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CBN Data Shows over $16Bn in Domiciliary Accounts in Nigeria

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Data from the Central Bank of Nigeria (CBN), has revealed that Nigeria has an estimation of $16 billion in domiciliary accounts of commercial and merchant banks, using the official exchange rate of N410/$ based on NAFEX rate used at the Investor and Exporter window.

CBN Data Shows over $16Bn in Domiciliary Accounts in Nigeria

According to the data contained in the apex bank’s statistical bulletin, Nigeria had a total domiciliary account balance of N6.566 trillion as of March 2021 which when converted to dollars at the official rate of N410/$1, translates to about $16 billion.

According to a Nairametrics reports, a further breakdown of the amount revealed corporates own about N4.478 trillion ($11 billion), while retail depositors own about N1.798 trillion ($4.38 billion). The balance is owned by states and local governments and other public institutions.

Nigeria’s foreign currency balances in commercial banks have become a topic of discussion in several quarters, with some calling for a conversion of the balances into naira to shore up Nigeria’s dollar reserves.

Meanwhile, depositors are worried stiff about any such move, even though the apex bank has come out to deny it categorically.

Much of the discussion has revolved around how robust our domiciliary account balances are and if it can address forex shortages.

Most recently, Ibrahim Obanikoro, House of Reps member, representing Eti-Osa Federal Constituency, Lagos State, called on the Central Bank of Nigeria to close all domiciliary accounts for the next 12 months to ease the slide of the naira. Obanikoro stated this in an online statement, adding that he has come up with a bill that will serve the common good.

“I am not the CBN Governor but at this moment, I’m of the opinion that CBN should mandate that all dom accounts be closed for the next 12 months. Let’s see the effect on the Naira. After all, you can’t go to any of the Western worlds and open a foreign currency account,” Obanikoro suggested.

This is not the first time Nigerians are experiencing palpable fears of a possible conversion of domiciliary accounts into naira, dating as far back as 2016 when we last had a currency crisis. Last year, a purportedly leaked memo suggested plans to curb usage of money in domiciliary accounts, however, this was categorically denied.

The rumors swelled again in late July, forcing the CBN to deny any such plans in a memo issued by its director of corporate communications. Again, in September of this year, a fake memo appeared with the insinuation that the central bank had approved the conversion of deposits in domiciliary accounts into naira. The Central Bank issued a press release categorically denying this.

”The attention of the Central Bank of Nigeria (CBN) has been drawn to a fake circulation, in social media circles, of a circular with a fake CBN logo curiously dated 13 September 2021, and purportedly issued by its Trade and Exchange Department to the effect that all Deposit Money Banks, International Money Transfer Operators (IMTOs) and members of the public are to convert domiciliary account holdings into naira. We wish to reiterate that the Bank has not contemplated, and will never contemplate, any such line of action. The speculation is a completely false narrative aimed at triggering panic in the foreign exchange market,” the CBN stated.

At just $16 billion, the above balances suggest Nigeria’s domiciliary account balances are not robust enough to meet Nigeria’s foreign exchange demand shortages, which is beign  estimated at about $30 billion.


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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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