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Anxiety as Withdrawal, Deposit Charges Begin

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CBN
  • Anxiety as Withdrawal, Deposit Charges Begin

There are concerns over the fate of the nation’s financial inclusion project as the first phase of planned full implementation of the accompanying cash-less projects take full course today.

Although slated for April 1, which falls on the weekend, the full take off of the policy will begin today as financial institutions, markets and all corporate activities resume weekly operations.

As the new phase in the nation’s payments system begins, it is either the stakeholders have understood the rules and play by it or react negatively due to perception, with attendant effects on the overall goal of deepening financial inclusion.

Already, analyst said the move is timely and all about using various alternate channels for transactions aside from cash and has nothing negative to do with financial inclusion.

Meanwhile, the surprised rebound of speculators and the parallel market rates at the weekend, which closed at N394/$, against N375/$ on Wednesday, has been blamed on defiance to rules by some banks.

The development came just as Central Bank of Nigeria (CBN) sustained its dollar intervention in the market for more than five weeks, after it took a new policy direction to liberalise further the foreign exchange market.

According to the schedule of the cash-less policy drive, Lagos, Ogun, Abia, Kano, Anambra, Rivers states and the Federal Capital Territory has taken off.In these states, individuals can only withdraw or deposit money to the tune of N500,000 in a single bank account per day without charges.

This means that any withdrawal above N500,000 to N1 million will attract two per cent charge; between N1 million and N5 million, three per cent; and above N5 million will get 7.5 per cent charge.

On the other, deposits above N500,000 will attract 1.5 per cent charge; between N1 million and N5 million, two per cent; and above N5 million, three per cent.For corporate organisations, only withdrawal and deposit of N3 million will be without charges.

Deposits between N3 million and N10 million will get two per cent charge; above N10 million to N40 million, three per cent; and more than N40 million will be charged five per cent.On the other hand, withdrawals between N3 million and N10 million will be charged five per cent; above N10 million to N40 million, 7.5 per cent; and more than N40 million will be charged 10 per cent.

Meanwhile, the second phase will take off on May 1, comprising Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau states.Dispelling the fears of derailing financial inclusion projects, Executive Director, Finance, BGL Captal Limited, Femi Ademola, said the rural mass target in financial inclusion has no N500,000 daily transactions to make.

According to him, those with such amount are already in the financial system and have access to multiple channels of payment, which are free and without limit.“The policy is just about letting people do transactions without physical cash. That is where the world is going. You have chque, Point of Sale, transfers through ATM, mobile phone, Internet banking, even the latest USSD code. These are without charges. There is no discouragement and there is nothing to fear,” he said.

However, a reliable source from the apex bank told The Guardian yesterday that Nigerians are beginning to find out where the real problems are coming from, if banks at this point would have the audacity to tell wicked lies about CBN’s supply of forex to them.

“How can banks refuse to sell forex to retail segment now? How can they prove the claim that there is not enough supply for the retail segment? It is just that they cannot do as it pleases them. But they will hear from us soon,” the source said.

The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, at the weekend, told journalists that banks refused to sell the dollars as directed by the apex bank and lamented the reversed fortune of the naira at N394/$, more than 10 per cent depreciation. “CBN’s knack for last minute solution in recent times is the reason for the misfortune of the naira at the foreign exchange market.

“It is evident that the injection of liquidity to the interbank market rather than the BDC sub-sector is not effective and transparent for sustained exchange rate convergence and unification.

“About 20 banks get $80 million weekly for invisible transactions, while $20 million weekly is shared among 3000 CBN licensed BDCs nationwide. The banks will not help in this matter and transparency cannot be assured,” he said.

CBN, in a statement at the weekend, laid credence to Gwadabe’s claim, when it confirmed the worrisome development that some customers seeking to buy forex for business/personal travel allowances, medical and school fees are being frustrated by some banks with the false claim that the CBN is not allocating enough forex to them.

While the apex bank refuted the insinuations, which held down the free flow of forex in the liberalised retail segment of the market, it now urged any customer not attended to within 24 hours for BTA/PTA or 48 hours for tuition and medical fees to call 07002255226 or send an email to cpd@cbn.gov.ng, with the name and branch of the non-cooperating bank.

“Indeed, on a weekly basis, the CBN has been selling at least $80m to banks for onward sale to their customers for these invisible items. No customer should accept to buy forex from any bank at more than the currently prescribed rate of N360/$,” CBN’s spokesman, Isaac Okorafor, said.

He warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end users. Similarly, there are strong indications that CBN is set to inject more fund into the foreign exchange market with a view to ensuring liquidity in the interbank market and crashing the parallel market rate.

This is in addition to the planned increase in sale volume to the bureau de change operators from $8,000 to $10,000 dollars per week. The move by the apex bank seems to be returning calm among traders against earlier apprehension over the ability of the CBN to sustain the intervention.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Polaris Bank Set to Unveil Second Millionaire, Other Winners in its ‘Save & Win’ Promo

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Polaris Bank is set to unveil the second set of winners in its ongoing Save & Win Millionaire promo.

At the maiden draw, which took place on February 9, 2021, Lucky Okunzuwa, a customer with the Bank’s Akpakpava branch, Benin City in Edo State, emerged as the first millionaire of the promo.

In a statement by the Bank on Monday, it noted that like the first draw, the second set of winners will be determined through electronic means, where another millionaire and 60 other Nigerians will emerge winners with N100,000 consolation prize money each.

The Bank also encouraged Nigerians to still save a minimum incremental sum of N10,000 in three consecutive deposits of the remaining promo period to qualify and be one of the eight lucky winners to emerge millionaires in the promo.

The nationwide savings promotional campaign is expected to give away N26 million in total to the Bank’s existing and new customers who emerge winners.

The nationwide savings promotional campaign is expected to give away N26 million in total to the Bank’s existing and new customers who emerge winners.

Eight millionaires will emerge altogether alongside 180 lucky customers who will be rewarded with consolation cash gifts of N100,000 per person.

Meanwhile, the month of April will witness the grand finale, leading to the emergence of 60 winners of N100,000 each across the six geopolitical zones and six more millionaires of N1 million each across the six geopolitical zones, bringing the entire draw to a total of 188 winners.

Recall that the Managing Director/CEO of Polaris Bank, Innocent C. Ike, while kicking off the campaign in November 2020, noted that “the essence of the exercise, is to give back to customers and encourage savings amongst Nigerians”.

The campaign, Ike further explained, “is a reward for traders, artisans, public servants and indeed professionals who in spite of the challenging times, are able to put aside some money as savings”.

He reiterated that in a not-so pleasant time, there is a compelling need to save – not only to win a prize – but also to plan for the rainy day.

He disclosed that “both current and new savings account customers of the Bank, are eligible to participate in the promo”.

Savings Account accessibility is simple and swift in Polaris Bank.

Prospective customers can dial 8330# on their phones to follow the prompt or simply create or reactivate their own savings account from their devices by visiting: https://accounts.polarisbanklimited.com/opening/ or any of the Bank’s branches across the country.

Winners will emerge through a transparent, electronically generated process that will be supervised by relevant regulatory institutions.

Polaris Bank is a future-determining bank committed to delivering industry-defining products and services across all sectors of the Nigerian economy.

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Finance

US, Japan National Debt Surges by $8 Trillion in the Last 12 Months, China Recovers

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Forex Weekly Outlook March 6 - 10

The coronavirus-induced recession has seen countries that were already battling a skyrocketing national debt plunge into more crisis. 

Data analyzed by Finbold indicates that the top five countries globally with the highest public debt added $9.17 trillion between March 2020 and March 2021. The United States tops with the debt growing by $4.57 trillion from $23.45 trillion to $28.0.2 trillion.

Elsewhere, Japan’s public debt has grown from $11.42 trillion to $14.64 trillion. Cumulatively, the two countries have added $7.79 trillion in debt. Interestingly, the analysis shows that China’s national debt dropped by $0.57 trillion from $8.56 trillion to $7.99 trillion among the selected leading economies.

In terms of the country’s national debt percentage growth, Germany tops with 35.02%, followed by Japan at 28.2%, and the U.S. ranks third at 19.29%. Italy’s debt grew by 10.8%, with the UK standing at 7.19%.

US debt crisis complicated by Covid-19 response

The record surge in national debt for the covered countries is mainly due to the coronavirus pandemic. The health crisis triggered the most profound economic downturn, with millions of people losing jobs and businesses temporarily or permanently closed; hence, revenues shrunk while spending soared.

Even before the pandemic, the United States was already battling a huge national debt crisis. The situation was further complicated after Congress approved several stimulus packages for relief, widening the debt. Furthermore, the low-interest rates meant that the US had to shoulder a heavier debt burden.

Similarly, Japan’s high national debt stems from the country’s response to the health crisis. The stimulus spending also put more pressure on the already dire public debt.

China’s pandemic response helps lower public debt

Despite being the virus epicenter, it was controlled swiftly, with economic activities resuming normally. There was balance between spending and revenue generation, meaning the deficit amount was low over the last 12 months.

China was also able to inject more money into the economy after becoming a key exporter of products needed to fight and curb the coronavirus pandemic. For instance, Asian nations exported a significant amount of face masks and ventilators to countries that lacked the capacity to produce their own.

Away from the pandemic response, China’s declining public debt ties down the policy. In recent years the country has become less reliant on using credit to handle economic slowdowns. Amid the pandemic, policymakers were even reluctant to over-use debt to hit growth targets.

Overall, most countries globally have enacted a massive amount of monetary and fiscal stimulus to prevent a deep and prolonged recession, in return increasing the public debt burden. However, it appears there has been little effort to balance the coronavirus response with solving the national debt crisis.

The surging national debt for countries like the US is worrying since it has since surpassed its Gross Domestic Product (GDP) of $21.59 trillion, according to the U.S. National Debt Clock. It is an indicator the country might have problems repaying the loans.

With the debt in the unstainable territory for some countries, it might generally impact the government’s ability to tackle future economic downturns.

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The Africa Digital Inclusion Facility Approves $1.3m Grants for Two Research to Enhance Women’s Digital Access to Loans and Micro-insurance

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The Africa Digital Inclusion Facility approves grants worth $1.3 million for two research efforts to enhance women’s digital access to loans and micro-insurance.

The African Development Bank has approved two grants for research that will increase African women’s access to a range of digital financial services including loans and micro-insurance.

The grants, for $1 million and $300,000 respectively, will be disbursed through the Africa Digital Financial Inclusion Facility, a blended finance vehicle supported by the Bank, to two financial technology firms, Pula Advisors Kenya Ltd., and M-KOPA Kenya Ltd.

Pula Advisors will use the $1 million for research of social, cultural and economic factors that impact women farmers’ access to micro-insurance in Kenya, Nigeria and Zambia. Research findings will inform the design and implementation of gender-centric insurance products. The project will be undertaken over a 3-year time frame.

“This grant funding will be used to leverage technology to develop innovative and responsive loan and insurance products that can spur productivity and inclusion, especially for our women smallholder farmers and traders.” said Sheila Okiro, the Bank’s Coordinator for ADFI.

The three-year project will have three phases: product development; piloting; and scaling; the outcomes are expected to benefit 360,000 farmers, 50% of them women, as well as boost farm yields by up to 30%. This will also raise incomes and enhance household and national food security.

M-KOPA will use the $300,000 grant funding for research involving 250 women and 250 men in Kenya’s Kisumu, Eldoret and Machakos counties. The company will assess the barriers to and opportunities for women’s access to digital financial services and financial literacy programmes via smartphone, and use the research insights to design a financial services app that is relevant to small-scale women traders.

The project, approved by the Bank on 9 February, 2021, will benefit women with no or limited access to financial services that run small informal businesses. Once developed, the mobile app will be used to pilot small loans to the women traders.

Both projects align with ADFI’s digital products and innovation and capacity building intervention pillars as well as its cross-cutting focus on gender inclusion, a thematic running across all its interventions.

The PULA grant approval meets African Development Bank strategic goals, including the Ten-Year Strategy, two High-5 priority areas—feed Africa and improve the quality of life for Africans— and the financial inclusion strategies of Kenya, Nigeria and Zambia.

The M-KOPA project is aligned with the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program that seeks to increase access to finance for women.

ADFI is a pan-African initiative designed to accelerate digital financial inclusion throughout Africa, with the goal of ensuring that 332 million more Africans, 60% of them women, gain access to the formal economy. The Facility was formally launched in June 2019 at the Bank’s Annual Meetings in Malabo, Equatorial Guinea. Current ADFI partners are the French Development Agency (AFD); the French Treasury’s Ministry of Economy and Finance; The Government of Luxembourg’s Ministry of Finance; the Bill and Melinda Gates Foundation; and the African Development Bank, which also hosts the fund.

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