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CBN SETS AUG 1 FOR ENFORCEMENT OF CREDIT RISK REGULATIONS

The Central Bank of Nigeria (CBN) has mandated the enrolment of other financial institutions (OFIs) on the credit risk management system (CRMS).

CBN gave the directive in a circular published on its website and signed by Chibuzo Efobi, Director, Financial Policy and Regulation Department.

CRMS is the practice of mitigating losses by understanding the adequacy of a bank’s capital and loan loss reserves at any given period.

With this, the CBN and OFIs would be able to track any bank debtor to know if such a debtor owes another institution.

OFIs include development finance institutions (DFIs), microfinance banks, (MFBs), primary mortgage banks (PMBs), and finance companies (FCs).

“All OFls are hereby informed that the provisions of the regulatory guidelines for the redesigned credit risk management system for commercial, merchant, and non-interest banks in Nigeria issued on February 27, 2017 (Ref No. FPR/DIR/GEN/CRM/06/012) and the additional regulatory guidelines for the operation of the redesigned CRMS issued on September 10, 2018 (Ref No. FPR/DIR/GEN/CIR/07/007) have become applicable to all OFls,” the circular reads.

“Accordingly, and more specifically, enforcement of Section 3.1(a) of the guidelines on CRMS that captures the ‘submit before disbursement’ requirement shall commence on August 1, 2022.”

Section 3.1(a) of the regulatory guidelines for the operation of CRMS states that “rendition on the CRMS is required before the disbursement of any loan or credit facility.

“This process of submission does not interfere with any participating bank’s decision to extend a loan or credit to its customer. Consequently, rendition is only required after approval to disburse is given.”

The apex bank also reminded OFIs to ensure that all their customer accounts comply with the 10-digit Nigeria uniform bank account number (NUBAN) format, and are tagged with bank verification number (BVN) or tax identification number (TIN) for individual and non-individual accounts of the account holder and profiled on the Nigeria Inter-Bank Settlement System’s (NIBSS) industry customer accounts database (CAD) not later than June 20, 2022.

“These remain prerequisites for enrolment onto the CRMS,” CBN said.

CBN further warned that failure to comply with the stipulated timelines would attract appropriate sanctions.

Experts charge insurance professionals on industry’s development

Insurance professionals who gathered at this year’s 2022 edition of Fellows’ Hangout in Lagos organised by the Chartered Insurance Institute of Nigeria (CIIN) have been urged to structure their area of specialisation to promote industry awareness.

The Chairman, Examination Committee, CIIN, Olusola Ladipo-Ajayi, who spoke on a paper titled: ‘Contributions of Fellows to the growth of the Institute’ at the CIIN 2022 Fellows’ night, said there is a need for collaboration between the institute’s relevant stakeholders to promote insurance awareness and place the industry on the path of growth.

Ladipo-Ajayi tasked insurance fellows to hold meetings regularly and make recommendations that would assist the institute saddled with the responsibility of promoting insurance awareness.

He implored them to join hands with the institute to audit course books; help to supervise examinations and assist in determining skills and knowledge programmes.

Chairman, of the Society of Fellows, Prof. Joseph Irukwu, who was represented by the past President, Sunny Adeda, decried the number of fellows of the institution, which is 121, compared to India with 3,767 insurance fellows.

Adeda beseeched insurance practitioners and the public to embrace the institute’s examinations, stressing that the insurance industry currently has less than 4,000 professionals.

The President, CIIN, Dr. Muftau Oyegunle, charged the institute to determine a high standard of knowledge and skills for persons seeking to become registered members of the professional body, adding that he has strong confidence that this would help grow the industry.

 

 

Why is it Essential to Have a Good Credit Score?

What is a Good Credit Score? 

A credit score is a three-digit number known as a CIBIL score that is given to you as a representation of your creditworthiness. Credit bureaus associate this score with your profile based on your financial wellbeing. If you have a history of making all your credit payments on time, clearing your card debt balance, and taking justified loans, then your statement will reflect a good credit score. Any credit score which has credit utilization below 30% is considered a good score.

Benefits of Your Good Credit Score:

  1. You’ll get the best rates on car loans, home loans, and other personal loans: Lenders who wish to offer a loan to clients first check their credit scores to determine their creditworthiness. If you have a good score, you will be able to close a good deal with lower interest rates and premiums from the vendor.
  2. Secure higher credit limits on credit cards: If you have a good credit score, you will be approached by more and more premium lending institutions with higher spending limits. A good credit score automatically reflects well on your creditworthiness and you can take advantage of that in the form of higher credit limits on your cards.
  3. Access to the best-rewarding credit cards: Several credit cards offer various benefits to privileged customers in the form of discounts on different online shopping platforms, cash back, complimentary movie tickets, discounts at luxury dining restaurants and hotels, travel miles, and much more. A good credit score will help you unlock such cards at lower rates.
  4. Eligible for a pre-approved loan offer: High creditworthiness will up your chances of being offered pre-approved loans from banks and financial institutions. A good CIBIL score goes a long way in ensuring that you get reasonable interest rates on these pre-approved loans too.

What Factors Impact Your Credit Score? 

  1. Timely bill payments: Pay your bills on time to ensure that your CIBIL score is not impacted negatively.
  2. Pay off your debts:Debt accumulation can result in a weak credit score. You can also consider debt consolidation by using a personal line of credit, which offers seamless debt management and lower credit rates.
  3. Manage how often you apply for credit: Applying for credit too often results in ‘hard inquiries’ on your credit score, which further weakens your score. So be judicious in choosing when to apply for credit, and span out your applications.
  4. Manage your credit card usage: Using the credit card within limits and ensuring timely payment of the bills will positively impact your credit score.
  5. Check your CIBIL score and report regularly: It’s good to keep a tab on your credit report and periodically check your credit score to help identify any inaccurate or incorrect information and rectify it.

Securing a good credit score requires perseverance, diligence, and prudency. Be realistic with your financial spending capacity before using various means of credit; be sure that make your bill payments on time. With a high credit score, there are several more benefits that you shall reap. You may be able to secure an interest-free loan, better credit rates; you will even be able to save on rentals and mortgages. You will be able to negotiate the best deals and interest rates. So make sure that you consistently work towards achieving a good credit score.

 

Source: ProShareNg

FCMB BANK (UK) LIMITED LAUNCHES PERSONAL AND BUSINESS BANKING PROPOSITION TO DEEPEN INCLUSIVENESS

FCMB Bank (UK) Limited, an independently incorporated subsidiary of First City Monument Bank Limited (which is a member of FCMB Group Plc), has introduced its Personal and Business banking proposition in London, United Kingdom and Lagos, Nigeria at an impressive ceremony attended by the top echelon of the business community within and from outside the country.

The development follows the latest variation of permission obtained by the United Kingdom-based Bank to extend its services to include retail (investments) for individuals and business enterprises. This is in addition to the existing wholesale deposit taking activities, foreign exchange, treasury, corporate banking and trade finance offerings to corporate and institutional customers of FCMB Bank (UK) Limited.

The variation of permission was granted by the Prudential Regulation Authority, the financial services regulatory body of the United Kingdom, and it became effective on June 8, 2018.

The Personal and Business banking proposition of FCMB Bank (UK) Limited is anchored on the Bank’s London Leverage and Africa Awareness. This will enable the financial institution deliver its promise of being the Corporate and Private Bank for African-oriented entrepreneurs, investors and professionals across all their banking needs.

The Group Chief Executive of FCMB Group Plc, Mr. Ladi Balogun, explained at the ceremony that the launch of FCMB Bank (UK) Limited’s personal and business banking proposition is as much a statement of substance as it is one of intent. According to him, “our successful UK platform has proven to be of great importance to the Nigeria stockbroking and international trade finance activities of FCMB Group. Leveraging our deep networks in Africa’s biggest economy, the importance of a London presence to many of our Personal and Business banking customers, and technological innovation, we welcome this opportunity to meaningfully serve more of our customers and grow the value of our UK franchise”.

Also speaking, the Chief Executive Officer of FCMB Bank (UK) Limited, Mr. James Benoit, said, “with the extension of its services, the Bank is now able to receive deposits from both customer segments as well as provide them bank loans to enable them meet their financing needs. The deposit products on offer include current, notice savings and fixed deposit accounts at competitive rates; while its lending products include Buy-to-Let Mortgage Loans enabling target customers to acquire a piece of London and purchase property to include in their investment portfolios.’’.

He added that the Bank will be expanding its premises and entering into partnerships with Fintech providers to open up service options to its clients and enhance their overall banking experience.

Dignitaries at the launch commended the Board and Management of FCMB Group Plc for going the extra mile in ensuring the institution has a very strong presence in the United Kingdom through FCMB Bank (UK) Limited, which will go a long way to boost individual and business transactions between Nigeria and the United Kingdom, thereby enhancing customer experience.

Operating in the City of London, FCMB Bank (UK) Limited began its operations as a BIPRU €50k investment firm in September 2009 with CSL Stockbrokers (another subsidiary of FCMB Group Plc), providing the services of “receiving and transmitting” institutional client orders for Nigerian listed securities. Subsequent to the variation of its permission on September 27, 2013, the Bank commenced wholesale deposit taking activities across various segments.

CBN ISSUES NEW GUIDELINES ON E-PAYMENT, FINTECH DEVELOPMENT

The Central Bank of Nigeria (CBN) has issued fresh guidelines aimed at strengthening the payment system and development of other disruptive technologies relating to financial services.

The regulatory frameworks are contained in two separate documents issued by the apex banks. The documents are created to address challenges in regulatory sandbox and quick response (QR) code payment operations in the country.

“In furtherance of its mandates to, ensure the safety and stability of the Nigerian financial system, promote the use and adoption of electronic payments and foster innovation in the payments system, the Central Bank of Nigeria hereby issues the framework for QR code payments in Nigeria,” the CBN said in one of the documents that detailed the operational relationships among issuers, acquirers, merchants, other financial service providers and customers.

In the document, the Bank spelt out risk management issues and the reporting processes while allocating responsibilities to relevant participants in the value chain, warning that it “shall apply appropriate sanctions to any party that fails to comply accordingly”.

It stated: “Issuers and acquirers shall agree to minimum due diligence guidance for merchant onboarding without prejudice to know your customers/anti-money laundering (KYC/AML) requirements of the Bank… Issuers and acquirers shall ensure behavioural monitoring and fraud management systems are implemented to prevent, detect and mitigate fraud and money laundering.

“Issuers shall provide quarterly risk management assessment reports to the Director, Payments System Management Department. The risk management assessment report shall include, among others, fraud reports, vulnerabilities assessment and risk-mitigating measures introduced.”

According to the CBN, participants shall ensure full interoperability of QR code scheme in Nigeria and work towards achieving its seamless operation.

The regulator left the determination of transaction limit to issuers alongside customers. It, however, directed that the threshold should be set based on the outcome of a customer’s risk profile assessment.

Merchants are mandated by the regulatory framework to cooperate with acquiring banks or other participants, as the case may be, to investigate reported fraudulent cases. They are also expected to report all suspicious transactions to acquirers for necessary actions.

“QR code payments in Nigeria shall be based on the EMV® QR Code Specification for Payment Systems. The Bank may also approve the implementation of any other QR Code Standard provided it meets the prescribed security requirements within the framework, demonstrates interoperability with other existing implementation in the industry and/or cost benefits to end-users (merchants and customers),” the apex bank said.

QR code is a type of barcode that could be read by a digital device and which is used for financial transactions. QR code merchant payment is a growing innovation in the payment system. On the other hand, a regulatory sandbox is a formal process where firms conduct live tests of new, innovative products, services, delivery channels or business models in a controlled environment. Regulatory oversight, subject to appropriate conditions and safeguards, is an essential component of the process.

The CBN said: “This framework, therefore, defines the establishment, rules and operations of a regulatory sandbox for the Nigerian payment system to promote effective competition, embrace new technology, encourage financial Inclusion and improve customer experience, with a view to engendering public confidence in the financial system.”

It listed the objectives of the guidelines thus: increasing the potential for innovative business models that advance financial inclusion, reducing time-to-market for innovative products, services, increasing competition, widening consumers’ choice and lower costs and ensuring appropriate consumer protection safeguards in innovative products.

Other objectives are to define the roles and responsibilities of stakeholders and the operations of the sandbox for the Nigerian payments system, to ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system and to provide an avenue for regulatory engagement with financial technology firms in the payment space.

To participate in the regulator sandbox, products are expected to improve accessibility, enhance the efficiency and effectiveness of financial institution risk management and address gaps or open up new opportunities for financial benefits.

“An applicant shall identify the potential risks to financial institutions and financial consumers that may arise from the testing of the product, service or solution in the sandbox and propose appropriate safeguards to address the identified risks,” the CBN stated.

TAJ BANK SEEKS NATIONAL LICENCE

Nigeria’s second non-interest Bank, Taj Bank, has revealed that it broke in its first eight months of operation, a rare feat that takes some bank’s many years to accomplish.

The Bank, which already has five branches, including the National Assembly Abuja, Abuja Corporate Headquarters, Kano, and Lagos, hopes to expand to the North East states of Borno and Gombe before the end of the first quarter (Q1) of this financial year.

Thereafter, it hopes to expand operations across the entire states of the Federation when its national licence would have been granted by the banking sector regulator, the Central Bank of Nigeria (CBN) by the Q1 end.

These were unfolded by TAJ Bank Founder/Chief Operating Officer, Hamid Joda, and Co Founder/Chief Marketing Officer, Sherif Idi, when The Guardian Newspapers, Abuja Bureau, led by its General Manager, Abuja/Northern Region, Auwal Sa’id Mu’azu, paid a courtesy visit to the Bank.

Joda also indicated that within the short span of operation, the Bank had contributed in reducing unemployment with the recruitment of 213 staff with a potential for many folds increase once the CBN awards it a national license.

He said; “Within this short span, we have also won three key operational awards, namely: Bank of the Year: Best Non-Interest Banking in Nigeria; and Best Islamic Bank in the World.”

He noted that non-interest banking holds several benefits, which most Nigerians are unaware of, and sought the partnership of stakeholders in educating the public on such benefits.

The Guardian’s General Manager, Mu’azu, had earlier explained that the visit was to identify and consolidate corporate relation with TAJ Bank and increase awareness in the area of non-interest banking in Nigeria, and to also congratulate it for its expansion drive within its short existence.
He assured that The Guardian Newspapers was ready to partner with TAJ Bank on its vision by educating the masses about its unique selling points.

Source: The Guardian

SUSTAINED BARGAIN-HUNTING BOOSTS CAPITALISATION BY N325B

For four consecutive sessions, sustained bargain hunting in the shares of blue-chip stocks pushed the Nigerian Stock Exchange (NSE) market capitalisation up by N325 billion.

At the close of trading yesterday, the All-Share Index (ASI) gained 622.09 absolute points, representing an increase of 1.54 per cent to close at 40,963.14 points.

Similarly, the overall market capitalisation value appreciated by N325 billion to close at N21.419 trillion. The uptrend was driven by price appreciation in medium and large capitalised stocks such as Seplat Petroleum Development Company (SEPLAT), Dangote Cement, MTN Nigeria Communications, Ardova Plc and NASCON Allied Industries

For four consecutive sessions, sustained bargain hunting in the shares of blue-chip stocks pushed the Nigerian Stock Exchange (NSE) market capitalisation up by N325 billion.

At the close of trading yesterday, the All-Share Index (ASI) gained 622.09 absolute points, representing an increase of 1.54 per cent to close at 40,963.14 points.

Similarly, the overall market capitalisation value appreciated by N325 billion to close at N21.419 trillion. The uptrend was driven by price appreciation in medium and large capitalised stocks such as Seplat Petroleum Development Company (SEPLAT), Dangote Cement, MTN Nigeria Communications, Ardova Plc and NASCON Allied Industries.

Analysts at Vetiva Dealing & Brokerage said: “Following four consecutive sessions of closing in the green, we expect the market to close the week on a bullish note, as the domestic bourse continues to move higher amidst dominance of the bulls. However, with the index now trading in the overbought region, the possibility of profit-taking cannot be overruled.”

Market sentiment, as measured by market breadth, was positive as 49 stocks gained, relative to seven losers. Champion Breweries recorded the highest price gain of 9.82 per cent to close at N1.23 kobo.

NASCON Allied Industries followed with a gain 9.72 per cent to close at N17.50, while Japaul Gold and Ventures rose by 9.45 per cent to close at N1.39 kobo.

AXA Mansard Insurance went up by 9.42 per cent to close at N1.51, while Ardova appreciated by 9.25 per cent to close at N21.85 kobo. On the other hand, Courteville Business Solutions led the losers’ chart by 8.33 per cent, to close at 22 kobo.

 

Neimeth International Pharmaceuticals followed with a decline of 6.36 per cent, to close at N2.06, while Union Diagnostic and Clinical Services shed 3.13 per cent to close at 31 kobo.

The total volume traded rose by 72.9 per cent to 809.362 million shares, worth N8.906 billion, and traded in 6,706 deals. Transactions in the shares of Transnational Corporation of Nigeria topped the activity chart with 136.578 million shares valued at N130.187 million.

Mutual Benefits Assurance followed with 70.591 million shares worth N27.389 million, while Guaranty Trust Bank traded 68.993 million shares valued at N2.252 billion.

Lafarge Africa traded 61.852 million shares valued at N1.424 billion, while FBN Holdings transacted 44.534 million shares worth N329.473 million.

Source: The Guardian

COVID-19: Africa To Enter Recession With -5% Growth, World Bank Predicts

The COVID-19 pandemic will drive Sub-Saharan Africa into recession with -5% growth, this year, the World Bank has predicted. It would be the first regional recession in 25 Years, the bank said.

The fall would be a sharp contrast from the 2.4% regional growth in 2019 as the new forecast has put it at between -2.1 % to -5.1% in 2020. The forecast was contained in the latest Africa’s Pulse, the World Bank’s twice-yearly economic update for the region. Hafez Ghanem, World Bank Vice President for Africa, was quoted as saying, “The COVID-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard.

“We are rallying all possible resources to help countries meet people’s immediate health and survival needs while also safeguarding livelihoods and jobs in the longer term – including calling for a standstill on official bilateral debt service payments which would free up funds for strengthening health systems to deal with COVID 19 and save lives, social safety nets to save livelihoods and help workers who lose jobs, support to small and medium enterprises, and food security.” The Pulse recommend that African policymakers focus on saving lives and protecting livelihoods by focusing on strengthening health systems and taking quick actions to minimize disruptions in food supply chains. It also recommends implementing social protection programs, including cash transfers, food distribution and fee waivers, to support citizens, especially those working in the informal sector. The analysis shows that COVID-19 will cost the region between $37 billion and $79 billion in output losses for 2020 due to a combination of effects.

 

Source: Vanguard

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