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Worries over Arrests of Top Bankers for Alleged Terrorist Financing

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The banking industry and State Security Service (SSS) are embroiled in claims and denials over the continued detention of senior personnel of 13 Nigerian banks for alleged terrorist financing and money laundering believed to have been perpetrated by Aminu Suleiman Lamido, son of Alhaji Sule Lamido, Jigawa State governor.

The banks whose staff are affected are Fidelity Bank Plc, First City Monument Bank Plc (FCMB), Wema Bank Plc, Access Bank Plc, Skye Bank Plc, First Bank Nigeria Limited (FBN), Sterling Bank Plc, Diamond Bank Plc, Zenith Bank Plc, Unity Bank Plc, Ecobank Plc, Guaranty Trust Bank Plc (GTBank) and Citibank.

THISDAY reeported that the chief executive officers of the affected banks have continued to receive a barrage of phone calls from both foreign institutional investors and their foreign partners over the allegation.

Some financial market analysts have also warned that the development, which is being closely watched by the global financial community could make foreign banks shut down credit lines, not just to the affected banks, but to all the other local banks.

In addition, it may also lead to the withdrawal of funds from the Nigerian banking system by the banks that have international affiliations, international institutional investors and may hamper the performance of banks listed on international stock markets.

Some of the banks with foreign investors include Diamond Bank, which has the International Finance Corporation (IFC) and Actis as institutional investors. The bank had also issued a Global Depository Receipts (GDR) and had done a private placement in US dollars in the past.

Also, Zenith Bank which issued a GDR last year, is also listed on the London Stock Exchange (LSE).

In the same vein, GTBank which has investment by IFC, had issued both the GDR and Eurobond and is concluding plans to float another $400 million Eurobond. It is also listed on the LSE.

While First Bank and Fidelity Bank have respectively tapped from the Eurobond and GDR markets, Citibank and Ecobank are international banks.

In addition, FCMB also has foreign investor in form of Sabre Capital, while Access Bank has investments from IFC and FMO, the private sector investment arm of the government of Netherlands, and had issued a Eurobond and GDR.

Commenting on the development, the chief executive officer of a leading financial advisory firm, who preferred anonymity, said: “It will make things extremely difficult for Nigerian banks.

Firstly, if you remember in the last five years, Mallam Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria (CBN), has been applauded and acknowledged for cleaning the system and so for anybody to come out now to say there is rot in the system, puts a lot of question mark on what the CBN had done.

“Foreign banks that have availing credit to Nigerian banks were doing so on the grounds that the banking system is transparent and properly governed, so the allegation might make some of them to start having a rethink on their relationship with Nigerian banks.”

Continuing, he explained: “For a bank like GTBank that has plans for a roadshow to market its Eurobond, it cannot do so again until this allegation is sorted out. For banks like Zenith, Fidelity, First Bank, Ecobank, Citibank, FCMB, Access and Diamond that have foreign investments in form of Eurobond, GDR and other form of partnership, they will feel the heat, which is not good for the country.

“The situation has the capacity of limiting foreign investment and participation in the Nigerian banking system, especially at a time when government is talking about attracting more foreign investment. So we may start seeing the exit of some of these foreign investors to countries like Ghana or Cote d’ Ivoire if the situation is not properly managed.”


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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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