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New CBN’s Cash Regime Takes Toll on Customers in the East

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Several bank customers remain stranded in banking halls in the Eastern Nigeria coal mining capital, Enugu Monday as a new Central Bank of Nigeria (CBN) monetary policy on cash withdrawals takes effect.

The new monetary regime, which was first test run in Lagos in January 2012 by the apex bank requires a cash-withdrawal-limit of N150, 000 (approximately $943.3) on third party bank cheque.

Early Monday customers milled disturbed in banking halls not used to cash withdrawal limits complained bitterly. They lamented their frustration at not being able to withdraw enough cash for their daily business transactions.

Nigerian entrepreneurs rely largely on huge cash transactions for daily business deals due to age-long lack of trust in the banking system. Several retailers also don’t trust third party cheques due to fraudulent practices.

Mallam Sanusi Lamido Sanusi, who was named, last week by the UK’s The Banker magazine as African Central Governor of the Year -2013 for the third consecutive year insisted the cashless policy is aimed at instilling financial discipline in the chaotic Nigerian business climate.

Boniface Chinwuba, a bank customer in Enugu said he needed N500, 000 to purchase some building materials, but could not do so because of the policy. Apparently ignorant of the policy, Chinwuba blame lack of adequate publicity.

“Look at the trouble I am passing through. In fact, I will pull my account from this bank,” said Chinwuba.

Mrs. Maria Okolo, a private school proprietress in the city also stated that she came to withdraw N300, 000 to pay her workers, but could not do so. She appealed for extension of time to enable customers adjusts to the new policy.

A survey at several microfinance banks reveal they were also cash strapped to service their customers who are mainly petty traders, artisans and other SMEs in the informal sector of the economy.

A microfinance bank operator who spoke in anonymity said they couldn’t get enough cash supply from the commercial banks. “Most times, we withdraw money from commercial banks to service our customers but with this development, it is now impossible,’’ said the official.

The policy stipulates a ‘cash handling charge’ on daily cash withdrawals or cash deposits that exceed N500, 000 for individuals and N3 million for corporate entities. 

According to the CBN, “the new policy on cash-based transactions (withdrawals & deposits) in banks, aims at reducing the amount of physical cash circulating in the economy, and encouraging more electronic-based transactions – payments for goods, services and transfers.

It notes that the policy aims to “drive development and modernization of our payment system in line with Nigeria’s vision 2020 goal of being amongst the top 20 economies by the year 2020.

An efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth.”

Amongst others, it also seeks to reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach.

The policy seeks also to improve the effectiveness of monetary policy in managing inflation and driving economic growth.
From July 1, the CBN hopes to extend the policy further to five more states across the country – Abia, Anambra, Ogun, Rivers and Abuja.

Subsequently, it directed banks to engage effective media campaigns to enlighten customers on the new cashless policy.
 


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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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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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