Mobile operators in Nigeria, including MTN Group and Airtel Africa, will disconnect text message services for banks until $259 million in debt is paid. The dispute over pricing and unremitted fees has been ongoing for two years, with the operators hoping that the withdrawal of services will prompt a resolution. Banks argue they do not owe arrears to mobile-phone companies.
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Kenya: Central Bank upgrades payment system
The Central Bank of Kenya has upgraded its Kenya Electronic Payment and Settlement System (KEPSS) by migrating the platform to new ISO 20022 message standards. This is expected to improve the exchange of financial messages by inlaying richer data on transfers and enhancing the accuracy of vetting trading parties. The upgrade is part of the National Payment Strategy 2022-2025 and aims to modernise the National Payments System to world-class standards. KEPSS is a Real Time Gross Settlement System (RTGS) which offers real-time fund transfers and simple payment processes to support large value transfers between banks.
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Kenya: KCB Bank Kenya appoints CEO
Annastacia Kimtai has been appointed as the managing director of KCB Bank Kenya, becoming the first individual to hold the position separately. She has been serving as the acting managing director and the retail banking director since December. The move is aligned with the Central Bank of Kenya’s Prudential Guidelines on Corporate Governance, which requires separation of the management of subsidiaries from that of the holding companies.
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Google now prevents credit apps from accessing user data
Google has updated its Personal Loans policy for apps on Play Store, prohibiting apps offering personal loans from accessing sensitive data, such as photos, contacts, and call logs. The new policy applies to apps offering financial services and aims to comply with emerging regulations meant to take on predatory Digital Credit Providers (DCPs) particularly in Kenya, India, Indonesia, the Philippines, Nigeria, and Pakistan. Nonbanking financial companies in these countries must have only one digital lending app on the Google Play Store, and must comply with specific terms and conditions for financial apps to be allowed on the platform.
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Kenya: Branch Microfinance remains branchless
Branch Microfinance, which acquired Century Microfinance Bank in 2020, will continue to operate as a branchless lender, despite being a micro-bank. The neobank, which closed two of its three branches following the acquisition, will maintain a single branch to serve as its headquarters, as required by law. According to Branch International Managing Director for East Africa Rose Muturi, the neobank has over four and a half million users, who rely on its digital platform and do not need physical branches.
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Kenya: Applications open for central bank governor, deputy
Kenya has opened applications for the positions of central bank governor and deputy governor, with the tenures of the current governor and one deputy ending in June. Interested candidates have until April 19 to apply, and the positions serve four-year terms, which can be renewed once.
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Nigeria: Banks make provisions for impaired Ghana bonds
Zenith Bank, Nigeria’s biggest lender, has set aside NGN 123.4bn ($267m) in part to account for its holdings of bonds in Ghana, following the country’s debt restructuring which resulted in significant impairments. Zenith is the first Nigerian bank to announce provisions, and four of Africa’s biggest lenders have collectively set aside ZAR 4.87bn ($267m) to account for the losses from Ghana’s debt restructuring.
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Nigeria: CBN will keep open banking ‘open’
Nigeria’s central bank has changed its decision to centralise Open Banking with the National Inter-Bank Settlement System (NIBSS) and will now align with an “Open” aggregation model. NIBSS will support the central bank to develop an Open Banking Registry, but the operations of the registry will be the sole responsibility of the regulator. The decision to centralise access to Open Banking APIs with NIBSS was hotly contested by banking and fintech professionals, and the central bank has listened to feedback and hopes to receive further feedback to make Open Banking guidelines operational.
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Zambia: Bank of Zambia clears Atlas Mara takeover by Access Bank
Access Bank, the Nigerian lender, has received regulatory approval to acquire African Banking Corporation Zambia Limited (Atlas Mara Zambia), which is expected to be completed in Q3 2023. Access Bank has been making a series of acquisitions across Africa to boost its bottom line and increase access to more liquidity and assets outside Nigeria, including Cavmont Bank Limited in Zambia and Grobank Limited in South Africa.
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South Africa: Banks sign onto low-fee transaction platform
BankservAfrica has launched PayShap, a new rapid low-fee payment system that allows consumers to send small-sum transactions with just a phone number. The system is expected to bring more people towards a cashless society and has been positively received by commercial banks. Currently, the system is available in Standard Bank, Absa, Nedbank and FNB. However, more banks, including Capitec, Investec, Discovery, TymeBank and Standard Chartered, are expected to integrate the new system in the future.
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African banks at low risk of failure, says Moody’s
Moody’s has stated that African banks are at low risk of deposit withdrawals due to the stability of their deposits, high liquidity, and central bank support. The study found that most rated African banks have solid liquidity that can buffer large deposit withdrawals, and the impact of any unrealized investment losses is modest. The greatest risk facing banks across the region is rising sovereign credit risk, and African banks face many challenges captured in their low credit ratings.
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Nigeria: MTN proposes merging its finance subsidiaries
MTN Nigeria Communications is proposing to merge its two finance subsidiaries, Momo Payment Service Bank and Yello Digital Financial Services, subject to regulatory approval. The merger will combine the subsidiaries and hold the Payment Service Bank license granted by the Central Bank of Nigeria, while offering super-agent services and other permissible activities. The move is in line with the federal government’s drive towards financial inclusion in Nigeria, said MTN Nigeria’s CEO Karl Toriola.
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South Africa: Standard Bank CEO voices cautious optimism about CBDCs
The CEO of Standard Bank, Sim Tshabalala, has expressed cautious support for central bank digital currencies (CBDCs) at the Standard Bank African Central Bank Conference. Tshabalala called CBDCs “potentially useful” for interbank clearing and serving a social purpose in increasing participation in the formal financial system while reducing tax evasion and financial crime. However, he expressed skepticism about privately-generated crypto assets, saying they make it easier to hide or launder money and posed risks to banks. South African Reserve Bank (SARB) has embarked on a study investigating the feasibility of CBDC.
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Ethiopia: Tigray residents still strapped for cash
Banks in Tigray are facing a cash shortage after the central bank dispensed 5 billion birr to the region in February. Traders and the wealthy reportedly withdrew all their money in cash in the first two weeks, leaving residents unable to access cash services due to a lack of funds. Transactions in Tigray are made solely in cash due to mistrust in banks and fears they may shut down again. Brokers are said to be hoarding cash and charging additional fees for people to access it. Residents complain that banking services have returned to pre-dispensed levels.
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Nigeria: CBN extends use of old naira notes
The Central Bank of Nigeria (CBN) has directed commercial banks to accept and dispense old N200, N500, and N1000 banknotes, following a Supreme Court ruling that extended their use until 31 December. The CBN’s directive to withdraw the notes last December led to protests across the country and has been criticised for negatively impacting businesses and households.
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Kenya: Faster clearing services after for bank clients
Kenyan banks will offer faster clearing services for cheques, direct debits, and electronic funds transfers after upgrading the Automated Clearing House (ACH) to the ISO 20022 standard. The upgrade is expected to reduce processing errors and improve turnaround times in electronic funds transfers, and unlock opportunities for banks and other financial sector players. The ISO 20022 is a global standard for electronic messaging between financial institutions.
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Kenya: Ruto appoints deputy governor of central bank
Kenya’s President William Ruto has appointed Susan Koech, a former banker and senior government official, as the second deputy governor of the central bank, a role that has been unoccupied for over five years. The appointment comes ahead of the end of current Governor Patrick Njoroge and Deputy Governor Sheila M’mbijiwe’s terms in June, and legal experts have suggested that Koech could serve as acting governor if replacements have not been found by that point.
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Ethiopia: Cash remains scarce in post-war Tigray region
The five billion birr ($116 million) transferred from the National Bank of Ethiopia to banks in Tigray was reportedly fully paid out within a week. However, a shortage of cash has prevented reopened branches in Tigray from offering full services to customers. While the Commercial Bank of Ethiopia distributed the largest portion of the funds, many of its branches have stopped paying out money due to the cash shortage. Some district managers have expressed concern over an illegal cash flow among the community and that the situation will be a big challenge for banks if it is not addressed.
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Nigeria: Zenith Bank receives approval to form holding company
Zenith Bank has received approval in principle from the Central Bank of Nigeria to become a holding company, with the aim of acquiring other companies and ultimately controlling them. The bank will change its name and operating structure, and will have a banking group with subsidiaries in the financial services industry. Jim Ovia will serve as the new chairman of Zenith HoldCo and continue as Zenith Bank chairman until the new company becomes operational.
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Kenya: Central Bank freezes interest hikes by private banks
The Central Bank of Kenya has put a hold on major banks’ request to increase loan costs for borrowers. Six out of nine tier-1 banks have yet to receive approval for their new loan pricing formulas, which will set interest rates when the government stops controlling loan costs. The freeze has protected most borrowers, particularly those in the informal sector.
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Nigeria: Zenith Bank deputy MD resigns to comply with new CBN rule
Adaora Umeoji, Deputy Managing Director at Zenith Bank Plc, has retired from her position in adherence to new tenure limits for bank executives released by the Central Bank of Nigeria (CBN). Umeoji’s retirement became effective on February 24th, 2023, and is in obedience to the CBN’s new rule that limits the tenure of bank directors. The CBN has stated that the new rule will strengthen corporate governance practices in the banking industry.
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Ghana: Economic crisis hurts banks’ profits
The economic crisis in Ghana has caused a significant decline in the profits of the banking industry. According to the Bank of Ghana’s latest banking sector report, the industry’s net income declined by 15.6% in 2022. The decline in profits has been attributed to various factors, including the increase in non-performing loans (NPLs) due to the pandemic. The NPL ratio increased from 14.1% in December 2021 to 16.1% in December 2022, with the agriculture and manufacturing sectors being the hardest hit. Additionally, the depreciation of the cedi against major currencies has also contributed to the decline in profits. Despite the decline in profits, the banking sector in Ghana has remained resilient.
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Nigeria: CBN revises maximum tenure of banking execs and directors
The Central Bank of Nigeria (CBN) has released revised regulatory requirements for the tenure of executive management and Non-executive Directors (NEDs) of deposit money banks (DMB) and financial holding companies (HoldCos). The new regulation is expected to help address brain drain in the banking sector and check migration of young bankers to Europe and Canada. The CBN official who disclosed this said that the new policy would pave the way for young bankers to aspire to get to executive levels, knowing that those occupying such positions would not stay there forever.
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FATF adds South Africa, Nigeria to grey list
South Africa has been added to the Financial Action Task Force’s (FATF) “grey list” of countries under scrutiny for their standards in preventing money laundering and terrorism financing. This could lead to increased monitoring and enhanced due diligence checks for South African clients at international financial institutions, as well as complications in accessing funding from multilateral development institutions and official lenders. South Africa’s central bank and National Treasury have noted the decision and committed to addressing the concerns raised by the FATF. Nigeria was also added to the grey list on the same day.
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Nigeria: New rules for banking execs and directors
The Central Bank of Nigeria has revised regulatory requirements for executive management and non-executive directors of Deposit Money Banks and Financial Holding Companies, stating a maximum tenure of 10 years for executive directors, deputy managing directors and managing directors, and a maximum period of 13 years for non-executive directors, broken into three terms of four years each. The tenure limit for all positions across the banking industry is 20 years.