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CBN Orders OFIs to Enroll in Credit Risk System by August 1

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The Central Bank of Nigeria has said the enforcement of Section 3.1 (a) of the extant guidelines on  Credit Risk Management System (CRMS) that captures the “submit before disbursement” requirement shall henceforth apply to all Other Financial Institutions (OFls) as from August 1, 2022.

The apex bank said under the provisions of the regulatory guidelines for the redesigned CRMS for commercial, merchant, and non-interest banks issued on February 27, 2017, are now applicable to all OFIs in the country.

The central bank issued the directive in a circular distributed to OFIs, dated May 24, 2022, which was signed by its Director, Financial Policy and Regulation Department, Chibuzo Efobi.

Investors King recalls that the CBN had said it will extend its Credit Risk Management System to Other Financial Institutions (OFIs) operating in Nigeria to protect them from bad debtors.

The circular ordered OFIs to ensure customer compliance to the 10-digit Nigeria Uniform Bank Account Number (NUBAN) format, tagged with Bank Verification Number (BVN) or Tax Identification Number (TIN) for individual and non-individual accounts respectively of the account holder.

“The OFIs are requested to profile the information on the Nigeria Inter-Bank Settlement System Plc’s (NIBSS) Industry Customer Accounts Database (ICAD) not later than June 20, 2022,” the circular read in part. 

The CBN emphasised that the provision of these data is important to enrollment in the CRMS going forward and that the circular was further to various engagements with the OFIs with respect to deploying the credit risk requirement.

The CBN however, warned that failure by the OFIs to adhere to the stipulated timelines would attract appropriate sanctions. 

The CBN had in April 2021 given Microfinance Banks (MFBs), Development Finance Institutions (DFIs), Primary Mortgage Banks (PMBs), and Finance Companies (FCs) up to May 14, 2021, to also ensure full compliance with its CRMS rules. 

To ensure full compliance, the CBN had also advised the OFI operators to conclude the tagging of all live credit files of individuals and non-individual borrowers with BVN and TIN respectively by May 14, 2021.

The central bank pointed out that the move was part of efforts to promote a safe and sound financial system in Nigeria through the introduction of the CRMS to improve risk management in all financial institutions to prevent predatory borrowers from undermining the banking system.

“With the successful implementation of the CRMS in deposit money banks, it has now become expedient to commence the enrolment of OFIs on the CRMS platform,” the banking regulator added. 

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Finance

CBN to Launch USSD Code for eNaira Next Week

The Central Bank of Nigeria (CBN) has announced plans to launch the Unstructured Supplementary Service Data (USSD) code for eNaira transactions next week.

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The Central Bank of Nigeria (CBN) has announced plans to launch the Unstructured Supplementary Service Data (USSD) code for eNaira transactions next week.

Godwin Emefiele, the governor of CBN, disclosed this at the Grand Finale of the 2022 eNaira Hackathon held in Abuja on Thursday.

The eNaira is the Central Bank of Nigeria’s virtual currency, basically a digital form of the Nigerian Naira.

According to Emefiele, Nigerians can also open an eNaira wallet on any mobile phone via a designated USSD code. Explaining the process, the CBN governor said Nigerians only need to dial *997# on their mobile phones to perform transactions.

He said “Nigerians, both banked and unbanked, will be able to open an eNaira wallet and conduct transactions by simply dialling *997 from their phones.

“Shortly after this, both merchants and consumers with bank accounts can use the NIBSS Instant Payment (NIP) to transfer and receive eNaira to any bank account.

“This will further deepen the integration of the eNaira with the existing national payment infrastructure”.

“The CBN will increase the level of Financial Inclusion in the Country because just like the Naira, the eNaira is expected to be accessible to all Nigerians. And would provide more possibilities to bring in the unbanked into the digital economy.”

In May 2022, Emefiele said central banks from various African nations and across the world are now studying Nigeria’s eNaira project.

Emefiele said, “We feel delighted with what we are doing in the area of the Central Bank Digital Currency, CBDC. What we are doing in the area of eNaira is attracting the interest of different countries in the world,” Emefiele said during an experience-sharing tour of the CBN’s CBDC (eNaira) by officials of the Bank of Uganda in Abuja.

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FMAN Elects New Excos as Coronation Asset M.D, Aig-Imoukhuede Emerges as President

FMAN has elected the Managing Director of Coronation Asset Management Limited, Mr. Aigbovbioise Aig-Imoukhuede as the new President-elect of the association.

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Fintech CEO: Rate Hikes & Inflation Spell Different Reality than Stock Market

Since its low in June, the S&P has seen a bump of 18%, while the NASDAQ has risen roughly 20%

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Since its low in June, the S&P has seen a bump of 18%, while the NASDAQ has risen roughly 20%. This week, both Morgan Stanley and BlackRock analysts have noted that the recent bounce likely won’t continue. One Fintech exec, who has been sounding the warning bells on the economy for the better part of the past year, speaks on the current state of affairs.

“As soon as we saw the trajectory of the pandemic-related spending bills, anybody with basic economic knowledge knew that inflation was going to be a concern. What most didn’t anticipate was the land war in Eastern Europe that only exacerbated energy costs and supply chain issues,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“As inflation, which was nudged higher by pandemic-related supply chain shortages which still haven’t fully abated, began to affect household budgets, it was clear that rate hikes were coming. The 75 basis point hikes were historic, but all indicators show that additional increases will be necessary. The increases are only starting to ripple across the economy,” said Gardner.

“There was some excitement over July’s CPI, but the reality is that this economy isn’t back on track. The excitement and celebration is a bit too soon, and I think the fundamentals still show that. Given the market’s recent boon, I think you’re starting to see an influx of FOMO, and that’s not painting the full picture,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Right now could be a great time for companies to work on new projects and get them ready to bring to market. It is a great time for R&D, and, for the companies that planned for this economic upheaval, it is a time to poach top talent that find themselves laid-off. In particular, it is a great time for startups that just completed a major funding round. They’ll have the financial resources to weather the storm while competitors may begin to struggle with liquidity,” said Gardner.

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