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Banks’ Borrowing From CBN Increases By 52% In December

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Liquidity challenges in the economy made the amount of money that commercial banks borrowed from the Central Bank of Nigeria to increase by 52 per cent in the first three weeks of December, data obtained from the CBN website showed last Monday.
The CBN Standing Lending Facility (SLF) window data revealed that the Deposit Money Banks in the country borrowed N2.305tn from the regulator to cover their cash shortfall positions between December 1 and 22, 2017.
This represents a 52 per cent increase over the N1.515tn the nation’s lenders borrowed from the apex bank to cover their positions between November 1 and 22, 2017.
Commercial banks use the CBN’s SLF to support their liquidity shortfalls and meet trading obligations on short-term basis.
The DMBs borrowed N1.019the, N671bn and N614bn through the CBN’s SLF window during the first, second and third week of December respectively, the Central Bank data showed.
While the N614bn borrowed last week was eight per cent lower than the N671bn loan obtained the penultimate week, the latter was 34 per cent lower than the N1.019tn the banks borrowed from the CBN three weeks ago.
The CBN SLF data showed that banks borrowed N231.92bn, N217.08bn, N228.26bn, N178.28bn, and N164bn, respectively from the Central Bank between December 4 and 8, 2017.
Between December 11 and 15, the amounts borrowed were N178.02bn, N135.3bn, N123.77bn, N116.73bn and N117.64bn, respectively.
Between December 18 and 22, the banks borrowed N119.836bn, N132.651bn, N163.135bn, N110739bn, and N87.892bn, respectively.
During the last week of October and November, the CBN data showed that the banks’ borrowing from the apex bank rose significantly.
Some analysts attributed the trend to liquidity squeeze and banks’ demand for funds to participate in the special foreign exchange auctions conducted by the regulator.
In November, the commercial banks borrowed N2.77tn with an average amount of N154bn.
The highest and lowest amounts the lenders borrowed from the Central Bank last month were N260bn and N108bn, respectively.
Economic and financial experts said that the CBN’s lending to banks had increased in recent times on the back of liquidity issues in the economy.
Banks with liquidity challenges are often seen more on the CBN SLF window than others.
For example, Skye Bank Plc was said to be more frequent on the CBN SLF window months before the CBN sacked its board and appointed a new one.
The apex bank, which is described as a lender of last resort, has been accused of lending more to the Federal Government in recent months.
A member of the CBN Monetary Policy Committee, Dr. Doyin Salami, had recently accused the Central Bank of acting like a “piggy bank” with its funding of the government.
Salami said he was struggling to understand the apex bank’s economic rationale for such action.
Monetary data showed a sharp rise in the CBN’s financing of the government deficit this year, Salami said after the MPC meeting some months ago.
He stated that the CBN’s claims on the government had risen 20-fold to N814bn from the end of 2016, while its purchases of government treasury bills increased by 30 per cent to N454bn.
“It is clear that the CBN has provided piggy-bank services to the Federal government. While I still wonder what the underlying economics is, I sincerely hope it works,” Salami added.
The Federal Government is struggling to raise enough revenue amid economic challenges.

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Implementation Of Cashless Policy Is In Public Interest –Emefiele

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The Governor of Central Bank of Nigeria (CBN) Mr Godwin Emefiele says the implementation of cashless policy in six states of the federation is in public interest to promote efficient payment system.
Emefiele stated this while fielding questions from journalists after the Monetary Policy Committee meeting held in Abuja, last Friday.
The CBN had, last Tuesday issued a circular to deposit banks to commence the implementation of the cashless policy in six pilot states across the country.
The apex bank directed that implementation should commence from Sept 18 in Lagos, Ogun, Kano, Abia, Anambra, and Rivers States, as well as the Federal Capital Territory (FCT).
It, however, stated that the nationwide implementation of the cashless policy would take effect from March 31, 2020. The CBN explained that transactions will attract three per cent processing fees for withdrawal and two per cent processing fees for lodgement of amounts above N500, 000 for individual accounts.
Similarly, corporate accounts will attract five per cent processing fees for withdrawal and three per cent processing fee for lodgement of amounts above N3 million.
The CBN’s directive has, however, received knocks from many Nigerians.
Reacting, Emefiele said the policy was not new as it was inaugurated in the country in 2012 and implementation began in 2014 while several engagements were held across multiple stakeholders before its commencement.
He said withdrawal charges had been in place since then, only deposit charges were new now to some people though it was part of it from beginning but later withdrawn.
“The policy says if you deposit money in the bank above a particular threshold which for individual is N500,000 and N3 million for corporate bodies, then you will be charged, same for withdrawal.
“It has been like this but after stakeholders engagement, we agreed that it was too early to begin to charge people who want to deposit money in banks.
“We agreed at that time that they were a lot of cash outside the bank industry and there is no need to penalise the people who want to bring in their money to the banks and then we relaxed the essence of charging on deposit.
“We expected that after five years, that is from 2015 to 2019, all cash kept in peoples’ houses should have been brought to the banks,” he explained. He announced that full cashless policy would commence all over the country by March, 2020.
He stated that the policy was not designed to defranchise hard working Nigerians as perceived by some categories of people.
According to him, a data conducted, revealed that close to 95 per cent of cash deposited and withdrawn fall bellow this threshold.

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SON Seeks Media Partnership Against Substandard Goods

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The Standard Organisation of Nigeria (SON) has solicited active working synergy with journalists and other stakeholders in the fight against substandard goods in the country.
The SON Coordinator in charge of Sokoto and Zamfara states, Mr Wanza Kussiy made the appeal in Sokoto, last Friday.
Kussiy emphasised the need for increased awareness for Nigerians to patronise quality products and services with required valuable standards.
He said SON had the mandate of safeguarding people’s lives through ensuring maximum quality of all categories of goods and services as well as rid the country of substandard goods.
According to the coordinator, fighting substandard goods and services should be collective responsibility of all Nigerians.
“ There is need for increased partnership between SON, law enforcement agencies, media professionals, governmental agencies, non-governmental organisations and community-based groups.
“ SON fights substandard goods to ensure quality assurance of products and services across the country” Kussiy said.
He said officials were always encouraged to provide conducive platforms on collaborations where all stakeholders could contribute toward achieving the mandate.
Kussiy cautioned people against demanding for cheap items, which he described as a dangerous way of encountering with counterfeit products.
He explained that SON had unified measures of certifying quality of products and services comprising imported ones and those produced within the country, and also issue out compliance certificates.
The coordinator urged people to report or register their complaint on items or services suspected to be of substandard quality for immediate action.
He stressed that the aim was to ensure that people obtained goods and services with maximum required value.

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Xerox To Partner RSG On Information Management

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A leading company in documents equipments and solutions, Xerox H.S Nigeria Limited has said that it would remain focused in providing the modern technology to drive excellence in documentation and information management in public service and the private sector.
General Manager Sales and Marketing of the company, Mr Femi  Abidoye, disclosed this during a product exhibition of the company in Port Harcourt at the weekend.
He said the company was ready to partner with the Rivers State Government  and other stakeholders in documentation and information management, to enhance productivity, “in the face of dynamic, ever changing technological advancement
“It is on record that Xerox has been visibly represented in Port Harcourt (Rivers State) for more than three decades now and their contributions in the state had altered the face of business and official transactions, from documents generation, storage, retrieval and archiving in daily corporate world of business,” he said.
Abidoye said the company has continued to blaze the trail in the changing phase of transaction in business, politics and social devices,adding that the exhibition was to showcase its latest innovations to the company’s customers in Rivers state.
Earlier, the Chairman of the occasion, Engr Benson Okwonu, had described Xerox as one of the top centres of business activities in Rivers State , Nigeria and the world at large, leading in documents equipment and solutions with wide range of modern technologies.
Okwonu who is the Executive Director, Engineering, Niger Delta Basin Development Authority (NDBDA) urged the company to maintain its pace in technological advancement and service delivery.

 

Taneh Beemene

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