- CBN Moves to Mitigate Risk in USSD Transactions
As part of efforts to mitigate risk by bank customers that carry out transactions through Unstructured Supplementary Service Data (USSD), the Central Bank of Nigeria (CBN) has unveiled to members of the public an exposure draft on the regulatory framework for banking platform.
The central bank stated this in the draft framework that was posted on its website thursday.
It pointed out that the implementation of the system in Nigeria has created multiple USSD channels to customers, thereby increasing their exposure to risk, without common standard for all.
The proposed framework, according to the CBN, therefore seeks to establish rules and risk mitigation considerations when implementing USSD for financial services offering in Nigeria.
It noted that USSD based financial transactions require end-to-end encryption to protect the integrity of the financial information.
The mobile phone has become a verifiable tool for enhancing financial inclusion with the advent of mobile payments, m-commerce, m-banking and other implementation fforei nancial transactions based on mobile money.
The providers of mobile-based financial services have options of adopting varying technologies for enabling access and transmitting data including SMS, USSD, interactive voice response (IVR) and wireless application protocol.
The central bank pointed out that recently, providers of mobile telephony-based financial transactions are increasingly adopting USSD technology while the range of services supported by their mobile transactions services using the USSD channel is broadening rapidly.
“Among financial services provided through the channel include account opening, balance and other enquiries, money transfer, airtime vending, bill payment, internet/mobile banking detail retrieval, and one-time password,” it added.
The USSD technology is a protocol used by the GSM network to communicate with a service provider’s platform. It is a session based, real time messaging communication technology which is accessed through a string which starts normally with asterisk (*) and ends with gas (#). It has a shorter turnaround time than SMS and unlike SMS, it does not operate by store and forward which indicates that data are neither stored on the mobile phone or on the application. USSD technology is considered cost effective, more user-friendly, faster in concluding transactions, and handset agnostic.
“The vast applications of the USSD technology in terms of available service have raised the issue of risks inherent in the channel. In this regard, concerns have been expressed on the likely exposure of CBN approved entities to the possible breaching of the USSD-based financial services in view of likely vulnerabilities in the technology and the ever growing threats.
“Furthermore, the implementation in Nigeria has created multiple USSD channels to customers, thereby increasing their exposure to risk, without common standard for all.
“This framework therefore seeks to establish rules and risk mitigation considerations when implementing USSD for financial services offering in Nigeria.
USSD based financial transactions requires end-to-end encryption to protect the integrity of the financial information,” it stated.
To this end, it stated that all providers of USSD-based financial services shall among other things, put in place a proper message authentication mechanism to validate that request/responses are generated through authenticated users; use secure USSD communication channels with a strong encryption mechanism; and not use USSD service to relay details of other electronic banking channels (in case of banks), to their customers, to prevent compromise of other electronic banking channels through the USSD channel.
Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc
The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.
His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.
The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.
FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).
The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.
For more information about FCMB Group Plc, please visit www.fcmbgroup.com.
COVID-19: CBN Extends Loan Repayment by Another One Year
Central Bank Extends One-Year Moratorium by 12 Months
The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.
The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.
In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.
The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.
“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.
“Following the expiration of the above timelines, the CBN hereby approves as follows:
“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.
“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”
It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.
To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.
MTN Nigeria Generates N1.35 Trillion in Revenue in 2020
MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020
Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.
The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.
Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.
This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.
MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.
MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.
The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.
Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.
MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.
While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.
The number of shares issued and fully paid as at year-end stood at 20.354 million.
MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.
“Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.
“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.
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