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Five Banks Fined N1.4bn For Forex Infractions

Five banks fined N1.4bn for forex infractions, others

Five top banks in Nigeria paid a total of N1.4bn as penalties to financial regulatory bodies such as the Central Bank of Nigeria, Security Exchange Council and Financial Reporting Council of Nigeria, in the first half of the year.

The banks are the United Bank of Africa, Fidelity Bank, Access Bank, Guarantee Trust Bank and First City Monument Bank.

This figure was arrived at from analysis of the H1 2021 financial statements of the banks obtained from their websites.

Findings show that the penalties were as a result of contraventions and infractions of guidelines instituted by the Federal Government through the Banks and Other Financial Institutions Act, relevant CBN circulars and other regulatory requirements.

The BOFIA Act is a regulatory framework that was introduced to guide the financial industry. The Act which was first enacted in 1997 empowers the CBN to implement its provisions.

The president, Major General Muhammadu Buhari (retd.), had in November 2020, signed the amended BOFIA Act 2020 which repealed the erstwhile BOFIA 2004.

In the period under review, GTB paid a total sum of N692m as penalties to regulators for two major infractions bordering on foreign exchange transactions carried out by Betting and Gaming Companies (N690m) and non-refund of interest on debit of non-interest related charges to non-funded accounts (N2m).

For forex trade infractions and other forex infractions, risk based supervision between 2018 and 2019 and late returns, Fidelity bank paid the sum of N64.1m to the CBN during the period under review.

SEC also sanctioned the bank within the review period to the tune of N1.1m for late filling of its December 31 2020 Audited Financial Statement.

The total sum paid for infractions by Fidelity bank is H1 2021 was N349.3m lower than the aggregate sum of N414.5m paid as penalties in H1 2020.

According to the financial reports, Access Bank was fined N184.5m by the CBN while SEC fined the bank N1m during the review period.

The violations committed by the bank include, “contravening the Central Bank’s Foreign Exchange Regulations from January 1, 2013 to July 31, 2020, contravention of rule for receiving bank, a shareholder’s complaint on dividend, CBN’s Consumer Protection report for the period of Jul 2020- Dec 2020, failure to comply with the CBN’s money laundering/combating the financing of terrorism regulations and Know Your Customer policies in respect of a customer’s account and failure to comply with Guidelines on Diaspora remittances.”

UBA incurred regulatory sanctions of N278m in H1 2021, N287m lower than the sum of N565m incurred in H1 2020.

Meanwhile, FCMB Group’s penalties rose from N150.2m paid to regulatory bodies in H1 2020 to N162.3m in H1 2021.

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Business

DMO Issues Two FGN Savings Bonds At N1,000/unit

The Debt Management Office (DMO) has announced its Dec. issuance of two Federal Government of Nigeria (FGN) Savings Bonds at N1,000 per unit.

According to a statement by the DMO, the first offer is a two-year FGN Savings Bond due on Dec. 14, 2022, at an interest rate of 12.255 percent per annum.

The second one is a three-year FGN Savings Bond due on Dec. 14, 2025, at a 13.255 percent interest rate per annum.

It said that the opening date for the issuance of the bonds is Dec.5, the closing date is Dec. 9, the settlement date, is Dec. 14 while coupon payment dates are March 14, June 14, Sept. 14, and Dec. 14.

“They are issued at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

“Interest is payable quarterly, while bullet repayment is made on the maturity date, ” it said.

It added that FGN savings bonds qualify as securities in which trustees can invest under the Trustee Investment Act.

“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other Investors.

“They are listed on the Nigerian Stock Exchange and qualify as liquid assets for liquidity ratio calculation for banks,” it said.

The statement said they were backed by the full faith and credit of the Federal Government of Nigeria, and charged upon the general assets of the country.

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Business

DMO Says It has Raised N130bn From Sukuk For Key Road Projects

The Debt Management Office (DMO) says it raised N130 billion from its N100 billion sovereign al ’Ijarah sukuk opened on November 21, 2022.

DMO, in a statement on Monday disclosed that the offer of N100 billion was “upsized to N130 billion due to the over 165 percent subscription level”.

The Sukuk is a strategic initiative that supports infrastructure development, promotes financial inclusion and deepens the domestic securities market.

Since the establishment of the initiative in September 2017, Nigeria has issued four sovereign sukuk: 2017 (N100 billion), 2018 (N100 billion), 2020 (N162.557 billion), and 2021 (N250 billion).

According to the statement, this year’s total sovereign sukuk issuance moved to N742.557 billion.

“The Debt Management Office (DMO) is pleased to inform the public of the successful conclusion of the issuance of N100 billion sovereign al ’ijarah sukuk. The offer for N100 billion opened on November 21, 2022, and was supported by wide public sensitisation to encourage subscription from diverse investors, particularly the retail investors,” the statement reads.

“The initial offer size of N100 billion was upsized to N130 billion due to the over 165 percent subscription level. The Sukuk was issued at a rental rate of 15.64 percent per annum. This brings the total sovereign sukuk issuance to N742.557 billion as at date.”

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CBN Limits Withdrawal To N100,000 Weekly

The Central Bank of Nigeria (CBN) on Tuesday slashed the cash withdrawal by an individual to N100,000 per week by an individual.

The apex bank also fixed N500,000 as the amount a company can withdraw in a week.

By this new policy, account holders can only withdraw a maximum of N100,000 weekly through Automated Teller Machine (ATM), subject to a maximum of N20,000 daily withdrawal.

Under the new policy, which is to take effect from January 9, 2023, the maximum cash withdrawal via Point of Sale (POS) shall also be N20,000 daily.

This was contained in a circular issued by the CBN on Tuesday, signed by director of banking supervision, Haruna Mustafa and addressed to deposit money banks and other financial institutions.

According to the circular, deposit money banks and other financial institutions are also mandated to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively, per week.

It further indicated that all cash withdrawals in excess of the stated limits will attract processing fees of 5 per cent and 10 per cent respectively.

The new policy also states that third party cheques in excess of N50,000 shall not be eligible for over the counter payment, while extant limits of N10,000,000 on clearing cheques subsist.

“Only denomination of N200 and below shall be loaded into the ATMs.

“In compelling circumstances not exceeding once a month, where cash withdrawals above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000 and N10,000,000 for individuals and corporate organisations respectively, and shall be subject to the references processing fees in (1) above, in addition to enhanced due diligence and further information requirements,” the circular stated.

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