E-Financial

CBN to Stop Forex Sales to Banks not Issuing LCs

Published

10 years ago

March 7, 2016

Godwin Emefiele, Governor, Central Bank of Nigeria

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Any bank in Nigeria that deliberately refuses to issue Letters of Credit (LCs) to manufacturers would be denied access to the official foreign exchange window, according to a report by New Telegraph.

Central Bank of Nigeria (CBN) reportedly took the decision at an emergency meeting of the Bankers’ Committee, in Lagos.

The Bankers’ Committee is an association of Chief Executive Officers (CEOs) of banks, discount houses, the CBN and other financial institutions such as the Nigeria Deposit Insurance Corporation (NDIC), which meets bi-monthly to discuss the state of affairs of the industry.

At the emergency meet-ing, which was called last Sunday by the CBN governor, Godwin Emefiele, he was said to have registered his displeasure over the rate at which lenders were refusing to open LCs for their customers, particularly manufacturers. But bankers, who spoke with New Telegraph, said the acute forex scarcity in the system had forced them to stop opening LCs.

A letter of credit is a document issued by a bank to another bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

Telegraph said that a top official of a first tier bank, who spoke on condition of anonymity, said that the lender stopped opening new LCs because it had a huge backlog of LCs that it had not been able to process due to the forex scarcity.

He said: “There is just no forex in the system. We already have a huge backlog of LCs that we cannot process because forex is not easily available, so there is no point opening new LCs when the forex situation is becoming more difficult.” He said that the CBN had not been able to meet all legitimate forex demands despite the dwindling external reserves, which stood at $27.143 billion as at March 1st, 2016. The Federal Government is shielding the naira after the 42 per cent decline in the price of crude in the past year has decimated Nigeria’s revenues.

The naira has been pegged at N197-199 per dollar since March last year, while in the unofficial parallel market, otherwise known as the parallel market, the naira is some 43 per cent weaker, and traded at about N320 per dollar last Friday.

With far fewer dollars circulating in the country, the lenders are struggling to access enough foreign exchange to facilitate imports, settle accounts with correspondent banks, keep up with customers’ use of credit cards internationally and meet maturing debt obligations, according to Adesoji Solanke, Renaissance Capital’s head of research in Nigeria in a recent report.

Moody’s Investors Service said in a recent report that with 24 per cent of banks’ loans to oil and gas companies and rising credit costs, banks face lower profits in the next 12 months to 18 months.

“It will become increasingly difficult to source enough forex to service debt repayments and a default will trigger a banking crisis,” said Robert Besseling, a Johannesburg-based executive director at business risk consultancy Exx Africa.

“If a default is going to happen, it will probably happen this year. It only takes one bank to hit the wall to create panic. “Nigeria remains Africa’s most populous country and its biggest economy. Even though its growth has slowed, the economy may expand 3.2 per cent this year and 4.9 per cent in 2017 if the government prioritizes infrastructure investment, the International Monetary Fund (IMF) said penultimate Wednesday. “Investors may be reconsidering their presence in Nigeria, but those with a longer-term view won’t withdraw completely, Besseling,” said.

“Looking from the outside, it’s a highly underpenetrated market and valuations on assets like the banks are pitiful – they’re so cheap you could buy them without having to get board approval,” Gadhia said. “But it boils down to a need for clarity.

So far, President Buhari seems to have ad-hoc policies and you would need a lot more clarity before investors gain confidence again.” Also, in a chat with this newspaper, financial analyst and Principal Consultant, Henates & Associates, Mr. Henry Atenaga, said while it is obvious that the country is passing through tough times, banks have to adequately account for the utilisation of forex purchased from the CBN for industry watchers to believe that they cannot meet legitimate demands for dollars.

He said: “It is quite possible that given importers’ current desperation to obtain foreign exchange, they will want to open as many LCs as possible. The fact is that if the CBN had not introduced forex restrictions, by now there will be no dollars to sell to anybody.”

The IMF had called on Nigeria to stop pegging its currency and to remove curbs on access to foreign exchange. To try and conserve declining reserves and boost local manufacturing, the CBN last year imposed restrictions on access to foreign currency, but businesses dependent on imports suffered and foreign portfolio inflows waned.

Adding to the pain is inflation at 9.6 per cent in January, which is above the banking watchdog’s 6-9 per cent target range As part of measures to check sharp practices in the forex market, the CBN directed banks to start publishing their returns on the utilisation of forex exchange purchased in the newspapers.

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E-Financial

Bank Customers to Pay N1,500 for ATM Card Issuance, Replacement – CBN

Published

1 day ago

April 25, 2026

Ebere Melum-Nwogbo

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Central Bank of Nigeria (CBN) has said that the cost of issuing or replacing a standard debit or credit card will rise by 50 percent to about N1,500, up from about N1,000.

Bank Customers to Pay N1,500 for ATM Card Issuance, Replacement - CBN

The new charge is contained in the Exposure Draft of the Guide to Charges by Banks and Other Financial Institutions in Nigeria, 2026, released by the Central Bank of Nigeria.

The draft followed a circular issued to banks, other financial institutions and the public, dated April 21, 2026, and signed by Rita I. Sike, director, Financial Policy and Regulation Department.

Under the revised guide, issuance and replacement of regular or basic debit and credit cards will attract a N1,500 fee, while charges for premium debit, credit or hybrid cards will be negotiable.

In the 2020 guide, debit card charges were fixed at N1,000 as a one-off fee for issuance, replacement of lost or damaged cards, and renewal upon expiry, applicable across all card types.

The CBN said the review is part of its mandate to promote a safe and sound financial system, accelerate the adoption of innovative financial services, and enhance financial inclusion, particularly in micropayments and transactions.

According to the regulator, the revised guide expands the range of financial services, encourages innovation, strengthens oversight and accountability, and promotes financial inclusion through lower tariffs for micropayments. It also updates certain banking charges to support increased use of electronic channels and accommodate new industry participants since the 2020 version.

The apex bank said the draft has been exposed to the public for comments and input on the proposed fees, with submissions expected via [email protected] on or before May 08, 2026.

The guide provides a framework for the application of charges, including fees and rates, on products and services offered by financial institutions in Nigeria. It applies to all institutions licensed or regulated by the Central Bank of Nigeria.

The charges, according to the regulator, were developed following extensive consultations with stakeholders and are aimed at enhancing flexibility, standardisation, transparency and competition in the financial system.

It added that where charges are designated as negotiable, financial institutions must inform customers of their right to negotiate at the start of transactions and reach mutual agreement on applicable fees through verifiable means.

Where limits are specified, charges must not exceed the prescribed maximum or fall below the minimum.

The apex bank noted that the guide is not exhaustive and that financial institutions must seek prior approval before introducing new products, services or charges not covered.

The framework applies to a wide range of institutions, including commercial banks, merchant banks, payment service banks, non-interest banks, microfinance banks, finance companies, primary mortgage banks, development finance institutions, credit guarantee companies, mobile money operators, and other institutions designated by the regulator.

In line with existing consumer protection regulations, the apex bank said non-credit charges can only be applied to the extent of the available account balance, with any outstanding fees deferred until the account is funded. Such deferred charges will not attract interest.

The guide is to be read alongside the relevant guidance notes and glossary provisions and will supersede the 2020 version when it takes effect on May 1, 2026.

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E-Financial

ProvidusBank Launches Ado-Ekiti Branch, Eyes Nationwide Rollout

Published

1 day ago

April 25, 2026

Ugo Onwuaso

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ProvidusBank Plc has commissioned a new branch in Ado-Ekiti, advancing its expansion strategy across Nigeria’s high-growth markets while leveraging its compliance with the Central Bank of Nigeria’s (CBN) recapitalisation directive since January 2025.

ProvidusBank

The move aims to enhance financial inclusion, support local enterprises, and deliver banking services closer to communities and businesses.

At the event, Executive Director/Chief Financial Officer, Deoye Ojuroye, described the rollout as part of a 12-month plan to bolster the bank’s nationwide presence.

“Our approach is deliberate—we are growing in the right places, supporting real economic activity, and building a bank that is both resilient and responsive to customer needs,” Ojuroye said.

He emphasised the bank’s robust capital and risk management, stating: “We are well capitalised within our regulatory category, giving us confidence to expand responsibly while aiding businesses and communities.”

ProvidusBank plans further branches in strategic locations over the next year, underscoring its focus on scalability, accessibility, and sustainable growth as a trusted partner for individuals and enterprises.

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E-Financial

Fidelity Bank Bolsters SME Growth with April Masterclass Series on Pricing, Digital Tools, Global Trade

Published

1 day ago

April 25, 2026

Ugo Onwuaso

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Fidelity Bank Plc has launched a series of high-impact masterclasses in April 2026 to empower Nigerian Small and Medium Enterprises (SMEs) with practical skills for pricing, digital expansion, and international growth.

Fidelity Bank

The initiative aligns with the bank’s drive to boost SME operational efficiency and market access amid Nigeria’s economic challenges.

The flagship session, “Pricing That Works: How to Charge Right and Earn More,” took place on April 10 at the Fidelity SME Hub in Gbagada, Lagos. It drew about 100 entrepreneurs from diverse sectors, offering insights into costing, value-based pricing, pricing psychology, and customer perception to ensure profitable, customer-friendly strategies.

Buoyed by positive feedback, the bank rolled out three more sessions. The second, “Baking Masterclass: From Kitchen to Cashflow,” ran on April 14 and 15, providing hands-on training for bakers and food businesses to enhance product quality and profitability.

Divisional Head, SME Banking, Ugochi Osinigwe, stated: “At Fidelity Bank, we believe that when SMEs succeed, the economy grows. That is why we have curated masterclasses on pricing, product improvement, online sales, and global expansion to equip entrepreneurs with immediate, actionable tools.”

She highlighted the series as part of broader SME support via the Fidelity SME Hub, including advisory services, funding, and nationwide programmes. The bank recently earned the Best Retail and SME Bank Award from Independent Newspapers.

Upcoming events include “Grow Online Sales on a Budget” today, April 24, focusing on low-cost digital strategies for visibility and sales; and “Take Your Business Global: One-on-One Trade Advisory” on April 29, covering export readiness, payments, markets, and compliance.

Fidelity Bank, ranked among Nigeria’s top lenders, serves over 10 million customers via 255 branches, digital platforms, and its UK subsidiary, FidBank UK Limited. It has clinched awards like the 2024 Excellence in Digital Transformation & MSME Banking from BusinessDay BAFI Awards, Most Innovative Mobile Banking App from Global Business Outlook, Best Bank for SMEs from Euromoney, and Export Financing Bank of the Year from BusinessDay BAFI.

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