite assurances by the government to make the currency available.

    A seven-member panel led by Justice John Okoro, granted the relief sought by issuing an order of Interim Injunction restraining the federal government from enforcing the February 10 deadline, pending the hearing and determination of their motion on notice for interlocutory injunction on February 15th.

    The ruling came two days after a federal capital territory (FCT) High Court delivered a ruling compelling the CBN to go ahead with the full implementation of the naira redesign policy.

    The judge of the FCT high court Eleojo Enenche, also ordered the CBN not to extend the deadline pending the determination of the suit.

    “An order of interim injunction is hereby made restraining the defendants whether by themselves, staff, agents, officers, interfacing banks or whosoever not to suspend, stop, extend, vary or interfere with the extant termination date of use of the old N200, N500, and N1000 bank note being 10th day of February, 2023, pending the hearing and determination of the motion on notice,” the court held.

    Reacting to Wednesday’s counter-ruling, the Minister of Justice said that the Supreme Court lacked jurisdiction to entertain the matter since it was not a dispute between the federation and the state governments, but merely an issue about CBN’s policy and asked the court to dismiss the suit.

    Similarly, a former Chairman of the Nigerian Electricity Regulatory Commission (NERC) Sam Amadi, also queried the Supreme Court’s ruling: “Why can’t the Supreme Court adjourn for a day and hear the matter on merit? Why issue an exparte order that invariably grants the main relief?”

    But human rights lawyer Inibehe Effiong, expressed the view that the new Naira notes and the limits on cash transactions and withdrawal was a threat to corrupt political actors who are planning to buy votes during the February 25th election.

    Effiong also accused commercial banks in the country of “economic terrorism”, saying that the banks were working for some criminal elements and profiting from the suffering of citizens.

    He tweeted: “Yahaya Bello and El-Rufai are suddenly governors that care about the masses and public opinion? El-Rufai that has demolished the homes of people, sacked workers and opposed industrial actions by labour unions is suddenly interested in hardship occasioned by new Naira notes? ?”

     

  • CBN releases guidelines for operation of neutral cash hubs

    CBN releases guidelines for operation of neutral cash hubs

    Central Bank of Nigeria, CBN, has released guidelines for the operation of the bank’s neutral cash hubs.

     

    The operation would ease huge cash management and deepen financial inclusion, it was gathered.

     

    In a statement on its website, the CBN said that the release of the guidelines is in furtherance of its mandate to promote a sound financial system in Nigeria.

     

    CBN stated it is part of its collaborative efforts with the Banker’s Committee to reduce cost and improve operational efficiency in the country’s cash management.

     

    “The CBN, in collaboration with the Banker’s Committee, initiated the Nigerian Cash Management System which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.

     

    “One initiative towards the stated goal is the introduction of BNCH.

     

    “BNCHs are cash collection centers to be established by registered processing companies or Deposit Money Banks (DMBs) based on business needs.

     

    “They will be located in areas with high volumes of commercial activities and cash transactions,” the apex bank said.

     

    It added that the hubs would provide platforms for customers to make cash deposits and receive value irrespective of the bank with which their accounts are domiciled.

     

    “This guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision.

     

    “The key objective is to reduce the risks and cost borne by banks, merchants, and huge cash handlers in the course of cash management activities.

     

    “It will also deepen financial inclusion and leverage on shared services to enhance cash management efficiency,” it said.

     

    According to the CBN guidelines, a BNCH is permitted to carry out activities like receipt of Naira denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash.

     

    “It can also carry out high volume cash disbursement to members of the public on behalf of financial institutions, and any other activities that may be permitted by the CBN.

     

    “But it is not permitted to carry out investing or lending activities, or receive, disburse, or engage in any transaction involving foreign currency,” the statement asserted.

     

    Calling on eligible promoters like DMBs and Cash Processing Companies (CPCs) to apply for registration of BNCH, the apex bank said “prospective promoters of BNCH shall apply in writing to the Director, Currency Operations Department.”

  • eNaira may reduce deposits in commercial banks, IMF warns CBN

    eNaira may reduce deposits in commercial banks, IMF warns CBN

    The International Monetary Fund has said the eNaira wallet may function as a deposit at the Central Bank of Nigeria and consequently reduce demand for deposits in commercial banks.

    The comment came barely four weeks after the President, Major General Muhammadu Buhari, and top officials of the central bank launched the eNaira at the State House, Abuja.

    As a result, the Washington-based fund on Tuesday warned the CBN to manage the various risks associated with the digital currency especially the threats it pose to monetary policy implementation, cyber security, among others.

    The IMF disclosed this in its ‘Country Focus; Five Observations on Nigeria’s Central Bank Digital Currency.’

    The global body said, “Like digital currencies elsewhere, the eNaira carries risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability.

    “For example, eNaira wallets may be perceived, or even effectively function, as a deposit at the central bank, which may reduce demand for deposits in commercial banks. Relying as it does on digital technology, there is a need to manage cyber security and operational risks associated with the eNaira.”

    According to the IMF, the launch of the digital currency is drawing interest from the global world, and other central banks because of the size and complexity of Nigeria’s economy.

    The organisation added that the eNaira uses the same blockchain technology as Bitcoin or Ethereum, but is not a financial asset like the two.

    The IMF noted that the e-Naira would increase financial inclusion, facilitate remission of remittances, and reduce informality.

    According to the fund, Nigeria has a large informal economy with transactions and employment equivalent to over half of the GDP and 80 per cent of employment, respectively.

    The IMF said, “The 2021 IMF Article IV mission emphasised the need for monitoring risks and macro-financial impacts associated with a central bank digital currency. The IMF is ready to collaborate with the authorities on data analysis, cross-country studies, sharing the eNaira experience with other countries, and discussing further evolution of the eNaira including its design, regulatory framework, and other aspects.”

  • Court orders 21 commercial banks not to release N11.9bn to fleeing couple accused of duping investors over N22bn

    Court orders 21 commercial banks not to release N11.9bn to fleeing couple accused of duping investors over N22bn

    A Lagos State High Court sitting at the Osborne area in Ikoyi has restrained all commercial banks in the country from releasing funds totalling N11.795 billion to Nigerian couple, Bamise and Elizabeth Ajetunmobi, who allegedly fled the country after duping investors of over N22 billion.

    The court also granted an order restraining the couple and the companies linked to them, Imagine Global Holding Company Limited and Imagine Global Solutions Limited, from accessing funds totalling N11,795,090,000 in their accounts pending the hearing and determination of the suit against them.

    Justice Toyin Oyekan-Abdullai granted an order of mareva injunction freezing the assets following an ex parte application filed on October 15 by the applicants through their counsel, Adetunji Adedoyin-Adeniyi.

    A mareva injunction, also known as a freezing or asset protection order, is one granted to prevent a defendant from dealing with the assets, moving or dissipating them while legal proceedings are on.

    The applicants are aggrieved Nigerians who heavily invested their funds in Imagine Global and according to court papers, the N11,795 billion is the outstanding investments and return on investments accruing to them from the defendants.

    In the interim, the court also barred the banks from dealing in any manner whatsoever with any and all monies and/or whatsoever assets due to the defendants from any account whatsoever maintained by the couple, and all accounts with BVN: 22168443525 (linked to the third defendant – Bamise Ajetunmobi) and BVN: 22141952749 (linked to the fourth defendant – Elizabeth Ajetunmobi), wherever situated up to the N11,795,090,000.

    It further restrained the defendants from selling, transferring, assigning and/or dealing with the following properties: Apartment 7, Oakwood Residences; 23, Cooper Street, Ikoyi, Lagos; B4, Gate 3, Lafiaji Road, Victoria Crescent Estate; Olugborogon; Chevron; Lekki; Lagos, or any other properties in the name of the first, second, third, and fourth defendants, or that can be traced and located by applicants during the pendency of the suit.

    The judge directed the banks to, within seven days, file and serve on the applicants’ counsel, an affidavit disclosing the balance contained in the defendants’ accounts.

    The applicants, on their part, are to file an undertaking as to damage in case the order ought not to have been made by the court.

    Justice Oyekan-Abdullahi, thereafter, adjourned the case till November 3.

    The banks affected include Guaranty Trust Bank, Access Bank, Citi Bank Nigeria, Ecobank Nigeria, Fidelity Bank, First Bank, First City Monument Bank, and Globus Bank.

    Others are Heritage Bank, Jaiz Bank, Keystone Bank, Polaris Bank, Providus Bank, Stanbic IBTC Bank, Standard Chartered Bank, Sterling Bank, Union Bank, United Bank For Africa, Unity Bank, Wema Bank, and Zenith Bank.

  • Forex malpractices: CBN threatens to suspend licences of commercial banks

    Forex malpractices: CBN threatens to suspend licences of commercial banks

    The Central Bank of Nigeria (CBN) has warned Deposit Money Banks (DMBs) to always observe due diligence and desist from all forms of malpractices in foreign exchange (FX) transactions.

    TheNewsGuru.com, TNG reports that the apex bank gave the warning in a letter by Ozoemena Nnaji, Director of Trade and Exchange Department, addressed to the DMBs.

    Nnaji urged the banks to, not only ensure to know their customers, but also to know their customers ‘ businesses.

    She said the directive was necessitated by recent occurrences in the FX market.

    “The CBN wishes to remind all banks that it is their responsibility to not only know their customers (KYC requirements) but also know their customers’ businesses (KYCB requirements).

    “Given this responsibility , and in view of recent occurrences in the market, the CBN will like to remind banks to desist from all forms of FX malpractices.

    “We wish to reiterate that FX operating licences of any bank or banks that are found culpable with ongoing investigations will be suspended for at least one year,” the director said.

    She urged all the DMBs concerned to take note and ensure compliance.

  • How 20 armed men attacked two commercial banks, killed officer in Osun – Police

    How 20 armed men attacked two commercial banks, killed officer in Osun – Police

    The Osun Police Command says it is on the trail of the armed robbers that attacked two commercial banks in Iree, Boripe Local Government Area of Osun, on Thursday.
    The police also confirmed that the robbers killed a police constabulary and carted away undisclosed sum of money during the operation.
    Osun Police Spokesperson, SP Yemisi Opalola, said in a statement that about 20 armed men carried out the attack in which four other civilians sustained gunshot injuries.
    “It is true that there was a bank robbery in Iree yesterday (Thursday) Aug.5, 2021 at about 15.40hrs (3:40p.m.).
    “The armed robbers, numbering about 20, came in commando-like style with about four vehicles and simultaneously attacked Iree Divisional Police Headquarters with explosives and several gun firing.
    “The robbers attacked the police division in an attempt to disorganise, incapacitate and destabilise the police officers who were in a fierce gun battle with them, while they were robbing Access Bank and United Bank for Africa (UBA) simultaneously.
    “The attempt to attack the Police Division Armoury was repelled and thereby unfruitful.
    “The robbers, after been overwhelmed by the policemen, comprising CP’s Surveillance team, IRT, PRU, Anti-Kidnapping, STS, 39 PMF, JTF along with local security outfits, took to their heels.
    “The police, thereafter, gave the criminals a hot chase, recovered four of the vehicles used for the operation along with some live ammunition.
    “Some of the robbers subsequently fled into the bush with bullet wounds and also carted away certain amount of money, yet to be ascertained from the banks.
    “The police, jointly with local security outfits have been combing the bushes in a bid to arrest the robbers.
    “It is very unfortunate that in the course of the robbery, one Police Special Constabulary, named Dauda Jelili, was shot dead while four civilians were injured and receiving treatment in a hospital.
    “The Osun Commissioner of Police, Olawale Olokode, therefore, enjoins good people of the state to cooperate and collaborate with the police by giving prompt and useful information to nip in the bud all criminal activities before they happen, as it is said that ‘Prevention is better than cure’.
    “The CP also appeals to members of the public to inform the police of any suspected person or persons with gun/bullet wound.” the statement reads
  • JUST IN: Daredevil robbers attack two commercial banks in Osun, cart away cash, kill two

    JUST IN: Daredevil robbers attack two commercial banks in Osun, cart away cash, kill two

    Two persons were fear dead as suspected armed robbers on Thursday attacked two generation banks in Iree, Boripe Local Government Area of Osun.

    According to reports, the robbers arrived at the two banks, in the same location at 3:50 p.m and operated for about 30 minutes.

    A witness, who spoke under condition of anonymity, said that two persons were killed during the robbery, while unspecified amount was carted away.

    According to the witness, a police officer attached to one of the banks, was killed.

    It was also learnt that the robbers shot sporadically into the air and engaged the police in gun duel before they fled the scene and escaped through Iree-Ada Road.

    Confirming the incident, the Spokesperson, Osun Police Command, SP Yemisi Opalola, said she could not yet ascertain the numbers of casualties.
    Opalola said that police officers deployed to the area were already after the fleeing suspected armed robbers.
    She said the suspected armed robbers abandoned their operation vehicles at the scene, adding that full details would be provided on the incident later.
  • CBN Dollar Ban designed to further enrich commercial banks – BDC operators

    CBN Dollar Ban designed to further enrich commercial banks – BDC operators

    …apex bank failed to adequately monitor us
    …insist ban will further make Naira to slide beyond N600
    …alleged that most staff of CBN run BDCs
    By Emman Ovuakporie
    Some Bureau de Change, (BDC) operators on Tuesday said the Central Bank of Nigeria, (CBN) directive to ban their operations is primarily designed to further enrich commercial banks.
    TheNewsGuru.com, (TNG) reports the new development which has thrown operators into a panic mode did not actually come as a surprise because they had first hand information that CBN was going to strike them.
    Some of the operators who spoke to TNG under the condition of anonymity said though the CBN action did not come as a surprise “because some of us were aware.
    TNG recalls that on Tuesday afternoon, the regulator of the sector in Nigeria announced an end to weekly allocation and sale of foreign exchange to BDCs currently at $110 million per week.
    Commercial banks are to begin sales of forex to individuals with genuine need.
    One of the operators in Lagos mainland maintained that”what they do not know is that this action will further make the Naira slide beyond N600 in the next one month.
    “Nobody should blame us because the regulatory bank failed to adequately monitor as there are some bad eggs among us but that’s not the issue.
    “The real issue is that this ban is primarily designed to further enrich the commercial banks that are the biggest beneficiaries.
    “All they ought to do from the onset is to give a directive that hoarders of dollars will not get the weekly $10k they allocate and ensure some of us are actually denied.
    “If they had done this, the naira will definitely shore up but with this blanket ban, wait and see what will happen in the next month if the Naira will not further nose dive from where it is now.
    “Immediately the announcement was made the Naira hit N505 to the dollar and if care is not taken it will continue to slide.
    “The dollar is massively hoarded because in the last four years it has been gaining ground against the Naira so people hoard because the increase has remained constant.
    Another operator on the island too spoke in a similar vein heaping all the blames on the doorstep of CBN.
    He said”we’ll continue to hail former CBN governor, Sanusi Lamido because in his time he tried as much he could to stabilize the naira and that’s why every now and then when we had a parliament they summon him.
    ” Now that we know that the Nigerian parliament is an extension of Buhari’s cabinet nothing happens because there’s no check and balance any longer.
    “It’s a sad commentary if this trend continues in the next four years as this ban can never give the naira the succour to survive against the dollar.
    “Protocols in commercial banks will further frustrate Nigerians as our services may not be readily available except for a few of us who had first hand information and bought enough dollars to make a kill from this CBN directive.
    “Most CBN staff that we know run BDCs too to make ends meet and they enjoy same allocation except for those in category A who get as much as $1m.
  • Telcos, banks commence implementation of N6.98 service charge for each USSD transaction

    Telcos, banks commence implementation of N6.98 service charge for each USSD transaction

    Telecommunications companies and commercial banks in the country have commenced implementation of the N6.98 service charge for each USSD transaction.

    TheNewsGuru.com, TNG reports that many users of USSD services in the country started to see a notice of the charge on their phones on Friday.

    USSD is a critical channel for delivering financial services, especially for those who do not have access to physical banking infrastructure or internet services.

    “Welcome to USSD Banking,” one notice said. “Please note, a N6.98 network charge will be applied to your account for banking services on this channel.”

    TNG reports that the decision to charge users was reached in March by the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC). The service charge cuts across the four major telecommunication communication service providers; MTN, Airtel, Glo and 9Mobile.

    The decision was part of an agreement reached with deposit money banks following a disagreement between banks and telecom firms over USSD and other text message transaction requests.

    “Effective March 16, 2021, USSD services for financial transactions conducted at DMBs (Deposit Money Banks) and all CBN-licensed institutions will be charged at a flat fee of N6.98 per transaction,” a March statement signed by the CBN and NCC partly read.

    The charge is expected to be withdrawn from users’ bank accounts and remitted to mobile network operators, who provide infrastructure for the service to operate.

  • 28 commercial, merchant banks in Nigeria lose N1.4trn to CBN

    Nigeria’s apex bank, Central Bank of Nigeria (CBN) has debited about 28 commercial and merchant banks operating in the country a total of N1.4 trillion.

    A report by Reuters on Friday said the affected financial institutions were levied based on issues surrounding cash reserve ratio (CRR).

    However, it was pointed out that the total amount deducted from the CRR of the affected lenders was more than 27.5 percent target set for them.

    Recall that in January 2020, the apex bank raised the CRR by 500 basis points to 27.5 percent. This was the first rise in four years and the action was taken to curb excess liquidity in the banking system, which the CBN said was contributing to inflation.

    From the deductions, Zenith Bank had the highest amount, N355.95 billion, followed by First Bank with N208.1 billion and UBA with N204.75 billion.

    Also, Standard Chartered Bank was charged N120.65 billion, while Stanbic IBTC had N143.97 billion deducted from its reserves with the central bank.

    TheNewsGuru.com (TNG) reports that this is not the first time in recent times the CBN is levying banks for regulatory issues. Last year, after it asked lenders to increase their loan-to-deposit ratio (LDR) to 60 percent by end of September, the CBN fined erring banks nearly N500 billion.

    The central bank has been coming up with policies to improve lending in the country, which it expects to boost the economy, which before now had been struggling to fully recover from the 2016 recession.

    While the recovery process was going on, the coronavirus pandemic and the crashing of crude oil prices at the global market has dented efforts of both local fiscal and monetary authorities at getting the economy back on its feet.

    The falling crude oil prices forced the federal government to revise the benchmark in the 2020 budget to $30 per barrel from $57 per barrel.

    While the new crude oil benchmark is still undergoing approval of the parliament, prices have further declined to $20 per barrel, which is still not favourable to Nigeria, which depends hugely on sale of the commodity for revenue to run government activities.

    The central bank uses cash reserve levies to mop up liquidity and then re-injects the liquidity to stabilise markets. Reuters said in its report that apex bank “did not respond to request for comment.”