Business

Naira Notes: Why Talks With CBN, Banks’ CEOs Failed To Hold — Reps

Published

1 year ago

January 26, 2023

The ad-hoc committee of the House of Representatives constituted to interface with the Central Bank of Nigeria, CBN, and bank chief executive officers on the January 31 deadline for withdrawal of old naira notes said yesterday that late delivery of invitation letters to invitees stalled the meeting.

Chairman of the committee and majority leader of the House, Ado Doguwa, told his colleagues an hour after they had gathered for the meeting.

Recall that the time for the meeting was 3 pm but Doguwa did not enter room 301 of the new building in the House of Representatives, the venue of the meeting, until 4 pm.

By 4:05, a member of the House, Uyem Idem, was asked to say the opening prayers.

Thereafter, Doguwa told the members of the committee that they had scheduled to meet with the CBN officials yesterday (Wednesday) and subsequently take the bank CEOs today (Thursday).

He, however, said a communication received from the CBN liaison officer stated that due to late arrival of the letter, the bureaucracy could not work on it.

Doguwa said the meeting with the apex bank had been rescheduled for today by 1 pm, while that with bank CEOs would come up later.

He said: “This is the House ad-hoc committee to interface with the CBN and bank operators with regards to resolving the issue of the phasing out the strategy of the old naira notes and to bring into circulation the new naira notes, among other reasons.

“We also have other factors we have discussed on the floor of the House yesterday and ultimately, the House mandated this ad-hoc committee to come up with a strategy to engage the officials of the CBN and CEOs of the commercial banks.

‘’It is, therefore, my pleasure to, at this point inform members of the committee, first of all, that we scheduled today’s (yesterday) meeting based on the letter we have signed out only with officials of the CBN and we have scheduled bank operators to come up tomorrow (Friday).

“So, it is like we, ab initio, invited them separately based on the nature of the engagement. It is a fact-finding thing and like I always say, this is not something to witch-hunt anyone. It is a simple fact-finding mission by the parliament, which obviously holds the proxy of the Nigerian people. So, we decided to take them separately.

“We have scheduled today for the officials of the CBN and tomorrow for bank operators and CEOs of commercial banks and on that note, I would like to communicate with members of the public that based on communication I just received from CBN, it is that our letter of invitation got to the bank very late yesterday.

“You can all agree with me that the resolution was taken at the end of our sitting yesterday, January 24, 2023, and before we could finish the necessary procedures, the letters were sent to the CBN late.

‘’So, the liaison officer of the bank spoke to us this evening (yesterday) that they were not able to really act on the letter to allow for their engagement today.

“On this note, I would like to convey to this committee and members of the public and the press here with us that we have conceded to allow the CBN officials to come tomorrow (today) by 1pm, so we could engage them and immediately after the engagement with them, we would engage the bank operators.”

Banks warned against boycotting meetings Doguwa also warned the banks against boycotting the meeting, emphasizing that the summons of the House must be taken very seriously.

The chairman added that no unpopular policies hampering the economy of the country and affecting the people negatively would be allowed to sail through.

“For the purposes of clarification, I want to say without any fear of contradiction that the parliament is always an institution that represents the Nigerian people.

‘’When there is any need it calls for an invitation to any government employee like it is the case here with the CBN, the governor of the CBN, his directors, deputy directors, all departmental heads, I believe our own employees of the Nigerian people, and when there is a kind of summon from the institution of the parliament like this, we expect every up and doing employee to only respect that invitation.

“On this note, I want to say on behalf of the House of Representatives that we have taken this from the point of perhaps, giving them the leverage or benefit of the doubt that yes, the letter got to them late yesterday and on no account, I repeat, would we have a repeat of this failure tomorrow (today).

‘’None of us here is acting in his personal capacity. None of us here is acting for any personal reasons, especially on a matter like this where Nigerian people and economy are threatened by a lot of dangers by the policy of a government department.

“Those of here who are working for the Nigerian people, we cannot sit down here and watch policies of the government that are not unpopular, threaten the survival of our economy to continue.

‘’I hear some of them saying it is a matter they have decided. It is a matter that no one goes back about it. This is the supreme institution of Nigeria’s democracy and I want to say without any fear of contradiction that for whatever policy the government is undertaking, especially at a critical period like this, Nigerians must know and whoever is involved must know that definitely, the interest of the Nigerian people holds sway.

‘’So, there is no policy whatsoever that cannot be reversed, good or bad, as long as that policy or the reversal of that policy is going to be in the overall interest of Nigerians.

“We would not endanger our economy. We would also not allow anybody to endanger our economy. CBN must appear before this committee of the House of Representatives tomorrow (today) by 1 pm to discuss this very critical matter.

‘’It borders on the survival of our economy and our people, the businesses are shut down all over; agriculture is suffering. petty businesses in the villages are also suffering. I understand that in some places, even dowry, bride price is not being accepted. So, this is a serious issue,” Doguwa said.

Business

BREAKIN: NDIC Increases Maximum Deposit Insurance Coverage

Published

2 days ago

May 2, 2024

Editor

The Nigeria Deposit Insurance Corporation (NDIC) on Thursday increased the maximum deposit insurance coverage levels for Deposit Money Banks from N500,000 to N5 million.

The Managing Director of NDIC, Bello Hassan, announced this in Abuja at a press conference, stating that it takes effect immediately.

He said, “For Deposit Money Banks, the increase of the maximum deposit insurance coverage from N500,000 to N5,000,000, would provide full coverage of 98.98% of the total depositors compared with the current cover of 89.20%.

“In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of total value of deposits.

“The increase of the maximum deposit insurance coverage from N200,000 to N2,000,000, would provide full coverage of 99.27% of the total depositors compared with the current level of 98.76% and would increase the value of deposits covered by deposit insurance to 34.43% compared with 14.38% of total value of deposit, currently covered.

“The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.34% of the total depositors compared with the current 97.98% and would increase the value of deposits covered by deposit insurance to 21.04% compared with 10.77% of total value of deposit, currently covered.”

Hassan also stated that raising the maximum deposit insurance coverage for primary mortgage banks from N500,000 to N2,000,000 would provide full coverage for 99.99% of total depositors and increase the value of deposits covered by deposit insurance to 43.10% of the total deposit value, up from the current 40.60% cover.

The Corporation has also raised the maximum pass-through deposit insurance coverage for subscribers of Mobile Money Operators from N500,000 to N5,000,000 per subscriber.

Business

Dangote Speaks On Devaluation Of Naira

Published

2 days ago

May 1, 2024

Editor

Chairman of Dangote Industries Limited, Aliko Dangote has said that the devaluation of Naira created the biggest mess for the company in 2023.

Speaking at the annual general meeting of Dangote Sugar Refinery, Dangote said this affected lots of companies in the country.

He said: “We are doing whatever it takes to make sure that at the end of the day, we will be paying dividends because if you look at our dividends last year, it was almost 50 percent more so we will try and get out of the mess.

“The biggest mess created was actually the devaluation of the naira from N460 to N1,400. You can see almost 97 percent of the companies, especially in food and beverages businesses, none of them will pay dividends this year for sure but, we will try and get out of it as soon as possible.

“We want to see that at the end of the day, no matter how small, we will be able to pay some dividends, especially if there is a rebound of the naira.”

Business

Customers Panic As CBN Bans Opay, Palmpay, Others’ New Accounts

Published

4 days ago

April 30, 2024

Editor

Some bank customers have expressed panic as the Central Bank of Nigeria bans mobile money operators including fintech firms from onboarding new customers.

However, the Bank Customers Association of Nigeria backed the CBN directive.

The new directive will affect fintech companies such as OPay, Palmpay, Kuda Bank, and Moniepoint, from opening new accounts until further notice.

Reliable sources from three major fintechs who requested not to be mentioned as they were not permitted to speak, confirmed the development to The PUNCH on Monday.

The CBN’s move was linked to an ongoing audit of the Know-Your-Customer process of the fintechs, which have been under scrutiny in recent months over concerns around money laundering and terrorism financing.

It was gathered that the CBN had summoned some of the heads of fintechs to Abuja to discuss issues around KYC last week.

The CBN has not yet publicly commented on the directive to the fintech firms. The PUNCH’s attempts to reach the apex bank for comment were unsuccessful.

Several calls made to the telephone line of the CBN spokesperson, Hakama Ali Sidi, were not responded to as of the time of filing this report.

Also, the directive coincided with the court order that the Economic and Financial Crimes Commission (EFCC) obtained to freeze at least 1,146 bank accounts owned by various individuals and companies allegedly involved in illegal foreign exchange transactions.

The 85-page court order (document), which listed the bank account details suspected to be involved in illicit activities, was obtained by The PUNCH on Monday.

Justice Emeka Nwite, in a ruling on the ex-parte motion, moved by counsel for the anti-graft agency, Ekele Iheanacho, also granted the commission’s application to conclude the investigation within 90 days.

Part of the court document read, “That the applicant’s (EFCC) application is hereby granted as prayed.

“That an order of this honorable court is hereby made freezing the bank accounts stated in the schedule below, which accounts are owned by various individuals who are currently being investigated in a case involving the offenses of unauthorised dealing in foreign exchange, money laundering, and terrorism financing, to the extent that the investigation will be for a period of 90 (ninety) days.”

The EFCC, in the motion marked FHC/ABJ/CS/543/2024 dated and filed April 24 by Iheanacho, was heard by the judge the same day in the interest of national interest.

“The motion was brought pursuant to Section 44(2) and (K) of the 1999 Constitution; Section 34 of the EFCC Establishment Act 2004; Section 7(8) of the Money Laundering Prevention and Prohibition Act, 2022; and under the inherent jurisdiction of the court.”

The President of the Bank Customers Association of Nigeria, Uju Ogubunka, backed the CBN’s move to suspend new account opening on the affected platforms.

He told The PUNCH that the strict regulations that govern deposit money banks must apply to fintechs, and microfinance banks in order to ensure the integrity of the financial institutions.

He said, “Anything that can disrupt the system should not be permitted. If the platforms are being used for things that are against the regulations, I think the CBN decision is OK. I don’t see anything wrong with that. It behoves on the companies now to get their KYC right.

“Let them do what they are supposed to do. KYC applies to banks and other financial institutions that deposit money. It should also apply to them so that the regulators can understand what is going on and hold them accountable.”

On the other hand, Emmanuel Odunsi on X (formerly Twitter) welcomed the move, citing the need for better KYC processes to prevent scams and fraudulent activities.

“Their KYC isn’t that great. Lots of scammers are using their apps to defraud people.

“Most of the accounts were created by mining phone numbers, with subscribers’ permission. Almost every phone number has been linked to an account,” Odunsi said.

In October 2023, Fidelity Bank blocked transfers to OPay, Palmpay, Kuda, and Moniepoint due to concerns around KYC processes.

In response, the CBN introduced new KYC rules for all financial institutions in November 2023, which appeared to target fintech startups.

A source from Moniepoint said the company had complied with the directive, effectively halting new account creation on their platform. However, the source denied having anything to do with KYC.

“It’s just a regulation from the CBN, and we’ve complied. The real question is, why are fintechs always targeted,” he source argued.

“It has nothing to do with KYC; I am aware that the CBN communicated, but this particular issue dwells on accounts related to cryptocurrency transactions,” the source revealed.

The CBN has an ambitious target to increase overall financial inclusion to 95 per cent of the adult population by 2024.

With the new order, the target may be affected, as the company processes about 100 new accounts every day.

The source argued that fintechs had played significant roles in deepening financial inclusion in the country.

The company had deployed robust and reliable digital payment infrastructure that has facilitated an average monthly transaction value of $12bn for about 1.6 million businesses, it said last year.

A senior employee of PalmPay confirmed to The PUNCH that there was a CBN directive for fintechs to reassess their KYC processes.

This is causing a temporary pause in onboarding new customers, the source stated.

She clarified that the KYC review was a collaborative effort with the CBN, and fintechs were awaiting further instructions without a specified timeline for resolution.

Another source at OPay, who also declined to be named, said they were following the CBN’s directive and could not comment further.

“We don’t really have anything to say. It’s just a directive that we are following. The CBN has issued their directive.“

Fintech companies have faced increased regulatory scrutiny over their account opening processes.

Customers worry

However, some customers have also used social media, both on X (formerly Twitter) and Facebook, to express their worries and opinions on the matter.

Some customers are anxious about the safety of their funds, with Warisenibo Jumbo suggesting it’s best to transfer their money out of Opay.

Oye Niran wondered if their Moniepoint account was safe, stating, “Hope my Moniepoint account is safe.”

Larry Leanz questioned the rationale for keeping money on these platforms.

“But is it still safe to keep money there?, Leanz questioned.