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CBN Set to Liquidate 83 Micro Finance Banks

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Alhaji Umaru Ibrahim, managing director of the Nigeria Deposit Insurance Corporation, said yesterday that the Central Bank of Nigeria has approved the liquidation of 83 licensed micro finance banks.

Ibrahim stated this when he appeared before the Senate Committee on Banking and Currency to defend his agency’s 2014 budget.

The NDIC boss said that it was discovered that some of the micro finance banks “existed only on paper while some are used to defraud Nigerians.”

He further explained that there were up to 900 micro finance banks operating in the country out of which 83 of them have been listed for liquidation.

Ibrahim said the NDIC was already working towards determining the number of depositors and how much each deposited in the banks in order to pay them.

He said, “Some assets of the banks will also be sold. There is no doubt that the operations of some of the micro finance banks have become epileptic.”

The NDIC boss added that N105 billion was provided for in the 2014 budget to pay off depositors of liquidated banks.

He said, “Funding gap is what we do to prepare for the rainy day. We hope and pray that the rainy day does not come but any insurance should prepare for the rainy day. As we speak, no bank benefited from the fund in 2013.”

Ibrahim lamented what he called “the dollarisation’ of the economy by speculators” and assured members of the public that the issue was already being looked into by the CBN to ensure that it does not affect the economy.

He also told the committee that NDIC initiated rebranding operations to ensure better service.

He said that after operating for 20 years, the NDIC had decided that it was time to rebrand for total reorientation.

He also hinted on plans to regulate mobile banking in the country to avoid any form of fraudulent practice by operators either in the banking or telecommunications sector.

He said, “In 2013, we maintained confidence and stability of the banking system through a continuous effective supervision and regulation of the system. We have also try to pay depositors of institutions that had been liquidated.

“We have stepped up awareness and campaigns about our activities to make sure that members of the public put up claims of their locked up deposits in liquidated financial institutions. We appointed some banks as agents with the assistance of our various zonal offices that we had established in various parts of the country.”

The NDIC boss added that, his plan for the current fiscal year was to continue to protect depositors’ funds and to enhance the supervision because the agency’s act did not cover such transactions at the moment.

He also pledged to promote financial literacy and ensure consumer protection so as to make sure that the agency enhances financial inclusion so that millions of Nigerians that do not have access to banks for any form of financial system or outlet were assisted in various ways.

He said, “We are partnering with the Central Bank of Nigeria to discuss the ways and means of ensuring depositors of mobile banks and depositors of mobile phone system.

“Mobile banks are emerging and seven banks had been licensed by the CBN to get involved in mobile banking and there are 11 non-banking telecommunications related institutions that had been licensed to offer mobile money service.

“This needs to be regulated. The depositors of the institutions offering mobile banking needed to be identified and protected. The whole essence of this is that if we have millions of such people sending and collecting money through mobile banking system.

“We want to ensure that in event of any crisis, they are covered. Unless they have that assurance of being covered, you don’t expect them to accept to participate in this revolutionary project that is coming on board.”

“On the issue of a repeal of the Fiscal Responsibility Act, it is not a bad idea to take a second look at it. We will welcome a review of the act”

 


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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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