E-Financial
Court Orders First Bank to Pay Interest of N2.9Bn to FAAN
A Lagos Federal High Court has ordered First Bank of Nigeria (FBN) Plc to pay the sum of N2,937,925,388.52 billion, to the Federal Airports Authority of Nigeria (FAAN) being an interest for not disclosing under-payment of credit interest on deposits in 14 different current accounts domiciled with the bank.
Justice Ayokunle Faji, while delivering judgment in suit numbered FHC/L/CS/67/2021 filed by FAAN, also held that First Bank breached its own professional Code of Ethics, by not disclosing all information on goods and services offered, including the interest rate payable by the bank.
Justice Faji made the above orders and declarations in a judgment delivered on October 9, 2023.
The plaintiff (FAAN) had in its originating Summons dated and filed on January 13, 2021, urged the Court to determine whether First Bank is entitled to pay interest on the applicant’s (FAAN) current deposits in lime with the Central Bank of Nigeria Monetary, Credit Foreign Trade and Exchange Policy Guideline of 2004/2005 No 37, Section 3, Sub-Section 3.2.4(a) Interest Policy, which states that “Banks shall continue to pay interest on current account deposits at rates negotiated between them and their customers.
Consequently, the applicant seeks the following reliefs: “An order for the payment of interest on the underpayment of interest on the current account deposits of the applicant at the respondent’s maximum lending rate from 1st September 2018 up to the date of refund.
“An order for the payment of the sum of N2,117,955, 865.01 billion, being interest on underpayment of credit interest on deposits in the applicant’s current account numbers.
“An Order for the payment of the sum of N819, 969, 523.51 million, being credit interest payable on the applicant’s current account deposits in account numbers: A declaration that in pursuance of the Central Bank of Nigeria Monetary, Credit, Foreign Trade and Exchange Policy Guidelines (Monetary Policy Circular), the Applicant is entitled to credit interest on its current account numbers 2004728814, 2004730671, 2004731403, 2004747983, 2012104714, 2012114742, 2013512417, 2020114013, 2020114439, 2020119427, 2020210135, 2020,211974, 2020213521 and 2020268284; deposits with the respondent.
“A declaration that in pursuance of the Central Bank of Nigeria Monetary, Credit, Foreign Trade and Exchange Policy Guidelines (Monetary Policy Circular), the applicant is entitled to receive interest on the credit interest the respondent failed to pay on the current account deposits of the applicant.”
But, in response to the Originating Summons, the First Bank in its 32-paragraph counter affidavit, raised two issues for determination to wit: “Whether having regards to the absence of any negotiation and/or agreement between the applicant and the respondent for payment of interest on the applicant’s current account with the respondent, the applicant is entitled to the reliefs sought on the face of the Originating Summons?
“Whether given the Central Bank of Nigeria’s circular “Time Bar for Resolution of Customer’s Complaint” dated 21st August 2015, this suit is statute-barred and constitutes an abuse of court process?”
First Bank stated that by Section 3.2.10 (a) of the Central Bank of Nigeria Monetary, Credit, Foreign Trade and Exchange Policy Guidelines, the words used in the said Section 3.2.10. (a) are clear and plain and should be given literal or ordinary meaning. It follows, therefore, that before interest can be paid on a current account, the interest rate should have been negotiated and agreed upon between the customer and the bank.
The bank further argued that the applicant did not exhibit or refer to any document to show that it approached or negotiated with the respondent on the interest rate to be paid by the respondent for the credit balances in the applicant’s current accounts with the respondent.
It also stated that the applicant has failed to discharge the burden placed on it by placing sufficient materials before the court, therefore the reliefs sought cannot be granted.
Delivering judgement on the issues raised, Justice Faji held that in line with paragraph 2 of the Bank Customer Bill of Rights and Duties and paragraph 3.5(b) of Nigerian Banking Industry (Professional Code of Ethics and Business Conduct), First Bank is duty bound to disclose to the applicant all information on goods and services offered.
“This seems to me to impose a duty on the defendant as part of the ethics of the banking profession. This is where I therefore have reason to hold that the defendant indeed failed to disclose the interest regime to the plaintiff without which the plaintiff would not have been able to know that the interest was to be negotiated and thus make the first move.
“In any event, it is apparent that a banker owes its customer a fiduciary duty and given the rules guiding the ethics of the banking industry, it seems to me that there was a duty on the defendant to inform the plaintiff of its right to negotiate interest. That duty is imposed by the code of ethics aforesaid which is binding on all banks in Nigeria, the defendant inclusive.
“That is in my view the basis for the fiduciary duty owed the plaintiff by the defendant. It is a code of ethics which the defendant ought to have followed and by which it is bound. By not disclosing such information to the plaintiff, the – defendant had breached its professional code of ethics and that in my view was done to gain an unfair advantage over the plaintiff as regards the payment of interest on current accounts. By those rules, the plaintiff is entitled to information upon which to have a basis to negotiate interest which was not availed by the defendant.
“Furthermore and by paragraph 3.5(b) of Nigerian Banking Industry (Professional Code of Ethics and Business Conduct) 2014, banks are under an obligation to inform their customers about the interest rates applicable to/payable on their deposit, fixed, savings and other accounts.
“This shows clearly that the defendant violated its code of ethics. It is also not in dispute that the interest has not been paid. The plaintiff calculated its expert. The defendant contends that the defendant was not involved in the computation of the interest as done by the plaintiff’s consultant.
“The defendant did not however state its calculation or show its own experts’ report. It also did not an expert show that plaintiffs’ calculations are wrong. I believe the contents of the report tendered by plaintiff’s expert who has shown evidence of experience in matters of this nature.
“I hold that the sums therein stated are due to be paid by the defendant and ought to be so paid. I hold that the sums determined as unpaid interest are due to the plaintiff from the defendant and the defendant is therefore ordered to pay the sums claimed.
“This action therefore succeeds. I answer the 4 questions for determination in the affirmative and in favour of the plaintiff. I grant the declarations sought in reliefs 1 and 3 and make the orders sought in reliefs 2, 4 and 5,” the judge held.
The Securities and Exchange Commission (SEC) has revised the minimum capital applicable to all categories of regulated capital market entities after 10 years.
The minimum capital review, according to the SEC, is informed by the need to strengthen market resilience, enhance investor protection, align capital adequacy with the evolving risk profile of market activities, and ensure that regulated entities possess sufficient financial capacity to discharge their obligations in a sustainable manner.
“The revised Minimum Capital framework seeks to: enhance the financial soundness and operational resilience of market operators; align capital requirements with the scope, complexity, and risk exposure of regulated activities; promote market stability and systemic risk mitigation; and support innovation and orderly development of new market segments, including digital assets and commodities markets,” SEC said in a January 16 circular to market operators.
The SEC circular was sent to all entities regulated by the Commission, including but not limited to core and non-core capital market operators; market infrastructure institutions; capital market consultants; financial technology (FinTech) operators; Virtual Asset Service Providers (VASPs); and Commodity market intermediaries.
All affected entities are required to comply with the revised Minimum Capital Requirements on or before June 30, 2027, the circular said.
“Entities that fail to meet the prescribed requirements within the stipulated timeline shall be subject to appropriate regulatory sanctions, including suspension or withdrawal of registration, as may be determined by the Commission,” SEC said.
Tier-1 Portfolio Managers (Full Scope) involved in the management of Collective Investment Schemes (CIS) and Alternative Investment Funds (Private Equity, Venture Capital, Infrastructure Funds etc) above N20 billion Net Asset Value (NAV), or discretionary and Non-Discretionary Private Portfolio Management Services above N20 billion Assets under Management (AuM), or exposure to foreign instruments up to 40 percent of the NAV are now required to have a minimum capital of N5 billion as against N150 million.
“Any Fund and Portfolio Manager with NAV/AuM of more than N100billion should have a minimum of 10 percent of the NAV/AuM as capital,” SEC added.
For the Tier-2 fund/portfolio managers (Limited Scope) who are in the business of management of Collective Investment Schemes with limited pooled fund creation of not more than 10 times the required capital (N20 billion) on Net Asset Value (NAV), or discretionary and non-discretionary private portfolio management services of not more than N20 billion, or those exposure to foreign instruments of not more than 20 percent of the NAV, now require N2 billion as minimum capital as against low of N150 million.
Likewise, broker-dealers whose services include: client execution, proprietary trading, margin/securities lending and advisory services no longer require N300 million minimum capital to operate but N2 billion.
The SEC said the minimum capital review from 2015 low is in line with its mandate under the Investments and Securities Act 2025 to regulate and develop the Nigerian capital market.
Also, Tier 1 issuing houses who do non-interest finance services, advisory & arrangement services but no underwriting now require N2 billion as against N200 million; while Tier 2 –issuing houses with underwriting and offers a ‘one-stop-shop’ for issuers, provides underwriting services, and renders advisory and product development services require N7 billion minimum capital for this business as against N200 million.
Also, the minimum capital requirement for brokers (client execution only) has been jacked up from N200 million to N600 million, while that of dealers (proprietary trading only) has been moved from N100 million to N1 billion.
Broker-Dealers’ (client execution, proprietary trading, margin/securities lending and advisory services) has been raised from N300 million to N2 billion, while Sub-Brokers’ (Digital) from N10million to N100million; Sub-Broker (Corporate) has been increased from N10million to N50 million. Also, sub-brokers’ (Individual) now need N10 million minimum capital for the business as against N2 million while inter-dealer brokers require N2 billion as against N50 million.
Securities and Exchange Commission (SEC) and the Nigeria Police Force have forged an alliance against illegal scheme operators, investment frauds, and cryptocurrency frauds in a bid to protect the hard-earned savings and the financial dreams of the Nigerian people.
Dr Emomotimi Agama, director-general of the SEC, stated this during a meeting with Kayode Egbetokun, Inspector General of Police, held in Abuja.
Agama said the SEC, as the sentinel at the gate of Nigeria’s formal capital markets, had the mandate to protect investors, maintain fair, efficient, and transparent markets, and promote the growth of a vibrant economy built on trust, which is done by setting rules, licensing operators and market surveillance.
He, however, stated that the Commission faced adversaries who operate in the shadows, outside regulated gates by exploiting the trust of people and promising miraculous returns such as 200 per cent in 30 days.
“Currently, there is a gap, a seam between identification and enforcement that these scammers exploit. Today, we aim to close that gap permanently. Therefore, we propose a robust, institutionalised collaboration with the following pillars: Joint Intelligence and Operations Task Force: Capacity Building and Knowledge Transfer; Streamlined Processes for Enforcement and National Public Awareness Campaign,” he stated.
The SEC DG advocated, “the establishment of a dedicated SEC-NPF team that combines market intelligence, forensic accounting, and understanding of complex financial schemes with investigative and intelligence-gathering capabilities. This team will be the rapid-response unit to new frauds.”
Agama also sought the permission of the IGP to go into a Memorandum of Understanding with the Cyber Security Unit of the Police Force in a bid to ensure that cyberspace is safe for all Nigerians
In his response, the IGP Kayode Egbetokun assured the SEC team that the Nigerian police Force is ready to collaborate with the Commission, strengthen partnership in all the ways possible, and ensure that the Commission achieves its aims.
He said, “Your role in the Securities and Exchange Commission is very crucial to the Nigerian Economy, and with our supervision and support from the government, we will ensure economic recovery and growth. If the police unit in SEC is strengthened, it is going to make such an impact on your enforcement drive. What you said speaks so much to your determination to ensure effective drive in the Capital market, and when we can achieve effective enforcement, it comes with so many benefits.
Egbetokun also congratulated the Commission on the recent achievement of the N100 trillion market capitalisation mark, adding that it will aid economic growth and development.
Nigerian fintech giant, Paystack has taken its boldest step yet beyond payments, acquiring Ladder Microfinance Bank. The fintech giant has quickly rebranded its new acquisition as Paystack Microfinance Bank (MFB) in a strategic shift that could reshape how African businesses access credit, deposits, and embedded financial services.
After nearly a decade building the backbone of online payments in Nigeria, the deal gives Paystack regulatory cover to hold deposits, lend directly to businesses and offer banking-as-a-service products.
More importantly, Paystack’s chief operating officer, Amandine Lobelle, highlighted that it allows the company to exert greater control over the trillions of naira that already flow through its platform every month, turning transaction data into a powerful engine for credit and treasury products.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow. We wanted to leverage the expertise that we have built over the last decade to continue to address some of the pain points that businesses have,” said Lobelle.
Paystack MFB will operate as a sister company to its payments business, initially focusing on working capital loans, merchant cash advances, overdrafts and term loans for small and medium-sized enterprises.
By using real-time payment data to underwrite loans, Paystack believes it can offer faster approvals and more accurate risk pricing than traditional lenders, directly tackling Nigeria’s estimated $32 billion small business financing gap.
For Paystack, founded in 2016 and acquired by Stripe in 2020, the move marks a strategic evolution from being just a payments processor to becoming a core part of the financial operating system for African businesses.
Today, Paystack supports more than 300,000 businesses across Nigeria, Ghana, and South Africa and has become one of Africa’s most trusted fintech infrastructure providers.
The banking licence is a game-changer as payments, once Paystack’s main growth engine, are increasingly commoditised across Africa. Lending, deposits and treasury services offer deeper margins, stickier relationships and long-term sustainability.
By layering banking services on top of payments, Paystack is betting that infrastructure depth will outperform flashy consumer scale.
However, the move also throws the Nigerian-born fintech giant into fierce competition with digital -first lenders and neobanks such as Moniepoint, Kuda, OPay and PalmPay, which already operate at massive scale. Still, Paystack’s strength lies in its merchant-first focus and developer-friendly APIs.
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