VOICE OF THE PEOPLE

Tag: CBN

  • CBN Directs Banks to Lift Restrictions on 440 Accounts

    CBN Directs Banks to Lift Restrictions on 440 Accounts

    The Central Bank of Nigeria (CBN), on Tuesday ordered banks to vacate a Post-No-Debit (PND) restriction earlier imposed on bank accounts of 440 individuals and companies.

    This was as it communicated to banks that it would resume the enforcement of the Loan-to-Deposit Ratio (LDR) policy effective July 31, 2023.

    However, citing key policy reviews particularly the recent deregulation of petrol price and transition to a unified and market-determined exchange rate – with the attendant inflationary concerns, the CBN’s Monetary Policy Committee (MPC) on Tuesday resolved to increase the Monetary Policy Rate (MPR), also known as the benchmark interest rate by 25 basis points to 18.75 per cent from 18.5 per cent.

    The PND is an instrument through which the CBN gives powers to stop customers from operating their bank accounts, with the permission of the courts.

    The central bank conveyed the vacation of restriction in circular, dated July 25, 2023 which was signed by A.M. Barau, on behalf of the CBN Director, Banking Supervision Department,  and addressed to all banks.

    The apex bank further mandated commercial banks to inform the concerned customers of the vacation accordingly.

    Addressing journalists after the two-day Monetary Policy Committee (MPC) meeting in Abuja, the CBN acting Governor, Mr. Folashodun Shonubi, said the modest increase in the benchmark interest rate was targeted at curtailing potential uptick in inflationary pressures resulting from the policy changes.

    Shonubi, also clarified that the current volatility witnessed in the foreign exchange market was driven by the fact that the market needs to find its level, adding that there’s a pent-up demand which current supply may not be sufficient to satisfy.

    He said the floating of the naira and removal of petrol subsidy were likely to sustain upward pressure on domestic prices in the short to medium term especially considering the negative impact the proposed palliatives would have on liquidity.

    The acting CBN governor also insisted that previous hike in MPR had continued to make quite a lot of difference by moderating the rate of increase in the prices of goods and commodities.

    According to him, without the tightening stance, the headline would have spiraled out of control.

  • CBN Revokes 2,991 BDC Licences

    CBN Revokes 2,991 BDC Licences

    The Central Bank of Nigeria, CBN has reduced the number of Bureau de Change, BDC dealers to 2,991 from the over 5,689 previously approved.

    The apex bank yesterday published a list of approved BDCs which revealed that the licenses of 2,698 BDCs have been revoked.

    You will recall that a similar list was published by the apex bank last year, which approved 5,689 black market dealers.

    The number of operators has experienced substantial growth, increasing from 74 in 2005 to 5,689 in 2021.

    Former CBN governor, Godwin Emefiele, later prohibited the sale of foreign exchange to BDCs due to concerns about round-tripping and involvement in illicit financial activities.

    Under President Tinubu’s administration, recommendations were made to implement key reforms such as increasing the capitalization requirements for BDC operators and allowing Nigerian banks to act as primary dealers in the forex market

  • CBN, BILL GATES PARTNER ON FINANCIAL INCLUSION

    CBN, BILL GATES PARTNER ON FINANCIAL INCLUSION

    The Central Bank of Nigeria and the Bill and Melinda Gates Foundation have finalized plans to drive financial inclusion in the country.

    According to a statement from the apex bank on Sunday, the two groups recently held a strategic meeting on how to deepen collaboration on financial inclusion in Nigeria.

    During the meeting, the CBN’s Acting Governor, Mr Folashodun Shonubi, reiterated the commitment of the apex bank to continually partner with BMGF and other development partners to explore innovative solutions for driving access to finance.

    The acting CBN governor also noted that the move for financial inclusion in Nigeria faced a number of challenges

  • CBN Orders Banks to Regularly Monitor Political Appointees’ Accounts

    CBN Orders Banks to Regularly Monitor Political Appointees’ Accounts

    The Central Bank of Nigeria (CBN) has ordered banks and other financial institutions to ensure regular monitoring and screening of accounts belonging to Politically Exposed Persons (PEPs) in Nigeria.

    The apex bank instructed that the accounts of such persons should be subject to periodic review and that the frequency of such reviews should be determined by the risk of the customer and documented appropriately.

    This was contained in a circular to banks and other financial institutions on Friday.

    In the circular signed by the Director of Financial Policy and Regulation Department, Chibuzor Efobi, the CBN said transactions and activities should be scrutinised for money laundering and terrorist financing among other risks.

    Emphasising the essence of the directive, the CBN said such persons posed a high risk of money laundering, financing of terrorism and proliferation financing due to the tendency for the individuals holding such positions to misuse their power and influence for personal gain or advantage to themselves, close family members and associates.

  • CBN ORDERS BANKS TO REQUEST CUSTOMERS’ SOCIAL MEDIA HANDLES, OTHER DETAILS

    CBN ORDERS BANKS TO REQUEST CUSTOMERS’ SOCIAL MEDIA HANDLES, OTHER DETAILS

    The Central Bank of Nigeria (CBN) has issued new regulations mandating financial institutions to gather additional customer information, including social media handles, email addresses, telephone numbers, and residential addresses.

    The move aims to strengthen the identification process within the banking system.

    The CBN stated that these regulations were established to enhance customer due diligence measures for financial institutions under its regulatory oversight.

    Under the customer identification section, the CBN specified that financial institutions must identify their customers, whether they are permanent or occasional, natural persons or legal entities, or legal arrangements.

    The CBN also stated that individuals must provide an unexpired passport, national identification card, residence permit, social security records, or driver’s license as proof of identification.

    Additionally, financial institutions are required to gather details regarding the type of account, nature of the banking relationship, signature, and politically exposed person status.

    The document also outlines separate requirements for legal entities and legal arrangements. The CBN emphasized that these regulations apply to all financial institutions under its supervision.

  • CBN REMOVES SAVING, WITHDRAWAL LIMITS ON DOMICILIARY ACCOUNTS

    CBN REMOVES SAVING, WITHDRAWAL LIMITS ON DOMICILIARY ACCOUNTS

    The Central Bank of Nigeria, CBN lifting the limits placed on domiciliary accounts.

    In a statement by the CBN on Sunday, the new regulation allowed account holders to deposit freely, have unrestricted access to funds in accounts, and make up to $10,000 withdrawals daily.

    The statement directed that ordinary domiciliary account holders should have unfettered and unrestricted access to funds in their accounts.

    The CBN made this decision following a Bankers’ Committee meeting held to discuss the implementation and implications of the policy changes for the banking public.

  • CBN SPENDS N800BN ON CURRENCY PRODUCTION, DESTRUCTION

    CBN SPENDS N800BN ON CURRENCY PRODUCTION, DESTRUCTION

    The Deputy Governor, Financial System Stability, Central Bank of Nigeria, Aisha Ahmad, has disclosed that the amount spent on maintaining the naira has increased by N10bn annually.

    The deputy Governor who revealed this on Friday during her appearance before the House of Representatives to defend CBN’s new cash withdrawal limits policy, attributed over 90 per cent of currency management costs to banknote production.

    A former CBN deputy governor, Dr Kingsley Moghalu, had earlier disclosed that the apex bank spends about N150bn annually to maintain the naira.

    He stated that the amount was used to produce, store, transport, protect and destroy the naira notes every year.

    Going by the CBN Deputy Governor’s diclosure of N10bn increase, the apex bank has spent N800bn between 2017 and 2021 on the production, storage, transportation and destruction of the currency.

    In her presentation, Ahmad noted that currency management was a key function of the apex bank as enshrined in Section 2(b) of the CBN Act, 2007, noting that the integrity of the currency and efficient supply of banknotes were indicators of a performing central bank, especially in predominantly cash-based economies such as Nigeria.

     

  • HOUSE OF REPS ORDERS CBN TO SUSPEND NEW CASH WITHDRAWAL LIMIT

    HOUSE OF REPS ORDERS CBN TO SUSPEND NEW CASH WITHDRAWAL LIMIT

    House of Representatives asked the Central Bank of Nigeria (CBN) to halt the implementation of the new cash withdrawal policy slated for January 9, 2023 pending compliance with the provisions of the Act establishing the bank.

    The House also summoned CBN Governor Godwin Emiefele in accordance with the provisions of the Central Bank Act to brief the Chamber on several policies of the bank in recent times.

    There was anger in the House on Thursday as members took turns to condemn the new cash withdrawal policy, saying it will grossly affect small businesses and the economy since most rural communities don’t have access to banks.

    However, following a point of order raised by Mark Gbillah on the provisions of the Central Bank Act, the

    House directed the CBN Governor to appear before the House on Thursday, December 15, 2022 to brief the House on why the policy should be allowed to stand.

    Sponsor of the motion, Magaji Da’u Aliyu, said the new policy by the CBN, which limits daily cash withdrawal to N20,000 daily should not be allowed to stand as it will adversely affect the Nigerian people, especially those running small-scale businesses.

    He stated further that while the country was trying to come to terms with the decision to redesign the currency, the CBN was coming up with yet another policy that will adversely affect the masses without proper advocacy.