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Bank chiefs make a serious demand following CBN deduction of N499 billion 

Top executives of the banks affected by the CBN’s N499 billion deduction have met with the apex to demand a review of the sanctions. 

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CBN, Key lending rate, CBN to boost creative industry with N22 billion , CBN increases LDR to 65%, sets December deadline, External reserves drop by $3.2 billion in Q3’19 , Banks' loans to Oil and Gas, Power, other sectors drop by N411.8 billion 

One day after the Central Bank of Nigeria (CBN) heavily “penalized” some banks in the country for disobeying a directive requiring them to lend to the real sector of the economy, top executives of the affected lenders have met with the apex to demand a review of the sanctions. 

The CBN deducted about N499.1 billion from the customer deposits held by the banks and will keep the funds for these customers at zero percent. The implication is that banks will not be able to trade with these funds, a move that is suggestive of a penalty for not lending in line with CBN’s directive.

According to sources familiar with the development, the bank chiefs were gathered in Abuja, yesterday, at the CBN headquarters where they met with top CBN officials. They demanded an immediate review of the penalty stemming from their claim that the CBN failed to stick with an earlier announced deadline before it can take effect. 

[READ MORE: CBN grants approval for banks to debit accounts of loan defaulters]

The CBN acted faster than usual: In their argument, the aggrieved bank chiefs said that the CBN had earlier given September 30th as the deadline for compliance by all Nigerian lenders. Interestingly, the apex bank did not even wait for September to end before imposing the penalty on September 26th 

As Nairametrics reported, the CBN deducted a total of N499.1 billion, from their accounts with the CBN. The affected banks include: 

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  • Zenith Bank Plc (N135,629,337,625); 
  • Citibank Nigeria Limited (N100,743,055, 321); 
  • United Bank for Africa Plc (UBA) (N99,676,181,916); 
  • First Bank of Nigeria Limited (N74,668,880,480); 
  • Standard Chartered Bank Limited (N30,027,137,984); 
  • Guaranty Trust Bank Plc (N25, 147, 933, 628); 
  • First City Monument Bank (N14, 371,064, 742); 
  • FBNQuest Merchant Bank Limited (N2, 697,456,144); 
  • Jaiz Bank Plc (N7, 525, 165,552); 
  • Keystone Bank Limited (N4, 162, 938, 879); 
  • Rand Merchant Bank Limited (N2, 823,177,399); and 
  • SunTrust Bank (N1,703,205,427). 

Prior to this time: The Central Bank of Nigeria did publicize the directive in early July, much to the dislike of many banks. According to the directive, banks must meet and maintain a minimum loan to deposit ratio of 60% by September 2019 or risk being debited. It was also noted that the ratio would be periodically reviewed on a quarterly basis.  

A dilemma for banks: Recall that the CBN issued the directive in a bid to discourage banks from merely investing in risk-free securities when they should be lending to the real sector and stimulating economic activities in the processIn other words, the directive is aimed at facilitating easier access to funds for businesses. Nigerian banks are mostly sceptical of lending to the real sector, out of fear of loan losses which ultimately impact negatively on their performances.  

[READ ALSO: Why CBN disallowed banks from investing in bonds on Thursday]

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In the meantime, the banks apparently do not have a choice than to increase their lending. Agreed, it can be argued that the CBN ought to have waited until the deadline before imposing the penalty. But then again, how much difference does five days really make! Moreover, why were the banks waiting until September 30th to adhere to the directive when they had the whole of July, August, and September?  


NB: This article has been amended to correct the wrong impression that the banks were fined. The banks were not fined. 

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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ENDSARS

South-West Governors say attacks in Lagos were attempts to weaken the region’s economy

South West governors have they described the coordinated attacks in the state as an attempt to weaken the region’s economy.

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South-West Governors say attacks in Lagos were attempts to weaken the region's economy

Governors of the South-West states have pledged their supports to their Lagos State counterpart, as they described the coordinated attacks in the state as an attempt to weaken the region’s economy.

This was disclosed by the Chief Press Secretary of the state, Gboyega Akosile, during the visits of the Governors and the Federal Executive Council members from SouthWest to the public assets and private properties destroyed in last Wednesday’s arson in the state.

READ: How to access new N75 billion Nigerian Youth Investment Fund

He tweeted, “Shock! This was the expression on the faces of the Federal Executive Council (FEC) members from Southwest and Governors as they toured the public assets and private properties destroyed in Wednesday’s coordinated arson in Lagos State.

“The delegation of Governors and Ministers was personally received by Sanwo-Olu at the State House in Marina, where the Lagos helmsman showed them the pictorial evidence of the violence before visiting some of the torched assets.”

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READ: President Buhari approves N13.3 billion for Community Policing in Nigeria

At a joint press conference held after the tour, Chairman of Southwest Governors’ Forum and Ondo State Governor, Arakunrin Rotimi Akeredolu, SAN, compared the scenes to a war zone, given the extent of the destruction.

According to him, the violence that resulted from the EndSARS protest left much to be desired, stressing that there was an agenda beyond the youth demonstration against police brutality.

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READ: FEC approves $40 oil benchmark for 2021 budget

He said, “We are deeply concerned with the ease with which public buildings, utilities, police stations, and investment of our people have been burnt despite the proximity of security agencies in those areas.

READ: FG suit may lead to delay in Shell’s Bonga project

What this means: From all indications, it is obvious that the South-West Governors believed that the said attack, which were rumoured to have been carried out by suspected hoodlums, were sponsored by some people to deliberately disorganize the region’s economy.

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#EndSARS Protest: 80 BRT buses worth N3.9 billion were destroyed by hoodlums – LASG 

The Lagos State Government disclosed that the 84 BRT vehicles destroyed by the hoodlums cost a total of about N3.9 billion.

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#EndSARS Protest: 80 BRT buses worth N3.9 billion were destroyed by hoodlums - LASG 

The Lagos State Government has revealed that 27 of the burnt Bus Rapid Transit (BRT) vehicles in the Oyingbo and Ojodu Berger areas of the state cost $200,000 each, while 57 of them cost $100,000 each, all totaling about N3.9 billion.

This statement was made by the Lagos State Government on Friday, after evaluating the extent of damage made to the Bus Rapid Transit (BRT) vehicles.

READ: Arik, Dana Airlines to resume flight operations after curfew

What you should know

Few days ago, hoodlums hiding under the cover of #EndSARS protests allegedly attacked and razed the Oyingbo BRT terminal, with several buses burnt. Nairametrics reported that Primero Transport Services Ltd (PRT), the owners of BRT buses said they have lost over N100 million in 6 days due to the #EndSARS protests.

READ: Lagos Bus Service records 10 million passengers in 10 months

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The State’s Commissioner for Information, Mr. Gbenga Omotosho, in an exclusive interview with Punch, disclosed that:

  • 23 big BRT buses were razed down, while 57 medium-size BRT buses were affected by the violence, which brings the total of the BRT vehicles destroyed to 80. 
  • 23 of the 80 BRT buses burnt by the hoodlums were at Ojodu, while the remaining  57 were at the Oyingbo area.  
  • The big buses cost around $200,000 each, while the medium-size ones cost around $100,000 each.

READ: #EndSARS: Lagos orders investigation of Lekki Toll Plaza shooting

What they are saying 

Mr. Omotosho said, “As I speak, the Governor and some of us are going around the state from one facility to the other. We are also visiting private facilities. Some of the places were the Oregun Vehicle Inspection Service office, the BRT park at Oyingbo, and the terminus at Ojodu Berger. 

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“I don’t know how they planned it; the hoodlums left the old buses and went for the new ones. The new ones were worth billions of naira. 

READ: Operators of BRT suspend operations on Ikorodu-TBS route

“However, the cumulative losses incurred by the state are not ready yet. But it will be mind-boggling. It came on a scale beyond belief. We know that the police have apprehended suspects.”

What this means

The vehicles were purchased in dollars; So, the consistent decrease in the value of Naira is expected to edge the cost of these buses up, when denominated in Naira. 

The Lagos State Commissioner for Information, Mr Gbenga Omotosho explained that with the current foreign exchange rate, the 80 destroyed BRT buses are now valued at N3.929 billion.

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BREAKING: Lagos State reviews curfew again, now from 8pm to 6am

Governor Babjide Sanwo-Olu has once again reviewed the curfew in the state to now commence between 8 pm to 6 am.

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4 key points in the new Lagos 2020 Land Use Charge, Lagos offers tech founders N250 million seed fund, cuts stringent access , Governor Sanwo-olu launches 14 ferries to tackle gridlock, says Okada ban irreversible, ride-hailing

The Lagos State Governor, Babajide Sanwo-Olu, has further reviewed the curfew earlier imposed on the state to help contain the large scale violence following the hijacked #EndSARS protests against police brutality and extra-judicial killings. The curfew now starts at 8 pm and ends at 6 am daily.

This is coming 2 days after the Governor had eased the 24-hour curfew to start from 6 pm to 8 am daily.

This disclosure was made by the Lagos State Commissioner for Information and Strategy, Gbenga Omotoso, on Sunday, October 25, 2020.

The Commissioner in his statement said, “The curfew in Lagos State has been reviewed. Restriction time is now 8 pm to 6 am. Lagosians are enjoined to plan their journey times as they go about their lawful businesses. Public schools remain shut till further notice.”

What this means

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This new review gives Lagosians an extra 4 hours to go about their daily activities.

What to expect

The Lagos State government will keep on reviewing and relaxing the curfew, as long as the security situation does not spike again.

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Details later…

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