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Uwaleke, ACMAN Boss Urges CBN to Set Up Whistle-Blower System

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Uche Uwaleke, president, Association of Capital Market Academics of Nigeria (ACMAN) has urged the  Central Bank of Nigeria (CBN) to set up a whistle-blower system to assist in its implementation of recent guidelines and policies.

Uwaleke, ACMAN Boss Urges CBN to Set Up Whistle-Blower System

Uwaleke, also a renowned Professor of Capital Market, gave the advice at a media briefing on recent financial stability measures taken by the CBN and their likely impact on the nation’s capital market.

According to Uwaleke, aside the raft of COVID-19 interventions through the banking system which require close monitoring, the financial sector has recently witnessed a number of measures by the CBN designed to stabilize it and possibly insulate it from the negative impact of the pandemic.

“These include the Global Standing Instruction designed in part to reduce the Non-Performing Loans in the banking industry as well as measures that directly impact the liquidity in the forex market’.

“In order to contextualize the CBN’s recent measures regarding forex, it is pertinent to realize that the Q2 2020 negative growth in real GDP, high inflation rate, increase in inflation and downturn in virtually all macro indicators are all partly attributed to scarcity of forex following collapse in oil price since oil revenue accounts for over 90% of our forex receipts. This precarious supply situation is excercebated by spurious demand for forex, activities of speculators and sharp practices. So, the CBN is faced with a double Whammy sort of situation’.

He listed part of the sharp practices which exert pressure in the forex market as the over-invoicing of products imported into the country due to the activities of middle men arguing that, requiring banks to raise Form-M only in favour of a supplier as opposed to routing payments for imports through agents will go a long way in reducing the pressure in the forex market especially if the product price verification mechanism the CBN is putting in place is effectively implemented.

He equally commended the directive by the CBN to Exporters to ensure that all export proceeds are repatriated as a measure capable of boosting forex supply if complied with. He urged the CBN not to hesitate to apply sanctions on violators to serve as deterrent. According to him, ‘this is the time for the apex bank to wield the big stick, not mere slap on the wrist, on any Deposit Money Bank that flouts the Form-M order regarding third parties’.

‘I have not stopped wondering where people who hawk forex in the black market get their hard currencies. The CBN should device means of checking round tripping to ensure that the banks are not diverting forex to the parallel market. Ditto for BDCs especially now that the Bank has announced plans to resume sale of forex to the BDCs’

Uwaleke believes that improved liquidity in the forex market will rub-off positively on the capital market but thinks that the real challenge now is how to ensure that these laudable measures are not circumvented thereby defeating the purpose for which they were put in place. He therefore urged the CBN to put in place a comprehensive Whistle-Blower System to support the effective execution of these measures.

On the proposed WBS, he goes on to explain: ‘’I am not referring to the one set up by the Federal Ministry of Finance some time ago. I am also aware of the Whistle-Blower policy statement contained in Section 5 of the CBN Revised Code of Corporate Governance for Banks and Discount Houses which requires banks to have a whistle-blowing policy that contain mechanisms, including assurance of confidentiality, that encourage employees and stakeholders to report any unethical activity to the bank or the CBN. Again, the comprehensive WBS is different from the Customer complaints mechanism handled by the Consumer Protection department of the apex Bank.

‘I am talking about a facility that allows customers, shareholders, NGOs and other members of the public, who may not be stakeholders of a bank, to report to the CBN any observed wrongdoing by a bank or non-bank financial Institution akin to the whistle-blower policy of the South African Reserve Bank. Through this system, the public can report any alleged violation of the guidelines or directives of the CBN especially in relation to forex. It goes without saying that whistle-blowers who inform regulators of suspected instances of infractions, especially at this time, can be a vital source of information to support regulation against sharp practices’.

Uwaleke is convinced that following the example of South Africa, the WBS will help rein-in misconduct in Nigeria’s financial markets. ‘Whether this should involve monetary incentives to individuals who come forward to report possible violations is left for the CBN to figure out’ he noted.

 

 

 

 

 

 


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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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