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NDIC Begins Hunt for Debtors of Failed Banks

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Nigeria Deposit Insurance Corporation (NDIC) is to go tough on debtors of failed banks, according to Mr. Bello Hassan, new managing director of the organization.

NDIC Begins Hunt for Debtors of Failed Banks

Hassan,who stated this at his inauguration by Mrs. Zainab Ahmed, minister of Finance, Budget and National Planning, in Abuja, also expressed determination to work with relevant institutions to strengthen the NDIC and enable it address failed banks’ resolution, more promptly.

“We will work with relevant stakeholders to address challenges currently facing the NDIC. One of the challenges is the recovery powers.

“If you look at the number of institutions the corporation has liquidated since inception it’s only about 10 DMBs (Deposit Money Banks) the corporation was able to pay 100% liquidation dividend.

“For the remaining ones, it means recovery has not been made 100%. So there is the need to enhance the powers of the corporation to be able us pursue these debtors to make sure that all the obligations are recovered because those loans and advances were financed by depositors’ money not shareholders’ money.

“So there is the need to enhance the powers of the corporation to be able to go after those obligors, so as to recover depositors’ money, pay them and build confidence and stability in the financial system,” the MD said.

He also said that he was determined to grow the Depositors’ Fund beyond the current level of less than N2 trillion.

According to the new MD, “There is need to build up depositors insurance fund because that’s what we use in making pay-out in the event of any liquidation. If you look at it, what we have is less than N2 trillion so there is the need for us to quickly fast-track the build-up of this fund in the event of any eventuality we shall have sufficient fund to be able to pay depositors without recourse to the treasury and the need to ensure that we offer assistance to insured deposit-taking institutions in a timely manner in order to promote stability and confidence within the banking system.”

In her address, the minister acknowledged issues affecting the operations of the NDIC in the Banks and Other Financial Act (BOFIA) 2020 and promised to address them.

Her words: “I am aware there are issues that arose from the recently amended Banks and Other Financial Act (BOFIA) 2020 to which my attention was drawn. We will work with you and the Board to resolve them. I pledge the Ministry’s continuous support and collaboration to your Corporation in the discharge of its mandate.”

 

 


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E-Financial

African Fintech Sector Grows, Enhancing Access to Finance

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A new European Investment Bank (EIB) research released yesterday shows the number of fintech companies in Africa has nearly tripled since 2020, boosting access to finance for people and businesses across the continent.

The report Finance in Africa 2024 highlights both developments in the African financial sector and constraints to the region’s economic progress.

According to the report, Africa’s fintech sector is prospering as digital finance grows at a faster rate than traditional banks.

The EIB report says the number of African companies offering new financial services increased from 450 in 2020 to 1,263 at the beginning of 2024.

“Fintech is revolutionising the way we think about finance in Africa,” says EIB vice-president Thomas Östros. “By leveraging technology, we can improve access to finance for millions and foster sustainable economic growth.”

The Finance in Africa report includes data from the ninth annual EIB Banking in Africa survey that details diverse challenges and confirms resilience of the African banking sector.

“While we see some signs of improvement, the high cost of finance remains a source of concern,” says EIB chief economist Debora Revoltella. “As we navigate the dual challenges of climate change and the digital transformation, the role of multilateral development bank lending is even more relevant in supporting sustainable growth on the continent.”


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E-Financial

CBN’s New Directive: Banks to Trade Foreign Currency Deposits

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Central Bank of Nigeria (CBN) has authorized banks to trade with foreign currency deposits made under its new amnesty initiative, the “Disclosure Scheme.”

This directive, intended to boost transparency and economic resilience, was issued on November 5 and signed by CBN officials John Sonojah and Adetona Adedeji.

The “Disclosure Scheme,” launched on October 31, offers individuals and businesses a nine-month window to deposit foreign currencies with amnesty assurances, aiming to strengthen Nigeria’s financial sector.

According to CBN’s guidelines, banks—including commercial, merchant, and non-interest banks (CMNIBs)—can trade these foreign currency deposits, known as Internationally Tradable Foreign Currencies (ITFCs), unless participants choose to invest them directly.

However, banks must ensure the funds remain available to depositors upon request.

CBN outlined the role of banks in facilitating this scheme. Responsibilities include opening designated domiciliary accounts, issuing receipts within 24 hours of deposit, and maintaining confidentiality as per Nigerian data protection laws.

Additionally, banks are required to report all ITFC transactions and ensure compliance with regulatory frameworks, including anti-money laundering and terrorism financing laws.

Participants in the scheme can convert foreign currency deposits to naira at the prevailing exchange rate without restrictions on withdrawals.

The scheme’s transparency measures, combined with the flexibility for participants to manage their foreign deposits, are designed to build confidence and encourage wider participation.


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9PSB Promotes Financial Literacy @ World’s Savings Day 2024

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9 Payment Service Bank (9PSB), a leading digital payment service provider committed to advancing financial inclusion in Nigeria, observed World Savings Day 2024 by conducting a financial literacy and mentorship programme for students at Fountain Heights Secondary School in Surulere, Lagos.

This initiative aligns with the Central Bank of Nigeria’s (CBN) directive for all financial institutions to implement financial literacy programmes aimed at students, youth, and the public. The goal is to instill a culture of financial discipline, savings, and prudent money management practices among Nigerians.

At the event, Tolani Jemi-Alade, Chief of Business Planning, Operations, and Resources at 9PSB, addressed the students, underscoring the importance of cultivating positive financial habits, particularly considering economic uncertainties. She stressed the need for young individuals to integrate into the formal financial system, stating,

“We encourage every young person with a regular income to open a bank account as an essential step towards financial independence and savings for future needs. Money is necessary for day-to-day transactions and to manage unforeseen circumstances. Early planning is crucial, as these needs are inevitable.”

Tolani further highlighted the significance of World Savings Day, as championed by CBN, which aims to raise awareness of financial literacy and promote a culture of saving, particularly among students and youth. She emphasized the importance of understanding and leveraging formal financial services for long-term financial security.

Oladimeji Saka, Lead for Retail Banking and Customer Acquisition at 9PSB, echoed these sentiments, noting that financial literacy should begin at an early age. He advised that parents play an instrumental role in guiding their children through transitional stages to adulthood, equipping them with the necessary financial knowledge to manage their finances responsibly.

In his remarks, the Vice Principal Academics, Mr. Romanus Emegwakor, who represented the Principal of Fountain Heights Secondary School, expressed his gratitude to 9PSB for their commitment to empowering students with financial knowledge.

“We are extremely appreciative of 9PSB for this invaluable financial literacy programme. It is crucial for our students to understand the significance of financial discipline, and we believe this initiative will help them develop the necessary skills to make informed financial decisions in the future,” he said.

World Savings Day is an annual global campaign dedicated to educating individuals, particularly the youth, on the importance of prudent financial planning and saving through formal banking systems.


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