E-Payment: How Nigeria Lost It’s Card System – Okonyia

A payment systems solution provider, Mr Robert Okonyia on Thursday explained how Nigeria lost its card payment system to foreign based institutions, adding that the Central Bank of Nigeria is culpable in the matter.

Speaking on Channels Television’s breakfast programme, Sunrise Daily, Mr Okonyia stated that Nigeria lost its card system during the migration from magnetic stripe card system into EMV, . “We mortgaged the card technology into visa and master card. These are foreign card scheme providers” he said.

In trying to join the EMV card system which is controlled by foreign based institutions, “we lost our own card technology” Every commercial bank will have to become either an associate, affiliate, principal member”.

He added the CBN could have found means to check the spate of fraud which marred the era of the magnetic stripe cards “but the CBN didn’t look at it”.

He continued saying, “CBN never bothered to check – how do we create our own national card to migrate into the EMV”.

The establishment of a national card would enable citizens to transact and make exchanges outside the country as it can integrate with other networks the same way Visa and Master cards collaborated to form EMV.

He also raised the issue of the Naira not being a convertible currency as a result of restrictions by the government which is why Naira cannot be exchanged in other countries.

If you allow the outflow of Naira, it affects the foreign reserve hence the restriction. This is in a bid to improve the economy, he said.

EMV is a global standard for credit and debit payment cards based on chip card technology

Suspicious Package Causes Bomb Scare In kaduna

An item suspected to be bomb found in Kaduna town on Wednesday afternoon caused panic and pandemonium in the city.

Security men said they found a box dropped along the busy Ali Akilu road in the state capital, following reports, by passers-by of a suspicious package suspected to be a bomb.

Security operatives and anti-bomb police personnel who were hurriedly drafted to the scene cordoned off the location, the busy road that connects motorists from the popular Sheik Abubakar Gumi market to Kawo.

The scene is directly opposite the headquarters of Defence Industries Company of Nigeria (DICON), Federal Road Safety Corps (FRSC), banks, public offices and several  business premises.

The package, according to security agencies and the Director General media to the Kaduna state governor, Ahmed Miyaki was a box containing some personal items said to have fallen down from a commercial bus.

Mr. Miyaki however assured residents of their safety and advised them to go about their normal businesses.

CBN’s Move To Increase Cash Reserve Deposits Will Cause Instability

An Economic analyst Johnson Chukwu has said that the move to increase cash reserve deposits to 12% will cause a lot of instability in the banking sector. “Interest rate, deposit rate, fixed income and levy rates of these banks will be affected”, he added.

He said that the change will have a macro-economic impact on the economy of the nation and if the impact of capital market is delayed there will be reduction in bank earnings.

Mr. Chukwu said the central bank is trying to push in money to restore liquidity to the system to help boost it, meaning that the banks are forgoing incoming assets. Adding that Central Bank of Nigeria (CBN) has also moved ahead to try to moderate the impact of the liquidity.

“Banks are selling down their bonds to resell liquidity; these banks may be lurking losses on bonds. CBN governor has made exchange rate top priority trying to stabilize with the dollar. Deposit rates are being increased so that commercial deposits will have lower costs, some have as high as 8% interest rate,” he said.

Banks To Stop N100 ATM Charges Next Monday

The Bankers’ Committee on Sunday said the decision earlier reached to suspend all charges accruing from the use of Automated Teller Machines (ATMs) of other banks would be implemented from Monday, December 17.

The Governor of the Central Bank of Nigeria (CBN) and Chairman of the Bankers’ Committee, Sanusi Lamido Sanusi disclosed this while addressing journalists at the end of the fourth annual Bankers’ Committee retreat held in Calabar, Cross River State.

The CBN governor said the delay in implementing the policy was to allow banks configure their information technology infrastructure for the effective implementation of the policy.

“We have agreed on a final date of Monday, 17 December, 2012 for the kick-off when every bank will remove the charges. We allowed some time for banks that have not configured their IT to do so and stop charging and hopefully by 17th of December, you are not going to have any customer pay additional charges,” he said.

Mr Sanusi further said that the CBN was working on a programme that would ensure that from June 1, next year, the Asset Management Corporation of Nigeria (AMCON) commences the process of divesting from the three nationalised banks – Keystone Bank Limited, Enterprise Bank Limited and Mainstreet Bank Limited – which are wholly owned by the corporation.

“We want to start the process by June 1 next year of getting AMCON to divest from the three banks so that by 2014, the process would have been completed,” he said.

Commenting on the privatisation of power assets, the CBN governor said the committee would advise the Federal Government to ensure that the proceeds to be derived from the sale of power assets are invested in infrastructural projects, adding that this would enhance investor confidence in the system.

He said: “With a vision for a better future for Nigerians, the Bankers’ Committee is committed to play a lead role as catalyst for economic development, improving access to finance for the unbanked and under-banked population and growth of the real sector.

“The Bankers’ Committee has focused on the power, agriculture and Transport Infrastructure sectors for driving growth and identified opportunities for financial system intervention in the transformation of these critical sectors of the economy.

“Through collaboration with the government, the banking community and real sector stakeholders, the Bankers’ Committee programmes and initiatives have contributed to a tangible improvement in the enabling environment and private sector funding for the power and agriculture sectors.”

Mr Sanusi added that banking sector lending to the agriculture sector had increased significantly from 1.5 per cent of total industry portfolio to 3.5 per cent in 2012.

He also said that the banking industry has set a target of 7 per cent for agriculture sector lending by 2013 and 10 per cent by 2017.

Most banks lack competence in the aviation sector – Expert

Speaking on the finicial crises rocking the Nigerian aviation industry, an aviation expert, Mr Chris Aligbe, has declared that commercial banks in  the country, see the aviation sector as every other business and therefore treat it as such due to their lack of competence in aviation.

This according to Mr Aligbe, who was a guest on Sunrise Daily, has led to the inability of the fiancial institutions to analyse proposals from the aviation sector, as he further allege that the banks also fail to engage aviation consultants to analyse or interpret the proposal as the case may be. This he argues has led to the faltering of the very essential sector of the Nigerian economy.

The aviation expert also noted that the Central Bank of Nigeria (CBN) has no responsibility for the aviation sector in any way as the apex bank has the sole responsibility of regulating the financial system of the country, this he argues is not in any way related to the aviation sector.

On the intervention fund provided for the sector by the CBN, Mr. Chris explained that the move by the CBN is of good intentions as it remains within the ambits of its primary duty but he recalled that most business relationship between the banks and the aviation sector doesn’t end well.

Watch the rest of the interview for more.

Lagos to go tough on mast installations

Some masts and base stations of  commercial banks, telecoms and other users in Lagos have become high risk structures which needs to be overhauled.

That’s what the Urban Furniture Regulatory Unit (UFRU) of the Lagos state Ministry of Physical Planning and Urban Development discovered after conducting integrity tests on some banks within Ikeja.

Led by the head of the unit, Mr Joe Igbokwe, the men of the furniture regulatory body accompanied by journalists visited four different branches of one of the nation’s leading commercial banks on Thursday to inspect the installations.

Mr Igbokwe lamented that the life-span of the masts were being abused and they were constructed on very poor foundations.

This is happening about two months after UFRU asked telecoms operators, banks and other builders of masts and base stations to furnish its office with information on the number of its structures for record purposes.

A look at the banking sector

Today on Business Morning out amiable presenter Esther Ugbodaga and her guest looked into the banking sector in Nigeria.

Enjoy as you watch.

Standard Chartered Bank To Encourage Islamic Banking In Nigeria and Oman

Standard Chartered is in discussions with regulators to offer Islamic banking services in Oman and Nigeria, now that both countries are revamping their regulatory environments to encourage Islamic finance, the bank’s global head of Islamic banking on Sunday. According to Reuters

Wasim Saifi said the company, which already has a strong conventional presence in both markets, was waiting for the countries to finalise their regulatory frameworks for Islamic banking but could offer the services in Oman and Nigeria as early as next year.

“We are definitely evaluating the possibility of offering Islamic banking in Oman and Nigeria,” Saifi told reporters. “The opportunity is tremendous. We are in discussions with regulators.”

Oman said in May that it would open the door to Islamic banking and let conventional lenders run sharia-compliant operations in a bid to keep investment funds in the Gulf state. The central bank has given banking licences to two new banks under formation.

Nigeria’s central bank has been pushing to boost Islamic banking in West Africa’s largest economy. The central bank has approved the creation of the country’s first Islamic bank, Jaiz Bank, and Nigeria will seek to launch a debut sovereign sukuk in the next year.

Saifi said that as Islamic banking was growing in sophistication, the gap between conventional and Islamic finance was narrowing and the industry would take more market share from the traditional banking sector.

Standard Chartered Saadiq, the Islamic arm of the bank, expects Islamic banking assets within the United Arab Emirates alone to grow to 20 percent of the total sector in 2012 from an estimated 18 percent this year.

Saifi said the company was looking also to increase its offerings in Islamic wealth management, which lags the conventional industry.

“We are working closely with our external vendors on the Islamic side to make sure our offerings are beefed up there.”