E-Financial
CBN to Penalise Banks with MICR Reject by November 1
Central Bank of Nigeria (CBN) has said it will monitor the level of compliance by Deposit Money Banks (DMBs) in accordance with its recently issued circular on the Nigerian cheque standard and added that it will sanction any bank with Magnetic Ink Character Recognition (MICR) reject by November 1. 2023.
Cheque book with a blank cheque
The apex bank also assured that the recently lifted ban on 43 items will ensure that its monetary policy tools will become more effective with the attainment of a unified, well-functioning market for FX, where pricing is based on a willing-buyer and willing-seller system. With this, the CBN’s core functions and mandates become realisable.
The CBN in a circular titled; Circular on the revised Nigeria Cheque Standard (NCS) and Nigeria Cheque Printers Accreditation Scheme (NICPAS): MICR Rejects, noted that its NCS standard tagged version 2.0 was released with the aim of increasing the efficiency and security of the Nigeria Clearing System.
It however stated that MICR rejects have been on the increase wand ordered that in furtherance of the bank’s effort to reduce the number, DMBs must contact their personalisers and reiterate the need to revalidate the MICR code line details for correctness in accordance with the NCS and NICPAS version 2.0.
“Furthermore, both the presenting and receiving banks should also thoroughly examine their in-house cheque processing equipment to ensure that they are properly calibrated and supervised”, the CBN said.
It added that this is to eliminate distortion of image and data being transmitted during cheque truncation process.
It said, “Please note that the bank will monitor compliance with the provision of this circular and any bank with MICR reject starting from 1st November 2023 would be penalised in accordance with the sanctions grid”.
Meanwhile, the bank has expressed belief that its monetary policy tools will become more effective after it lifted the ban on 43 items.
It noted that the willing-buyer and willing-seller system allows the exchange rate to adjust to clear the market and ensure that there is always supply.
According to the bank, the widening premium between the official rate and the parallel market in recent months indicates that the rate has not been setting a clearing price and added that importers of these products rely on the parallel market to source FX for importing these goods.
This, the bank said, puts additional demand pressures on the parallel market, thereby widening the gap with the official rate and permanently segmenting the market.
“Removing these restrictions eliminates the need for importers of these products to go to the parallel market, reducing the pressure on the naira. The hitherto FX restrictions had implications on inflation, causing the prices of affected goods to increase”, the CBN said.
Speaking on how this benefits local production, the bank said, “Local production will benefit from cheaper imported inputs, and consumers will benefit from cheaper retail products. The policy is suitable for a unified FX market and positive as well for inflation. It is expected that employment generation will be boosted as closed factories re-open. Price stability will benefit the economy and the standard of living in general”.
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
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