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Financial Services

FRC orders banks not to lend money to states without approval

In line with the provisions of the Fiscal Responsibility Act, the DMOs were directed to not give loans to states without FRC approval.

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CBN releases new capital base, sanctions for Microfinance Banks in new draft guidelines, NIGERIA | Banking: Moody’s changes outlook on Nigerian banking sector to negative

The Fiscal Responsibility Commission (FRC) has urged Deposit Money Banks not to lend money to any state without the approval of the commission. 

According to the commission, the new directive is in line with the provisions of the Fiscal Responsibility Act, 2007 

As part of the recommendations of its recent regional retreat on policy framework for strengthening fiscal transparency, prudence and accountability at the sub-national levels, the commission stated that going forward, state governments should publish their budgets online annually. It further added that states should publish on quarterly basis, their budget implementation performance report online. 

READ: How FG makes N1 trillion from reforms, anti-graft operations

With respect to lending to states by DMBs, a part of the recommendations read in part, “No commercial bank should lend money to states without approval from the FRC, in line with the provisions of the FRA.” 

In addition, the recommendations suggested that states introduce public financial management reforms after the pandemic such as the International Public Sector Accounting Standards, Treasury Single Account, and Government Integrated Financial Management Information System. 

READ: World Bank approves $750 million loan to Nigeria for power sector

Others include the Integrated Payroll and Personnel Information System, Charts of Accounts, Medium-Term Expenditure Framework, Medium Term Sector Strategy, and Operating Surplus Template. 

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The commission therefore, urged states to establish registers for the disclosure of information on beneficial owners of commercial entities to improve transparency and accountability in private sector governance. 

READ: How to cut off impulsive spending as a millennial

The report concluded by urging FRC to sensitizrelevant stakeholders like, the National Economic Council and the Nigeria Governors’ Forum on the need for the domestication of the FRA and the establishment of state commissions. 

Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

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    Financial Services

    CBN freezes 194 bank accounts of Bureaux De Change firm, others

    This was disclosed by the apex bank, as it published the three court orders on its website.

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    parallel market, Covid-19: N3.5 trillion disbursed as stimulus package for the Nigerian economy, CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited, Key highlights of the October 2020 Business Expectations Survey Report, A Total of N3.5 trillion was disbursed in the wake of the COVID-19 pandemic, in addition to several other interventions to reflate the economy - CBN, BOFIA 2020: Steps forward or backwards for Nigerian banks, Total credit to the economy rose to N19.54trillion – CBN Governor

    The Central Bank of Nigeria (CBN) has received orders from the Federal High Court, Abuja, to freeze 194 bank accounts owned by Bureaux de Change firms and other organisation to conduct investigations into suspicious activities.

    This was disclosed by the apex bank, as it published the three court orders on its website.

    The document, which was signed by the Presiding Judge, A.R. Mohammed, empowered the CBN to direct the banks to freeze all the bank accounts for a period of 45 days only, pending the outcome of the investigation.

    READ: CBN freezes 11 bank accounts of companies, individual

    It stated, “The order may be extended upon good reasons shown. Any person aggrieved by this order could apply to the court to have the order set aside, discharged or have the order reviewed for good reasons without waiting for the 45 days to lapse.”

    Some of the firms affected are Seasons Bureau De Change Limited, Sethwealth Ventures Limited, Sani Polo Global Investment Limited, Romvic Ventures Limited and Blue Beam Capital Limited among others.

    READ: Why Nigerian Crypto community is angry with CBN 

    See the court orders:

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    Sethwealth Ventures

    Sani Polo

    Blue Beam

    What you should know

    • The CBN on Wednesday had got an order to freeze 11 bank accounts to enable it to conduct investigations into suspicious activities, according to Nairametrics.
    • The order follows an exparte motion, dated March 12 and filed on March 16, seeking the mandatory order of the court to direct First City Monument Bank (FCMB) Limited to freeze all transactions on the listed accounts and all other bank accounts of the defendants for 180 days pending the outcome of investigation and inquiry currently being conducted by the CBN.

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    Business News

    This decade will be bullish for Nigeria’s tech space – DLM Capital Group

    DLM Capital Group has announced its plans to expand into Nigeria’s million-dollar fintech sector.

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    Leading developmental investment bank, DLM Capital Group has announced its plans to expand into Nigeria’s million-dollar fintech sector, following its acquisition of Links Microfinance Bank.

    The license will give DLM Capital Group the mandate to operate small-scale banking services in Nigeria. This will also allow the launch of its star digital lending brand, Sofri, in the second quarter of this year. The acquisition, combined with the bank’s many fintech efforts already underway, will position it to deliver even more value for corporates and consumers.

    DLM Capital Group’s acquisition of Links MFB represents both an entry into new businesses and complementary enhancements to the institution’s existing subsidiaries.

    READ: Debt Service: Projects that we finance must generate revenue – DMO

    First, this prospect opens new market opportunities for the bank on the African continent.

    Second, the acquisition will enable the institution to exit its ‘legacy bank’ visibility and work more closely with the fintech community to build a ‘challenger bank’ brand that proffers innovative technological solutions for the Nigerian market.

    What they are saying

    The Corporate Communications Manager at DLM Capital Group, Chinwendu Ohakpougwu stated:

    “We are particularly excited about our acquisition of Links MFB and how it enhances the growth trajectory of our business. This highly strategic acquisition represents another significant milestone for us on our journey as a resilient and well-capitalized financial institution with advanced scale and capacity to deliver sustainable and best-in-class financial services within the Nigerian market.

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    We are confident that this decade will be bullish for Nigeria’s tech space and are ready to work with the fintech community in strengthening the solutions necessary to meet consumer needs.”

    READ: Which of these contender groups will produce Nigeria’s biggest bank?

    What you should know

    DLM Capital Group prides itself as a foremost developmental investment bank in Africa and functions as a sole arranger to more than 80% of structured finance transactions in Nigeria, with 100% of all securitization transactions in the market currently.

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