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CBN, DMBs Move to Fund Mortgage Industry

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Central Bank of Nigeria (CBN) has sent a draft of the regulatory and supervisory framework for the operations of a Mortgage Refinance Company (MRC) to all banks that will guide the provision of funds for the mortgage industry.

The CBN said the MRC would be a specialised second- tier institution which would provide short term liquidity, long term funding and or guarantees to mortgage originators and housing finance lenders.

Mr. Olufemi Fabamwo, director, Other Financial Institutions Supervision Department (OFID), in  a circular  to Deposit Money Banks (DMBs)  and Primary Mortgage Banks, the apex bank requested for comments, observations and suggestions on the establishment of the MRC.

The CBN said the establishment of the MRC was primarily aimed at increasing the liquidity within the mortgage sub-sector and availability of mortgage credit, reduce mortgage and related costs and make residential housing more affordable.

The circular said the frame work prescribed the basic regulatory requirements for the MRC’s principal line of business of refinancing credits to borrowers on the security of residential mortgage assets and other qualified collaterals.

It also sets the capital adequacy requirements for the MRC, including its minimum paid-up capital, minimum leverage limit and the minimum risk- weighted capital requirement.

The circular reads in part: “The framework specifies the types of collateral that a borrower can pledge for MRC’s advances and the discount that the MRC shall apply in determining how much it can lend against any qualified collateral.

“It also prescribes procedures for the management of MRC’s interest rate risk, its permissible investments and liquidity requirements.

“The procedure and criteria to be used in granting a licence to the MRC shall be the same as specified for banks under the Banks and Other Financial Institutions Act, CAP B3, laws of Nigeria, 2004 and any other regulations issued by the bank.”

The circular also said any promoter seeking a licence for operation of the MRC shall apply in writing to the CBN governor and that the application shall be accompanied with nonrefundable application fee of N100,000 and a detailed feasibility report containing information that shall include the need for the service of MRC, the branch expansion programme, the proposed training programme for staff and management, details of risk controls and mitigation strategies, among others.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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