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NDIC Grants More Rebate on Insurance Premium for DMBs

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Nigeria Deposit Insurance Corporation (NDIC) has further reduced the deposit insurance premium rate to all Deposit Money Banks (DMBs) in Nigeria as part of efforts toward contributing to financial system stability and promoting public confidence in the banking industry.

This premium reduction was initiated to consolidate on the gains achieved by the Corporation’s migration from Flat Rate Premium System (FRPS) to Differential Premium Assessment System (DPAS).

The DPAS approach takes into consideration the risk each bank poses to the system and encourages banks to adopt sound risk management practices.

Alhaji Umaru Ibrahim, managing director/chief executive, NDIC, disclosed this during the last Financial Correspondents Association of Nigeria (FICAN) Workshop held in Katsina State.

Ibrahim also said that the Board of the Corporation had granted further relief to the DMBs at its last meeting held in September 2014; adding that the Board had reduced the insurance premium basis rate from the existing 40 to 35 basis points and the new premium rate would take effect from January this year.

According to him, the insurance premium rebates were part of the NDIC major contributions toward improving the intermediation role and other banking related activities of the DMBs.

The NDIC Chief Executive pointed out that Principle 11 of the Core Principles for Effective Deposit Insurance System requires Deposit Insurance Agencies (DIAs) to set aside adequate funds to ensure depositors’ prompt reimbursement in the event of any bank failure.

He also opined that the Corporation would from 2015 set new coverage levels for the DMBs in view of their relatively large volumes of deposits.

It would be recalled that the Corporation began the insurance premium rebate since the commencement of DPAS in 2008 but the import began in 2010 sequel to the Board’s decision to contribute to the Financial Stability Fund that was spearheaded by the Central Bank of Nigeria (CBN).

The Corporation had supported the fund through the reduction of premium base rate from 50 to 40 basis points to reduce the premium burden on the DMBs.

By 2012, 2013 and 2014, the Corporation had granted a total rebate of N53 billion, N63.6 billion and N75.98 billion respectively; thus a cumulative rebate sum of N192.6 billion to the DMBs.

The Corporation administers three (3) types of funds, namely: Deposit Insurance Fund (DIF) for DMBs, Special Insured Institutions Fund (SIIF) for MFBs and PMBs and Non-Interest Deposit Insurance Fund (NIDIF) for Non-Interest Banks.

Therefore, premium collection from the insured banks contributes substantially to the funds available to the NDIC to discharge its mandate. At present, the Corporation covers 97% of the bank depositors which is an indication of adequate coverage and appropriate pricing.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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