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Banking Sector

Stanbic IBTC Bank Moves to Enhance Cashless Transactions, Urges Reduction in Physical Cash Payments

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Stanbic IBTC - investorsking.com

Stanbic IBTC Bank has expressed readiness to enhance the cashless policy of the Central Bank of Nigeria with hitch-free digital transactions.

Stanbic IBTC bank further called on Nigerians to make use of digital payment platforms rather than relying on physical cash transactions.

 Investors King recalls that the CBN had recently issued a new policy on cash-based transactions, stipulating a charge for daily cash transactions above N500,000 for individuals and N3m for corporate organisations.

This policy was introduced to encourage the adoption of electronic payments and lessen the amount of physical cash in circulation, Investors King had learnt. 

It will also reduce the charges of banking services, enhance financial inclusion, make monetary policy effective to control inflation which will in turn boost the Nigerian economy.

Explaining the benefits of the policy, the Head, Partnerships, Stanbic IBTC Bank, Omolara Osunsoko, said the cashless policy is geared towards improvement in financial transactions through digital delivery channels.

Osunsoko said the technology-driven means will assist both the buyers and sellers transactions easier and more secure which will further improve the standard of living of the citizens.

“The policy will be beneficial to consumers and merchants as we transit to a digital way of transacting that is convenient, secure and seamless. It will also help minimise financial risks and support business operations and reconciliation,” she said.

The Head, Digital and eCommerce, Stanbic IBTC Bank, Olutimi Ibrahim, reiterated the bank’s resolve in following the Central Bank’s cashless policy directive and innovatively coming up with more seamless means of electronic payment for better delivery.  

“At Stanbic IBTC, we stand for innovative banking. This leads to creating digital solutions and optimising our platforms to perform instant transactions, eliminating the need to visit a branch. With the CBN’s directive on cashless policy, we are offering customers an array of electronic payment options for a seamless digital banking experience,” he assured.

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Banking Sector

Tinubu Aide Urges CBN Governor to Consider Political Impact of Economic Reforms

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Central Bank of Nigeria (CBN)

Tunde Rahman, a senior aide to Nigerian President Bola Tinubu, has said Central Bank of Nigeria (CBN) Governor Olayemi Cardoso must start factoring in the political effects of CBN’s decisions.

In his piece, titled “Navigating the Dilemma: Political Considerations in Economic Reforms,” sheds light on the complexities facing Cardoso as he seeks to stabilize Nigeria’s economy.

Rahman’s commentary shared through the Presidency’s official channels, acknowledged the challenges Cardoso confronts, particularly regarding the country’s currency devaluation and the contentious plan to relocate CBN staff from Abuja.

While Rahman refrained from direct criticism of Cardoso’s policies since his appointment by Tinubu, he underscored the necessity for the CBN governor to strike a delicate balance between economic imperatives and political sensitivities.

The upcoming meeting of the monetary policy committee presents a pivotal juncture for Cardoso, where discussions are expected to revolve around potential interest rate hikes to counter inflation and bolster the national currency.

Rahman’s insights underscore the high stakes involved in these decisions, especially given the public outcry over soaring living costs and inflation rates nearing three-decade highs.

Cardoso’s commitment to orthodox central banking, following a period marked by blurred monetary and fiscal policy lines, reflects his determination to navigate Nigeria’s economic landscape with prudence.

Nonetheless, Rahman’s op-ed serves as a reminder of the intricate interplay between economic reforms and political realities, urging Cardoso to exercise flexibility in policymaking, especially in matters with broader political implications.

As Nigeria grapples with economic challenges, the spotlight remains firmly fixed on Cardoso and the CBN’s response to the nation’s evolving financial landscape.

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Banking Sector

CBN’s New Foreign Currency Gateway Bank Raises Concerns Over Nigerian Banks’ Liquidity: Fitch Ratings

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Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN)’s announcement of a new Foreign Currency Gateway Bank has stirred concerns over the liquidity of Nigerian banks, according to recent commentary from credit rating agency Fitch Ratings.

The proposed bank, designed to centralize correspondent banking activities, has prompted Fitch to issue cautionary remarks regarding its potential impact on the banking sector’s foreign currency (FC) liquidity.

Governor of the CBN, Dr. Olayemi Cardoso, unveiled plans for the Foreign Currency Gateway Bank to streamline and centralize correspondent banking functions, currently dominated by two major banks.

The initiative is part of the CBN’s efforts to address Nigeria’s persistent forex crisis.

Fitch Ratings expressed apprehension, highlighting the potential negative effects on the banking sector’s FC liquidity.

The agency noted that the centralization of correspondent banking activities, coupled with recent measures by the CBN, might exacerbate liquidity challenges for Nigerian banks.

Furthermore, Fitch cautioned that the recent devaluation of the naira, coupled with the CBN’s circular prohibiting banks from holding net long foreign currency positions, could further strain FC liquidity.

The prohibition on net long FC positions may leave banks more vulnerable to naira depreciation, potentially affecting their capital positions.

The CBN’s move to harmonize different segments of the foreign currency market last June led to significant naira devaluation, with the local currency closing at 899/$ at the official market by the end of last year.

As of February 13, the naira experienced a second devaluation, reaching 1,516/$, marking a 40% devaluation.

While the shift away from a managed exchange rate regime aims to attract capital inflows and mitigate forex shortages, it poses short-term risks such as heightened inflation and potential strains on loan quality and capital adequacy within the banking sector, as highlighted by Fitch Ratings.

As discussions continue, stakeholders closely monitor the implications of the proposed Foreign Currency Gateway Bank on Nigeria’s financial landscape.

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Banking Sector

CBN Mandates Automated Transaction Monitoring to Combat Fraud in Nigeria

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Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN) has introduced new regulations mandating banks to implement automated transaction monitoring systems to combat the growing threat of fraud in the country’s financial sector.

Under the CBN’s latest ‘Consumer Protection Regulations’ draft, banks are required to adopt advanced measures to protect customers’ assets and prevent fraudulent activities.

These measures include multi-variant customer identification, multifactor authentication mechanisms for transactions, automated transaction monitoring, alert functions, and behavioral monitoring.

The move comes amid a significant rise in fraud cases across Nigeria, with the first half of 2023 witnessing 24,232 reported fraud cases totaling N12.33 billion.

The banking industry has seen 110 executives and junior staff members dismissed due to fraud-related offenses amounting to N82 billion over the past two years.

According to the CBN, sensitizing customers on fraud threats or scams and providing secure and simple user interfaces for digital financial services are crucial steps to minimize the risk of fraudulent activities.

The regulations emphasize the importance of continuous efforts to enhance cybersecurity and protect consumers in an increasingly digital financial landscape.

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