•May confiscate unutilised balance

By Elizabeth Adegbesan

The Central Bank of Nigeria, CBN, has directed Bureau De Changes, BDCs, to sell unutilised foreign exchange (FX) balances to the Nigerian Foreign Exchange, NFEM, market within twenty-four (24) hours of the expiry of the utilisation period.

The apex bank disclosed this in its regulatory guidance on purchase of FX by BDCs through authorized dealer banks in NFEM.

According to the apex bank, “BDCs are not permitted to retain in their possession any foreign exchange purchased from the NFEM that remains unutilised. All unutilised balances shall be sold back to the NFEM market within twenty-four (24) hours of the expiry of the utilisation period.

“Failure to comply shall attract regulatory sanctions including but not limited to forfeiture of the unutilised balance and suspension of the BDC’s NFEM access.

‘‘BDCs shall disclose any unutilised balance from the prior week in each new purchase request submission.

“Authorised Dealer Banks shall factor disclosed unutilised balances into their weekly cap calculations.”

CBN said further that this guidance aims at facilitating seamless implementation of the framework and support sustained liquidity in the retail segment of the foreign exchange market.

The apex bank also prohibited third party transactions saying, “Foreign exchange purchased by a BDC shall be credited only to the BDC’s registered settlement account.

“Disbursement to any account other than the BDC’s own registered account shall constitute a regulatory violation and shall be reported immediately to the CBN.”

CBN noted that only BDCs in possession of a valid and subsisting CBN licence shall be entitled to access foreign exchange under this framework.

The apex bank, however, excluded BDCs under regulatory sanction, whose licences are suspended, or whose operating conditions have been restricted by the CBN, from participation until such restrictions are lifted.

The apex bank also mentioned that it shall maintain a centralised portal, the FX BDC Purchase Tracker (FXBT), to which all BDCs shall be registered and submit real-time or same-day data on BDC purchases, enabling systemic compliance and oversight.

It also warned that no Authorised Dealer Bank should impose exclusivity arrangements, referral fees, or any condition that restricts a BDC’s freedom to select its preferred counterparty bank.

The apex bank warned that violations of the provisions of the Circular and the attached Guidance shall attract appropriate regulatory sanctions.

By Rosemary Iwunze

The outgoing President of the Chartered Insurance Institute of Nigeria, CIIN, Mrs. Yetunde Ilori, has said that her flagship initiative, tagged ‘EPIC’, succeeded in bridging the critical knowledge gap between insurance practitioners and consumers.

Ilori stated that EPIC, which stands for Education, Professionalism, Institutional Recognition and Capacity Building, contributed in driving financial literacy and deeper market penetration.

Ilori disclosed this yesterday, during her valedictory victual press conference held in Lagos, where she reviewed her two-year tenure and highlighted the major milestones recorded under her administration.

She pledged her unwavering commitment to the continuous growth and development of the Nigerian insurance industry even as she prepares to step down from the institute’s leadership.

Reflecting on the progress made during her presidency, Ilori stated that the strategic direction of her administration was fully guided by her E.P.I.C framework, which laid the foundation for the highly successful maiden Insurance Industry Week Celebration, an event designed to celebrate outstanding professional excellence, foster innovation, and enhance public confidence in the sector.

A major highlight of her tenure was the strategic repositioning of the College of Insurance and Financial Management (CIFM), as under her watch, the college has evolved into a dependable hub for human resource development and technical capacity building within the financial services sector.

She also emphasized that the achievements recorded during her presidency were made possible through deliberate and collaborative partnerships with other arms of the insurance industry, notably the National Insurance Commission (NAICOM), the Nigerian Insurers Association (NIA), and various broker associations.

She said: “I feel deeply fulfilled as I hand over the mantle. My commitment to the insurance sector does not end with my presidency, I will continue to serve the industry in every capacity possible to ensure its long-term stability and success.”

•Reforms restore investor confidence

•Bigger banks will drive growth – Cardoso

By Babajide Komolafe

Governor of the Central Bank of Nigeria, CBN, Mr. Olayemi Cardoso, yesterday, said Nigeria’s external reserves have risen to about $52 billion, while net external reserves have exceeded $40 billion.

He attributed the improvements to reforms that have restored investor confidence and also expressed confidence that the ongoing banking recapitalisation would position lenders to drive the country’s next phase of economic growth by increasing lending to the private sector.

Speaking during a fireside chat with BusinessDay Chief Executive Officer, Mr. Frank Aigbogun, Cardoso urged Nigerian business leaders to seize emerging investment opportunities, saying: “One of the most significant outcomes of our policies is the foreign exchange market. We have moved from a market characterised by uncertainty and multiple exchange rates to one where those distortions have disappeared. Today, the multiple exchange windows have been collapsed.”

Highlighting the gains from the reforms, he stated: “The numbers speak for themselves. As of yesterday, we were hovering at about $52 billion in reserves. When we started, net reserves were in the region of about $3 billion. Today, our net reserves are in the $40 billion range. It has been a long and difficult journey, but there has been a regime change at the Central Bank, and that is what has produced these outcomes.”

On investor confidence, Cardoso said: “We are seeing enormous interest from outside Nigeria. Investors are watching very closely. There has been a lot of engagement, and in some cases investments are already being made. You will hear more about these developments because of the stability that has been achieved.”

He challenged local investors to respond quickly, saying: “My hope is that our own business leaders and CEOs will recognise this. They should not be afraid or assume things are still the way they used to be. That would be the biggest mistake they could make. It should not be that by the time they wake up to the opportunity, the horse has already bolted.”

Speaking on the banking sector, Cardoso dismissed concerns that banks were concentrating on government securities at the expense of businesses, saying: “Short term, maybe it’s not wrong. But long term, I’m confident that will change.”

He explained: “Our belief at the time was that we needed to build resilience in our banking system. Initially there was resistance, but in time there was clarity, and people could see that it was in their best interest. We are very happy and very proud of the outcome. Our banks more or less dominate the African continent, and with that come the responsibility to maintain adequate capital. The outcome of this exercise has ensured that they are more resilient and better able to withstand shocks.”

Cardoso stressed that stronger capital would be complemented by close supervision, saying: “Our oversight of banks does not stop because they have raised capital. It is going to be continuous because we need a strong and resilient banking sector to take us where we want to go. When these different actions begin to settle, inflation will come down, interest rates will come down, and it will be a different business environment. Banks will then be much better positioned. The environment has changed. I can already see many banks building the capacity needed to serve SMEs and other borrowers in the future.”