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Forex crisis: BDCs ask CBN for autonomy to go digital

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The Association of Bureau De Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to give autonomy to BDCs autonomy to go digital.

This is in line with the CBN’s tech reforms for BDCs for rate convergence and ABCON’s various digitization reforms for Bureau de Change operators from 2016 to date.

This disclosure is contained in a statement issued by ABCON and seen by Nairametrics, where it noted that the exchange rate volatility has continued to give rise to the slow economic growth of Nigeria recently.

ABCON called on the CBN to diversify the scope of operation and business model of the BDC operators from a base to less cash and digital platforms.

ABCON in the statement said,

  • ‘’There is no doubt that exchange rate volatility has continued to underpin the slow economic growth of Nigeria in the past years.
  • As a proactive Organisation and an umbrella body of central bank licensed BDCs and In Line with the recent CBN plan reforms on BDCs to be tech savvy and Abcon’s BDCs’ various digitization reforms since 2016 to date, we urge the CBN to democratise and centralise the BDCs operational mechanism by allowing BDCs the autonomy to go digital.
  • ‘’Given the above we called on the CBN to diversify our scope of operation and business model from cash base to less cash and digital platforms.
  • ‘’ABCON in the launch of its vision for BDCs digitization through their exchange rate platform (nsijabdcs.com)unveiling in 2018 have long prepared their members to embrace technology.
  • ‘’It is also important to note that Abcon has spent several million in IT research and developments, designs, and implementations of various layers of automation of the business transformation process from manual to digital.
  • ‘’Our members have through automation now have transactions monitoring systems with installed IT office equipment and internet in their location.
  • ‘’Our members now record their transactions on AWS I cloud in real-time online and extract their daily reports for return rendition all line real-time interface with the CBN.
  • Our members have also sometimes in 2019 integrated with NIBSS client’s BVN verification and validation platform in carrying out their transactions with their members.’’ 

Collaboration with NFIU 

It added,

  • ‘’The BDCs through the collaborations of Abcon and NFIU registered on the GoAML platforms and Nil-returns platform for the rendition of their suspicious and cash transactions threshold to the NFIU in compliance with their AML/CFT obligations.
  • ‘’We also have to ensure that each of us executes compliance undertaking and appointment of a Compliance officer. ABCON also constantly trains. retrains, sensitizes its members with regulators and security agencies as resource persons.
  • ABCON as a custodian of regulation and self-regulatory organization believed that the BDCs posed the most effective, transparent pass-through effect and transmission mechanism of the apex bank foreign exchange policies. We achieved convergence in 2006, 2009 and 2018 to 2020 before the outbreak of COVID-19 in 2020.
  • ‘’It is in light of the above that we are calling on the apex bank to grant a no objection approval on our various correspondences to the apex bank to grant the sub-sector the autonomy to embrace digital payment to the sub-sector to achieve rate convergence.’’ 

Benefits of the autonomy 

ABCON listed the benefits of granting the autonomy to include, ‘’First it will lead to a true market rate discovery.  

  • ‘’Secondly, it will enhance the achievement of the federal Government’s harmonized foreign exchange rate policies. 
  • ‘’Thirdly, will make the BDC transactions monitoring system effective and conforming with their compliance obligation to statutory and regulatory requirements. 
  • ‘’Fourthly, it will harmonize and centralize the market and thus make the BDCs the moderating and correcting mechanism for the market. In the same vein, it will create additional employment for the over 40,000 employees direct and indirect in the BDC sub-sector. 
  • ‘’Finally, it will usher in Transparency, accountability and ease of supervision.’’ 

Business

CBN raises capital base of commercial banks to N500bn

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The Central Bank of Nigeria (CBN) has announced an upward review of the minimum capital requirements for commercial, merchant and non-interest banks.

In a statement on Thursday, CBN said the increase was necessary due to prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks.

The statement was signed by Haruna Mustafa, director, financial policy and regulation department.

According to the apex bank, the upward review will enhance their resilience, solvency and capacity to continue to support the growth of the Nigerian economy.

CBN increased the capital base for commercial banks with international licences to N500 billion, while national and regional financial institutions’ capital bases were pegged at N200 billion and N50 billion, respectively.

Also, CBN raised the merchant bank minimum capital requirement to N50 billion for national licence holders.

The financial regulator said the capital base for national and regional non-interest banks is N20 billion and n10 billion, respectively.

To meet the minimum capital requirements, CBN advised banks to consider the injection of “fresh equity capital through private placements, rights issue and/or offer for subscription”.

CBN also suggested merger and acquisition (M&A), as well as upgrade or downgrade of licences.

OTHER REQUIREMENTS FOR EXISTING BANKS

  • The minimum capital specified above shall comprise paid-up capital and share premium only. For the avoidance of doubt, the new capital requirement shall not be based on shareholders’ funds.
  • Additional tier 1 (AT1) capital shall not be eligible for the purpose of meeting the new requirement.
  • All banks are required to meet the minimum capital requirement within a period of 24 months commencing from April 1, 2024 and terminating on March 31, 2026.
  • Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their license authorization.
  • In line with extant regulations, banks that breach the CAR requirement shall required to inject fresh capital to regularise their position.

OTHER REQUIREMENTS FOR PROPOSED BANKS

  • The minimum capital requirement shall be paid-up capital.
  • The new minimum capital requirement shall be applicable to all new applications for banking licences submitted after April 1, 2024.
  • The CBN shall continue to process all pending applications for banking licences for which capital deposit had been made and/or approval-in-principle (AIP) had been granted. However, the promoters of such proposed banks shall make up the difference between the capital deposited with the CBN and the new capital requirement not later than March 31

CBN said all banks are required to submit an implementation plan, clearly indicating the chosen option{s) for meeting the new capital requirement and various activities involved with their timelines.

“The plan shall be submitted to the Director, Banking Supervision Department, Central Bank of Nigeria, not later than April 30, 2024,” the apex bank said.

CBN said it will monitor and ensure compliance with the new requirements within the specified timeline above.

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Business

EKEDC board debunks recall of Tinuade Sanda as CEO, says ‘It wasn’t authorised’

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The board of the Eko Electricity Distribution Company (EKEDC) says a communication recalling Tinuade Sanda from her role as managing director (MD) and chief executive officer (CEO) does not represent its position.

In a statement on March 28, Babor Egeregor, a director and chairman, legal and regulatory committee, said the directive terminating the appointment of Sanda has been nullified.

However, in a statement on Thursday, the board said it did not authorise Egeregor to issue any statement on its behalf.

“The attention of the Board of Directors has been drawn to the recent statements online and in print media from Mr. Babor Egeregor, supposedly acting on behalf of the board,” the board said.

“This is to state that the Board of Eko Electricity Distribution Plc (“EKEDP”) did not and has not authorized Mr. Babor Egeregor to issue any statement or press release on its behalf. We therefore urge the general public to regard all communications from him as his personal views and does not represent the position of the Board of “EKEDP.”

The board said only communications signed by the chairman are authentic and represent the position of the company on any issue.

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Detained Binance’s executive, Tigran Gambaryan sues Ribadu, EFCC

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Tigran Gambaryan, Binance’s head of financial crime compliance, has sued Nuhu Ribadu, the national security adviser (NSA) and the Economic Financial Crimes Commission (EFCC), alleging violation of his fundamental rights.

According to reports on February 28, Gambaryan was detained, alongside Nadeem Anjarwalla, Binance’s regional manager for Africa, by the Nigerian authorities after honouring the invitation of the office of the national security adviser (ONSA) and EFCC to discuss issues relating to the company’s operation in Nigeria.

Gambaryan and Anjarwalla’s passports were seized by ONSA.

However, on March 25, Anjarwalla escaped from custody and fled Nigeria with a smuggled passport.

Before escaping custody, on March 12, Anjarwalla was reported to have fallen ill while in detention.

According to NAN on Thursday, Gambaryan, in the originating motion dated and filed March 18 by his lawyer, Olujoke Aliyu, from Aluko and Oyebode Law Firm, sought five reliefs before Justice Inyang Ekwo.

Also, Anjarwalla filed a separate right enforcement suit before Ekwo.

Gambaryan and Anjarwalla, in the suits marked: FHC/ABJ/CS/356/24 and FHC/ABJ/CS/355/24, had sued the ONSA and EFCC as 1st and 2nd respondents.

The duo sought the same relief.

Gambaryan, a US citizen, in his application, sought a declaration that his detention and seizure of his international travel passport contravened Section 35 (1) and (4) of the 1999 Constitution (As Amended).

He said the act amounted to a violation of his fundamental right to personal liberty as guaranteed by the constitution.

The Binance executive also sought an order directing the respondents to release him from their custody and return his international travel passport with immediate effect.

Gambaryan equally sought an order of perpetual injunction restraining the respondents and agents from further detaining him in relation to any investigation into or demands from Binance.

Also, he sought an order for the respondents to issue a public apology to him, and also prayed for the cost of the action on a full indemnity basis.

In a statement in support of the suit, Gambaryan said he is an American citizen who visited Nigeria on February 26, along with his colleague to honour the invitation of the ONSA and EFCC to discuss issues relating to Binance in Nigeria.

Giving an 11-ground argument as to why his application should be granted, Gambaryan said he and his colleague, Anjarwalla, dutifully attended the meeting.

Gambaryan said after the meeting, they were detained by the respondents and had remained in detention since then, adding that he did not commit any offence during the meeting, nor was he informed in writing of any offence he committed in Nigeria at any other time.

“The only reason for his detention is because the government is requesting information from Binance and making demands on the company,” he said,

Gambaryan also said he was not a member of the board of directors of Binance.

ANJARWALLA’S SUIT WITHDRAWN

When the two suits were called on Thursday, Tonye Krukrubo, appeared for Anjarwalla and Gambaryan.

Krukrubo told the court that though the respondents were served two days ago, they were not represented in court.

The lawyer, however, drew the attention of the court to their notice of withdrawal of legal representation for Anjarwalla filed on March 26, without giving details of why they were withdrawing their legal representation.

Also, upon resumed hearing in Gambaryan’s suit, Krukrubo said though the processes had been served on ONSA and EFCC, they were still within time to respond.

He, therefore, sought an adjourned date, saying the respondents’ time to file their applications would expire next week Thursday.

In his judgement, Ekwo said having withdrawn their legal representation, “it means that the applicant has no legal representation and requires that the matter be adjourned for the applicant to seek legal representation and for the respondents to be given an opportunity to come to court”.

The judge adjourned the matter until April 8 for further mention.

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Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

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