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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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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Nigeria: Central bank introduces new rules for mobile money operators
As Nigerian bank customers search for alternatives due to recent transaction failures, licensed mobile money operators have gained popularity by providing better experiences and incentives like zero transfer charges and daily rewards. However, concerns about the legality of these platforms have prompted the central bank to release a list of authorized operators, and it has also issued a regulatory framework for agent banking operations to mitigate risks in the financial sector. The framework includes restrictions such as prohibiting agents from conducting transactions in foreign currency and using the purchase option on PoS terminals for cash-in and cash-out transactions.
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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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Nigeria: Central bank adopts open banking regulations
Nigeria has become the first African country to adopt open banking regulations, allowing for the sharing of customer data between banks and third-party service providers to create innovative solutions that benefit consumers. The guidelines provide a framework for handling customer data while ensuring consistency and security, with minimum requirements set for all participants. The regulation will pave the way for a more streamlined and interoperable financial system and expand financial inclusion, but its potential impact will take time to bear fruit.
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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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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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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.
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Nigeria: CBN in talks with US tech firms to boost CBDC uptake
The Central Bank of Nigeria is in talks with new technology partners to develop a new and improved system to manage its central bank digital currency (CBDC), the eNaira. It is believed that the Nigerian financial authority has discussed these plans with the New York-based technology firm R3. The effort to create the eNaira began in 2021 with the help of financial software company Bitt, which still works closely with the CBN and is “currently developing additional features and enhancements”. However, only 0.5% of Nigerians use the CBDC.
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Nigeria: Banks set on fire in protest over naira shortage
Protests have erupted in Nigeria over a shortage of the new naira notes, which have been redesigned to replace dirty cash and promote a cashless society. Customers have set fire to two commercial banks and looted ATMs in Warri and Benin City, while other banks have been broken into. The Central Bank of Nigeria has not released enough of the new notes to satisfy demand. The protests come 10 days before elections in the country, with President Muhammadu Buhari facing calls to take action to avoid losing votes for the ruling All Progressives Congress.
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Nigeria: Mobile banking usage triples year-on-year
The Central Bank of Nigeria (CBN) policy mandating a cashless economy is driving the growth of mobile payment gateways. The recent surge in the use of mobile banking has resulted in failed banking apps and customers being stranded, as Nigeria’s infrastructure is not robust enough to handle the volume of transactions. The Chairman of Voriancorelli and Cofounder of Cellulant, Bolaji Akinboro, said the problem lies with the mobile network backbone, which is not being invested in properly by the state. The CBN intends for a cashless economy to be driven by a mobile-first generation by 2025, but Nigeria’s lack of smartphone access and underdeveloped infrastructure is an issue.Regenerate response
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Nigeria: Central bank extends timeline for old naira notes
Nigeria’s central bank has extended the deadline for citizens to turn in old naira notes. The original deadline was January 31, but has now been pushed back to February 28. The move is part of a larger effort by the bank to phase out older notes and replace them with updated versions.
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Nigeria: Opposition leader calls for extension of deadline for old naira notes
Nigeria’s opposition presidential candidate Atiku Abubakar has urged the Central Bank of Nigeria (CBN) to extend a January 31 deadline to phase out old high-value banknotes, which is feared will disrupt business in the cash-reliant economy. The CBN began releasing newly designed notes last month, however, many Nigerians say they are not yet available in banks. The main opposition party’s candidate in next month’s presidential election, Atiku said it would be impossible for most of Nigeria’s unbanked population to turn in their old notes in time.
Categories: Regulators -
Nigeria: National payment card unveiled
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has launched the Nigerian National Domestic Card Scheme (AfriGo), a Central Bank-led domestic scheme card in collaboration with the Nigeria Inter-bank Settlement System (NIBSS) to strengthen the national payments system and deepen the usage of electronic platforms in Nigeria. He said that the scheme aims to plug in the gap that has remained in the economy since the introduction of the cashless policy, and will integrate the informal segment of the economy, reduce shadow banking and bring more Nigerians into the formal financial services.
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Nigeria: CBN’s regulatory sandbox now live
The Central Bank of Nigeria (CBN) has announced that its regulatory sandbox is live, in a tweet from the bank’s official Twitter page. The sandbox is designed to provide fintech start-ups with a way to test innovative ideas in a secure environment with guidance from the CBN, and is open to companies with an existing CBN license and other technology companies with innovative financial solutions. The aim of the sandbox is to reduce the time-to-market for products, increase competition, and foster engagement between the CBN and fintech startups, but it will not be providing funding for any of the participating companies.
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Nigeria: CBN cracking down on old naira notes
The Central Bank of Nigeria (CBN) plans to increase pressure on commercial banks still dispensing old naira notes through their ATMs as the deadline for phasing out the old notes approaches. The Director of the Legal Services Department of the CBN, Kofo Salam-Alada, said the CBN is issuing new naira notes daily and has a monitoring team checking banks and ATMs. The deadline for the old naira notes of N200, N500 and N1000 to be legal tender is January 31.
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Nigerian banks stock ATMs with new naira bills
Nigerian banks have stopped over-the-counter payment with new naira and have moved the same to the paying machines, known as Automated Teller Machines (ATMs), BusinessDay findings have revealed. This is in response to the directive by the Central Bank of Nigeria (CBN) last week that all banks should with immediate effect load the ATMs with the new naira and stop over-the-counter disbursement.
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CBN lending to commercial banks increases
Nigerian banks have borrowed N11.15 trillion from the Central Bank of Nigeria (CBN) in 2022 via the Standing Lending Facility window, which is a line of short-term credit provided for commercial banks to meet immediate short-term withdrawals from their customers. Borrowing increased significantly month-on-month and reached N1.93tn in June. However, borrowing through the CBN’s Repo declined by 24% to N10.7tn in 2022 compared to N14.07tn in 2021.
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Banks release guidelines as enforcement of CBN withdrawal policy begins
The Central Bank of Nigeria (CBN) has begun enforcement of a policy that limits the amount of cash that can be withdrawn from banks, and Nigerian banks have released guidelines on how to comply with this policy. The policy is meant to curb money laundering and other illicit financial activities, and limits cash withdrawals to N500,000 ($1,346) per day, and N3 million ($8,377) per month.
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CBN reappoints two directors
The Nigerian Senate has confirmed the appointment of Aishah Ahmad and Edward Adamu for second terms as deputy governors of the Central Bank of Nigeria (CBN). Both officials joined the CBN in March 2018 and are set to continue in their roles for the next four years. Prior to joining the CBN, Ahmad was executive director for retail banking at Diamond Bank and has a master’s degree in finance and management from Cranfield School of Management in the UK. Adamu is a civil servant with a career spanning over 35 years.
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BUSINESS
CBN says Nigeria to become cashless by 2025
The Central Bank of Nigeria (CBN) has set a target of achieving a cashless economy by 2025. The bank’s Payments Vision 2025 document aims to create an efficient electronic payment system infrastructure that can facilitate financial services in all sectors of the Nigerian economy, while providing secure, reliable, and user-centric financial solutions that are compliant with international standards. The use of cash is already in decline in Nigeria, as electronic bill payments, mobile phone top-ups, and mobile and instant payments have become more popular.
Categories: Regulators -
Banks borrowing from CBN drops 15% to N11trn in 2022
Banks borrowing from the Central Bank of Nigeria’s (CBN) Standing Lending Facility (SLF) fell 15% to N11tn ($30.3bn) in 2022, down from N13tn the previous year, due to a slowdown in business activity and a decrease in short-term cash requirements. The CBN lent money to banks and merchant banks through the SLF at an interest rate of 100 basis points above the Monetary Policy Rate. Finance experts said the drop was caused by tight liquidity conditions in the banking sector. However, VP of Highcap Securities, David Adnori, attributed it to economic uncertainty following the 2023 general election.