[{"id":482,"question":"Why has the Central Bank of Nigeria (CBN) reviewed ATM transaction fees?","category":" Review of ATM Transaction Fees","answer":"The CBN has reviewed ATM transaction fees to address rising operational costs and enhance the efficiency of ATM services across the banking industry. This adjustment aims to encourage the deployment of more ATMs while ensuring fair and transparent charges for customers."},{"id":489,"question":"When will the new ATM transaction fees take effect?","category":" Review of ATM Transaction Fees","answer":"The revised ATM transaction fees will take effect from March 1, 2025, as directed by the Central Bank of Nigeria (CBN). All banks and financial institutions are required to comply with the CBN circular dated February 10, 2025, on “Review of Automated Teller Machine Transaction Fees” from this date."},{"id":493,"question":"Will I be charged for withdrawing money from my bank’s own ATM? ","category":" Review of ATM Transaction Fees","answer":"No, withdrawals from your bank’s own ATMs (On-Us transactions) will remain free of charge"},{"id":508,"question":"What if I withdraw from an off-site ATM of my bank, will I be charged because the ATM is off-site? ","category":" Review of ATM Transaction Fees","answer":"No, withdrawals from your bank’s own ATMs (On-Us transactions) will remain free of charge. The location of the ATM does not affect customers of the bank that deployed the ATM. "},{"id":509,"question":"What are the new charges for ATM withdrawals? ","category":" Review of ATM Transaction Fees","answer":"The new charges are as follows: \r\n\r\nOn-Us Transactions (Withdrawals at your bank’s ATM): No charge. \r\n\r\nNot-On-Us Transactions (Withdrawals at another bank’s ATM): \r\n\r\nOn-site ATMs: ₦100 per ₦20,000 withdrawal. \r\n\r\nOff-site ATMs: ₦100 per ₦20,000 withdrawal, plus a surcharge of up to ₦500. The surcharge will be displayed on your ATM screen before transaction approval. \r\n\r\nInternational Withdrawals: Charges will be based on cost recovery, meaning the exact fee applied by the international acquirer will be passed to the customer. \r\n\r\n "},{"id":511,"question":" \r\n\r\nWhat is the difference between on-site and off-site ATMs? ","category":" Review of ATM Transaction Fees","answer":"On-site ATMs are located within or directly affiliated with a bank branch. In other words, the ATMs are on the bank premises. \r\n\r\nOff-site ATMs are outside a bank’s premises, such as shopping malls, fuel stations, or other public areas. "},{"id":513,"question":"It was stated that Not-On-Us Transactions (withdrawals at another bank’s ATM) attract a base fee of ₦100 per ₦20,000. What happens if I withdraw less than ₦20,000 – will the ₦100 fee apply? ","category":" Review of ATM Transaction Fees","answer":"Yes, the fee of ₦100 will apply if you withdraw less than ₦20,000 from another bank (a bank other than the one that issued your payment card). The reason for applying the fee for every ₦20,000 withdrawal is to prevent customers from being compelled to break their withdrawals to less than ₦20,000 per withdrawal. \r\n\r\nIn other words, ATM transactions will incur a base fee of ₦100 per transaction. It is also important to note that a tiered fee structure will apply for transactions exceeding ₦20,000, with an additional ₦100 charged for each subsequent withdrawal of N20,000 or portion thereof.  "},{"id":514,"question":"Will the three free monthly withdrawals for Remote-On-Us customers still apply? ","category":" Review of ATM Transaction Fees","answer":"No. The three free monthly withdrawals allowed for Remote-On-Us customers (those withdrawing from another bank’s ATM) will no longer apply under the new review. "},{"id":515,"question":"It seems the terms “Not-on-us” and “Remote-on-us” are being used interchangeably. Is this the case? ","category":" Review of ATM Transaction Fees","answer":"Yes, these terms are used to describe transactions at an ATM that does not belong to the bank that issued the payment card used.  "},{"id":519,"question":"\r\nHow will I know the surcharge amount for an off-site ATM withdrawal? ","category":" Review of ATM Transaction Fees","answer":" \r\n\r\n\r\nThe surcharge (up to ₦500 per ₦20,000) will be displayed at the point of withdrawal, allowing customers to make an informed decision before proceeding with the transaction. "},{"id":520,"question":"How will this impact consumers who frequently withdraw from other banks’ ATMs? ","category":" Review of ATM Transaction Fees","answer":"From the effective date of the circular, consumers who frequently withdraw from other banks’ ATMs will pay for each withdrawal. Also, they may be surcharged if they withdraw from Off-site ATMs.  "},{"id":521,"question":"Can banks charge more than the stated fees? ","category":" Review of ATM Transaction Fees","answer":"No. The charges and surcharges are capped. Thus, banks and other financial institutions are not allowed to charge more than the fees prescribed in the circular. Note also that though the surcharge per transaction is capped, there is flexibility for a bank to charge a lower amount depending on its cost structure and business development drive. "},{"id":522,"question":"How can I avoid ATM transaction fees?  ","category":" Review of ATM Transaction Fees","answer":"You should withdraw money from your bank’s ATM (On-Us transaction) to avoid the transaction fees. Additionally, limiting your use of Off-site ATMs is advisable to minimise the surcharge. \r\n\r\nFurther, consumers can explore other payment channels such as mobile apps, POS devices for payments, etc.  \r\n"},{"id":523,"question":"\r\nHow much will I be charged for international ATM withdrawals? ","category":" Review of ATM Transaction Fees","answer":"For withdrawals outside Nigeria, banks will apply a cost recovery fee, meaning the exact charge imposed by the international ATM acquirer will be passed on to the customer. "},{"id":538,"question":"How will customers report contraventions of this regulation by banks? ","category":" Review of ATM Transaction Fees","answer":"Consumers denied the right to withdraw up to N20,000 per transaction are encouraged to file a complaint with the CBN using cpd@cbn.gov.ng. \r\n\r\n "},{"id":541,"question":"What is a foreign exchange forward contract?","category":" Settlement of Undelivered Forward Contracts","answer":"A foreign exchange (FX) forward contract is an agreement between two parties to exchange a specified amount of one currency for another at a predetermined exchange rate on a future date."},{"id":543,"question":"What type of foreign exchange contract did counterparties enter into with the CBN?","category":" Settlement of Undelivered Forward Contracts","answer":"Counterparties entered into a bespoke foreign exchange contract, wherein Naira was taken upfront in exchange for future delivery of US Dollars by the Central Bank of Nigeria."},{"id":544,"question":"Under what circumstances can a foreign exchange forward contract be nullified/cancelled?","category":" Settlement of Undelivered Forward Contracts","answer":"A foreign exchange forward contract may be nullified or cancelled under the following conditions:\r\na) Fraud or Misrepresentation.\r\nb) Lack of proper documentation.\r\nc) Illegality or breach of law.\r\nd) Regulatory non-compliance or violation of applicable CBN circulars or FX guidelines, which render the contract void or unenforceable.\r\n"},{"id":546,"question":"Why did the CBN subject the undelivered forwards to a forensic audit?","category":" Settlement of Undelivered Forward Contracts","answer":"The CBN undertook a forensic audit to ensure the integrity of the foreign exchange market and to confirm that all outstanding forward contracts were legitimate, valid, and met the agreed contractual and regulatory requirements. This step was necessary to safeguard Nigeria’s FX reserves, promote market discipline, and ensure fairness to all participants. This step reflects the CBN’s statutory responsibility to ensure prudence, legality, and fairness in the management of public financial resources, especially where previous actions may have breached that standard."},{"id":547,"question":"Who audited the outstanding foreign exchange forward contracts?","category":" Settlement of Undelivered Forward Contracts","answer":"In September 2023, CBN engaged Deloitte to conduct a comprehensive forensic audit of all transactions in the Retail Secondary Market Intervention Sales (RSMIS), including undelivered forward contracts."},{"id":548,"question":"What did the forensic audit involve?","category":" Settlement of Undelivered Forward Contracts","answer":"The audit involved:\r\n•\tReviewing contract documentation and trade confirmations.\r\n•\tVerifying underlying trade transactions (e.g., import/export documentation, Form M, shipping and Customs records).\r\n•\tConfirming that contracts complied with applicable CBN circulars and FX market guidelines.\r\n•\tEnsuring that beneficiaries were genuine and eligible counterparties.\r\n"},{"id":549,"question":"What were the findings of the forensic audit?","category":" Settlement of Undelivered Forward Contracts","answer":"The forensic audit uncovered significant irregularities in the execution of some of the foreign exchange forward contracts. Each finding was based on objective and verifiable data, and all affected counterparties were given an opportunity to respond before final decisions invalidating these contracts were made. "},{"id":550,"question":"Why, specifically, were some contracts invalidated?","category":" Settlement of Undelivered Forward Contracts","answer":"Some undelivered forward contracts were found to be invalid for various infractions and reasons, including:\r\na)\tCompany Name on Approved Sales Result Different from Company Name on Form M Portal.\r\nb)\tThe cumulative value of the approved FX Forward Sales on this Forex Form Number from Auction 1 in 2021 to date of this auction exceeds the total value of the Forex Form Number.\r\nc)\tSales Higher Than Demand.\r\nd)\tNon-permissible Item of Import.\r\ne)\tUnauthorized Companies Importing Milk.\r\nf)\tVague Narration of the Item of Import of the Item of Import.\r\ng)\tSales Without Demand.\r\nh)\tIncorrect Forex Form Number.\r\ni)\tForex Form not Indicated.\r\nj)\tBlank Form M.\r\nk)\tRejected Form A Application on Form A Portal with Approved Sales.\r\nl)\tApproved Sales Value Higher than the cost of import item on Form A portal.\r\nm)\tApproved Sales Value Higher than the cost of import item on Form M portal.\r\nNo right to FX settlement can arise under Nigerian law where the underlying transaction is tainted by illegality, misrepresentation, or non-compliance with binding regulatory rules.\r\n"},{"id":552,"question":"What happened to the valid contracts?","category":" Settlement of Undelivered Forward Contracts","answer":"All valid and verified contracts were honoured. CBN has made payments on these contracts in line with agreed settlement terms."},{"id":554,"question":"What happened to the invalid contracts?","category":" Settlement of Undelivered Forward Contracts","answer":"Invalid contracts were cancelled in line with audit findings. No FX payments were made on these contracts, as they did not meet the required standards for settlement, as noted in point 8 above. The naira previously received from counterparties in respect of these invalid contracts has been returned. The CBN is currently engaging with law enforcement authorities to determine appropriate action in cases involving potential fraud, misrepresentation, or abuse of the FX system."},{"id":555,"question":"Why did CBN take this approach instead of paying all contracts?","category":" Settlement of Undelivered Forward Contracts","answer":"Paying invalid contracts would have rewarded non-compliance, encouraged abuse of the FX system, and unnecessarily depleted the nation’s FX reserves. The CBN’s mandate is to maintain market integrity and protect Nigeria’s financial stability. Moreover, settling contracts that were legally void or irregular would have contravened the CBN’s statutory responsibilities and potentially exposed it to legal liability and loss of public trust. "},{"id":556,"question":"Can banks or counterparties appeal the audit outcome?","category":" Settlement of Undelivered Forward Contracts","answer":"No. The audit conclusions were based on a rigorous process carried out by an independent forensic expert (Deloitte), acting pursuant to a transparent mandate. The auditor contacted the authorized dealer banks concerning those contracts to get their explanations of the infractions before reaching conclusions on them. The findings have therefore met procedural fairness standards. The case of undelivered forward contracts is now concluded and closed."},{"id":557,"question":"What does this mean for future forward contracts?","category":" Settlement of Undelivered Forward Contracts","answer":"This process reinforces CBN’s commitment to:\r\n•\tStrengthening due diligence in the FX market.\r\n•\tEnforcing compliance with documentation requirements.\r\n•\tEnhancing transparency and accountability in forward contract settlement.\r\n"},{"id":558,"question":"What is CBN’s message to banks and market participants?","category":" Settlement of Undelivered Forward Contracts","answer":"CBN remains committed to honouring all legitimate obligations while ensuring strict compliance with market rules. Banks and their clients are urged to maintain proper documentation, adhere to FX regulations, and submit only valid transactions for settlement."},{"id":559,"question":"Is any legal action being taken against those parties deemed to have breached rules?","category":" Settlement of Undelivered Forward Contracts","answer":"The Central Bank of Nigeria is reviewing appropriate legal action against parties found to have violated applicable rules and regulations, based on the findings of the forensic audit. The Bank will collaborate with law enforcement and regulatory agencies to pursue civil, administrative, or criminal sanctions, as necessary."},{"id":416,"question":"What is the Banking Sector Recapitalization Programme 2024?","category":"Banking Sector Recapitalization Programme 2024","answer":"The Banking Sector Recapitalization Programme (the Programme) is a regulatory initiative of the Central Bank of Nigeria (CBN) that requires banks to increase their minimum paid-in common equity capital to a specified amount according to their license category and authorization within a specified period of time. "},{"id":419,"question":"Why is the Programme necessary?","category":"Banking Sector Recapitalization Programme 2024","answer":"The Programme became necessary to further strengthen Nigerian banks against external and domestic shocks as well as enhance the stability of the financial system. By increasing the minimum capital requirements, the CBN aims to ensure banks have a robust capital base to absorb unexpected losses and capacity to contribute to the growth and development of the Nigerian economy."},{"id":424,"question":"What is the objective of the Programme?","category":"Banking Sector Recapitalization Programme 2024","answer":"The broad objective of the Programme is to engender the emergence of stronger, healthier and more resilient banks to support the achievement of a US$1 trillion economy by the year 2030. Bigger banks with larger capital base and capacity can underwrite larger levels of credit which is critical to lubricate and catalyze the growth of the economy. "},{"id":426,"question":"Which category of banks are affected by the Programme?","category":"Banking Sector Recapitalization Programme 2024","answer":"The Programme shall apply to commercial, merchant, and non-interest banks. The goal is to ensure that each institution maintains adequate capital that is commensurate with the risk profile, scale and scope of its operations."},{"id":429,"question":"What are the new minimum capital requirements under the Programme?","category":"Banking Sector Recapitalization Programme 2024","answer":"The new minimum paid-up share capital requirements applicable to each authorization category of banks are as follows:\r\n(1) COMMERCIAL BANK: (a) International - N500 Billion \r\n\t         (b) National - N200 Billion\r\n\t         (c) Regional - N50 Billion\r\n(2) MERCHANT BANK: (a) National - N50 Billion\r\n(3) NON-INTEREST: (a) National - N20 Billion\r\n\t          (b) Regional - N10 Billion. \r\n\r\nFor existing banks, the capital requirements specified above shall be paid-in capital (Paid-up plus Share Premium) only. Bonus issues, other reserves and Additional Tier 1 (AT1) Capital shall not be allowed or recognized for the purpose of meeting the new minimum capital requirements. \r\nHowever, relevant reserves will continue to be recognized in the computation and determination of the risk-based capital adequacy ratio (CAR) in line with the CBN’s Guidelines on Regulatory Capital.\r\nAll applications for new banking license shall comply with the new capital requirements.   \r\n"},{"id":430,"question":"What is the timeframe for banks to comply with the new requirements?","category":"Banking Sector Recapitalization Programme 2024","answer":"The CBN has set a timeline of 24 months for banks to comply with the new requirements commencing from 1st of April 2024 and terminating on March 31, 2026."},{"id":431,"question":"Will the Programme affect banks’ delivery of products and services?","category":"Banking Sector Recapitalization Programme 2024","answer":"The Programme will not affect the smooth functioning of banks. Accordingly, consumers of financial services are expected to carry on with their regular banking transactions unhindered during the implementation of the Programme."},{"id":432,"question":"How will the Programme impact the economy? ","category":"Banking Sector Recapitalization Programme 2024","answer":"The Programme will better position banks to play their intermediation role through lending to critical sectors of the Nigerian economy, thus supporting economic growth and development. \r\n\r\nIn addition to supporting economic growth, the Programme will help enhance banks’ capital buffers to ensure their continued stability and sustainability in the face of global and domestic macroeconomic headwinds.  \r\n"},{"id":433,"question":"What factors did the CBN consider in determining the new minimum capital requirements?","category":"Banking Sector Recapitalization Programme 2024","answer":"The CBN assessed various factors in determining the appropriate level of the minimum capital requirements. These include:\r\n\r\na.\tRisk profile of banks;\r\nb.\tGlobal and domestic headwinds and their potential impact on banks’ balance sheets;\r\nc.\tImpact of inflation. \r\nd.\tStress tests of banks’ balance sheets, to gauge their resilience to absorb current and unexpected shocks.\r\n"},{"id":434,"question":"Given that significant funds will be received from various investors in the course of the recapitalization exercise, how will the CBN ensure that illicit funds are not used for the purpose of recapitalization of banks?","category":"Banking Sector Recapitalization Programme 2024","answer":"The CBN has robust anti-money laundering regulations which will be strictly enforced, with the active collaboration of relevant law enforcement agencies. In addition, the CBN will require all banks to ensure that appropriate and effective anti-money laundering screening/checks (Know Your Customer, Customer Due Diligence and Suspicious Transactions Monitoring, etc.) are conducted. "},{"id":435,"question":"Given that new investors may own shares in banks as a result of this Programme, will the CBN ensure that only Fit and Proper persons are approved as significant shareholders of banks?","category":"Banking Sector Recapitalization Programme 2024","answer":"There shall be strict enforcement of Fit and Proper checks for all prospective and significant shareholders as well as directors and senior management staff of banks."},{"id":437,"question":"How are banks expected to raise or meet the required capital?","category":"Banking Sector Recapitalization Programme 2024","answer":"Banks may meet the new requirement through the following options:\r\n\r\na.\tIssuance of new common shares (by way of public offer, rights issues, or private placements);\r\nb.\tMergers and Acquisitions (M&As); or\r\nc.\tupgrade/downgrade of their respective license category or authorization.  \r\n\r\nThe CBN will issue guidelines to prescribe the definition, options and approaches to meeting the new minimum capital requirement.\r\n"},{"id":438,"question":"What is the role of the CBN in managing the recapitalization process?","category":"Banking Sector Recapitalization Programme 2024","answer":"The CBN will actively monitor and supervise the recapitalization process to ensure compliance with set guidelines. This will involve the conduct of on- and off-site reviews, verification of capital, periodic interventions when necessary and broader stakeholder engagements."},{"id":439,"question":"How will the CBN ensure the protection of depositors during the Program?","category":"Banking Sector Recapitalization Programme 2024","answer":"The CBN, in collaboration with the Nigeria Deposit Insurance Corporation (NDIC), will ensure that depositors' interests are protected during the Programme. \r\n\r\nThe CBN will enhance its monitoring and supervisory oversight over the banks and will apply appropriate sanctions for violations of extant laws and regulations as well as ensure the protection of depositors’ interests.\r\n"},{"id":440,"question":"In the event of a merger or acquisition, how will depositors be affected?","category":"Banking Sector Recapitalization Programme 2024","answer":"In a merger or acquisition scenario, depositors' accounts and funds will remain secure. The acquiring institution will assume responsibility for all liabilities and obligations, including the protection of depositors.\r\n\r\n"},{"id":441,"question":"How can the public stay informed about the progress of the programme?","category":"Banking Sector Recapitalization Programme 2024","answer":"The public can stay informed about the progress of the Programme by monitoring communications from the CBN, through its official website (www.cbn.gov.ng), social media handles and other communication channels."},{"id":442,"question":"What are the consequences if a bank fails to meet the new capital requirements?","category":"Banking Sector Recapitalization Programme 2024","answer":"The CBN remains optimistic that all banks will comply with the new capital requirements and will constantly engage banks on the status of execution of their respective implementation plans. In the event of non-compliance with the new capital requirements at the expiry of the transition timeline, the CBN will take appropriate steps in line with the provisions of relevant laws and regulations to sustain confidence in the banking system. "},{"id":7,"question":"Are the coins for accounting purposes or for transactions?","category":"Currency Management","answer":"The coins were introduced into the system to further ensure a balance in the nation's currency structure and unit of accounts, as well as ease transactions in the country."},{"id":67,"question":"How do I tell the difference between a counterfeit and a genuine Naira note?","category":"Currency Management","answer":"Each Naira note has its own special print features that deters counterfeiters from creating one. These features range from those we can see with our eyes, feel with our hands, and those that reflect or illuminate under varying light conditions. These features and more are all described in the Currency Management section of this website."},{"id":70,"question":"How do we identify the polymer notes?","category":"Currency Management","answer":"(a) In the watermark, the eagle is replaced with CBN logo and letters \"CBN\" in a vertical format which can be seen more clearly when the notes are held up against light.\r\n(b) On the N20 note, there is an oval-shaped, green coloured area in the lower part of the window. When the note is tilted, the colour changes from green to gold.\r\n"},{"id":89,"question":"How many denomination of coins do we have?","category":"Currency Management","answer":"We have three denomination of coins. They are N2, N1 and 50 kobo."},{"id":118,"question":"Is it allowed to sell mint Naira notes in the public?","category":"Currency Management","answer":"No, it is illegal to sell mint Naira notes in the public.The security agencies have been empowered to arrest those involved in the illegal act."},{"id":157,"question":"What are the distinct features of these coins?","category":"Currency Management","answer":"The N2 coin is bi-metallic with the portrait of the National Assembly symbolizing our democracy. The N1 coin is also bi-metallic with the portrait of Herbert Macaulay, a foremost nationalist. The 50 kobo coin has one colour with cobs of maize, depicting agriculture."},{"id":183,"question":"What can I do as a patriotic citizen of Nigeria to promote the use of these coins?","category":"Currency Management","answer":"You can now insist on having your change include coins, in your daily transactions. The national currency is a symbol of our identity and value, therefore, handle the currency with dignity and respect."},{"id":253,"question":"What measures did the CBN put in place to enlighten the public on the use of these coins?","category":"Currency Management","answer":"The CBN embarked on public sensitization through the print and electronic media, as well as the Bank's branch network. These advertisements and enlightenment programmes are meant to reach out to the generality of Nigerians."},{"id":299,"question":"Why change the currency notes?","category":"Currency Management","answer":"(a) To make them more secure.\r\n (b) To make them last longer in circulation and look cleaner.\r\n(c) To reduce the cost of replacing dirty notes.\r\n(d) The polymer notes are now smaller in size and would easily fit into wallets."},{"id":300,"question":"Why did CBN bother to introduce the coins when coins were unpopular?","category":"Currency Management","answer":"No society can do without coins to facilitate transactions. The coins would reduce the tendency to approximate transactions. Before the reintroduction of coins, goods were priced in multiples of fives because of the dearth of coins and this affected price levels greatly. No goods could be bought for N1 because no such denomination existed, so prices of the lowest-priced goods were raised to N5 or N10."},{"id":301,"question":"Why did the CBN decide to restructure the coins along with the naira notes?","category":"Currency Management","answer":"The old coins were too big and heavy and therefore, very inconvenient for transactions. Usually, countries restructure their currencies once in every 5 - 8  years and the currency restructuring was long overdue. As a result, the coins being a legal tender had to be changed and established as a unit of account."},{"id":305,"question":"Why do traders hesitate to accept the coins?","category":"Currency Management","answer":"There is no reason why traders should not accept these coins because they are light, portable and convenient to carry. They ensure more accurate transactions and they are legal tender. With sustained sensitization, the public will get used to spending coins."},{"id":317,"question":"Why should I check Naira notes (banknotes)?","category":"Currency Management","answer":"It's a good idea to check your notes whenever exchanging them with someone. Its especially important to be careful if you are in poor light or cannot see the notes clearly. When checking Naira notes, don't rely on just one feature but check a few of the ones described in the \"Currency Management\" part of this website. Feel the note in your hands and look at it closely. If you have any doubts, compare it to one that you know is genuine."},{"id":336,"question":"Why is the CBN the only bank that can produce the Naira?","category":"Currency Management","answer":"Section 2b and Section 17 of the CBN Act give the CBN the sole right to issue currency notes and coins throughout Nigeria and neither the Federal Government nor any State Government, Local Government, other person or authority shall issue currency notes, banknotes or coins or any document or token payable to bearer on demand being document or token which are to pass as legal tender. Section 18 of the CBN Act also gives CBN the power to print banknotes and mint coins."},{"id":338,"question":"Are machines for printing money available for purchase by the public?","category":"Currency Management","answer":"No. The machines are only available to issuing authorities on request."},{"id":339,"question":"What Department of the CBN is responsible for the printing of money?","category":"Currency Management","answer":"Currency Operations Department."},{"id":342,"question":"What is the purpose of printing polymer notes?","category":"Currency Management","answer":"To extend the life span of the banknotes as the polymer notes lasts three times longer than the paper banknotes. "},{"id":354,"question":"How long does the polymer note last?","category":"Currency Management","answer":"18 to 24 months."},{"id":355,"question":"Where can one change currency notes?","category":"Currency Management","answer":"Deposit Money Banks (DMBs) and the CBN."},{"id":357,"question":"Can coins be deposited in the Banks?","category":"Currency Management","answer":"Yes."},{"id":359,"question":"How are new currencies circulated?","category":"Currency Management","answer":"CBN evacuates the finished banknotes from the Nigerian Security Printing & Minting (NSPM) Plc for distribution to all CBN branches. The branch further distributes the banknotes to DMBs where they are finally released to the public via withdrawals."},{"id":361,"question":"Why are there no new currencies in circulation?","category":"Currency Management","answer":"Analysis of the currency in circulation showed that a large and increasing proportion of the Nigerian currency outside the commercial banking system (COB) is held by the general public who hoard a lot of the new banknotes."},{"id":367,"question":"Why are the lower denomination banknotes scarce?","category":"Currency Management","answer":"The scarcity of lower denomination could be linked to the fact that these notes are held by the public. Absence of Automated Teller Machines (ATM) dedicated to dispense lower denominations has also contributed to the dearth of lower denomination in circulation."},{"id":368,"question":"Why are there huge numbers of dirty One Hundred Naira notes in circulation?","category":"Currency Management","answer":"Handling habits of the general public such as, squeezing, staining, spraying etc. greatly contributes to soiling of the banknotes."},{"id":370,"question":"In view of the fact that some esteemed members of the public abuse the naira at rallies and public events, how do we expect the people to treat the naira with care?","category":"Currency Management","answer":"CBN constantly sensitizes the general public through public enlightenment campaigns through the print and electronic media on how to properly handle the naira. Further sensitization campaigns are arranged to engage esteemed members of the public and other respected elders to make them change champions of the Bank's Clean Notes Policy. This would enable the public follow suit."},{"id":371,"question":"Can an individual bring a different currency other than the Naira to the museum for exchange?","category":"Currency Management","answer":"No. However, Currency Museum receives donations of artefacts and currencies from other countries for display."},{"id":373,"question":"Does CBN collect old currencies as donations for the Museum?","category":"Currency Management","answer":"Yes. "},{"id":375,"question":"How does the Central Bank of Nigeria know the accurate amount of Currency in Circulation (CIC) and how correct is the information on the site concerning Currency in Circulation?","category":"Currency Management","answer":"Currency in Circulation can be defined as ‘currency outside the vaults of Central Bank, that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.\r\nThe Central Bank of Nigeria employs what is referred to as the “accounting/statistical/withdrawals & deposits approach” to compute the CIC in Nigeria. This approach involves tracking the movements in CIC on a transaction-by-transaction basis. That is, for every withdrawal made by a DMB at one of CBN’s Branches, an increase in CIC is recorded, and for every deposit made by a DMB at one of CBN’s Branches, a decrease in CIC is recorded. \r\nThe transactions listed above are all recorded in the Central Bank’s Currency In Circulation account, and the balance on the account at any point in time represents the country’s Currency in Circulation.  \r\nThe accuracy of the CIC figure reported on the Bank’s website is a function of the postings made into the CIC account of the Bank at the 37 Branches across the country. \r\nThe Bank, however, operates a robust reconciliation/call-over system, which serves to highlight erroneous or non-impacted postings made into the CIC account in order to have them resolved within the shortest possible time. This ensures that the CIC figure reported by the Bank at any point is free from material error.\r\n"},{"id":377,"question":"What are the factors considered before new currencies are printed?","category":"Currency Management","answer":"The factors include; inflation rate, Gross Domestic Product (GDP), buffer stock, replacement rate from currency disposed, among others."},{"id":378,"question":"Are counterfeit notes processed money by the CBN with printing errors?","category":"Currency Management","answer":"No: Banknotes with printing errors are termed imperfect notes or irregular notes and are identified and disposed while counterfeit notes are fake notes produced by fraudsters using high resolution photocopiers."},{"id":379,"question":"Can members of the public report incidences involving fake currency to CBN?","category":"Currency Management","answer":"Yes. Reports should be submitted to the Director, Currency Operations Department or the nearest CBN Branch."},{"id":381,"question":"What will be the implication, when counterfeiters have the full knowledge of all the security features of the Naira Notes?","category":"Currency Management","answer":"It is unlikely for counterfeiters to have full knowledge of all security features as the banknotes are constantly upgraded with state of the art security features to stay ahead of counterfeiters."},{"id":382,"question":"Are commercial banks equipped to identify the security features on the naira notes?","category":"Currency Management","answer":"Yes. Commercial banks use technologies like ultra violet light, microscopic lenses etc. to distinguish between genuine and counterfeit notes."},{"id":224,"question":"What is the Agricultural  Credit Guarantee Scheme Fund?","category":"Development Finance","answer":"It is a scheme managed by Central Bank of Nigeria (CBN). It provides guarantee cover to banks who give loans to the agricultural sector of the economy. This encourages the banks to provide more funding to the farmers. The Scheme has an authorized share capital of N3 billion controlled by the Federal Government (60%) and the CBN (40%)."},{"id":225,"question":"What is the Agricultural Credit Guarantee Scheme Fund?","category":"Development Finance","answer":"The Agricultural Credit Guarantee Scheme Fund (ACGSF) was established by Decree No. 20 of 1977 to mitigate the risks of banks in agricultural lending and hence encourage them to continue to extend credit to it. The Scheme guarantees  75% of all outstanding loans in case of default , and after realizing the security. The Scheme is managed by the CBN, through its Development Finance Department. The Scheme has an eight-man Board. \r\n"},{"id":187,"question":"What do you need to benefit from Agric Credit?","category":"Development Finance","answer":"You must be a farmer. You must provide collateral if your loan amount is above N20,000. The collateral must be in a tangible form or in form of 25% cash security of the intended loan amount in the form of savings."},{"id":57,"question":"How can you enjoy Agric Credit?","category":"Development Finance","answer":"You can go to any commercial bank or Central Bank branch office in Nigeria and make enquiries."},{"id":447,"question":"What is the Electronic Foreign Exchange Matching System (EFEMS)?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS is an electronic platform introduced by the Central Bank of Nigeria (CBN) for \r\nconducting foreign exchange (FX) transactions in the Nigerian Foreign Exchange \r\nMarket (NFEM). It is designed to match buy and sell orders automatically, enhancing \r\ntransparency and governance in FX trading."},{"id":461,"question":"When will EFEMS be implemented?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS will be fully implemented in the interbank foreign exchange market by \r\nDecember 1, 2024. A two-week test run will take place in November 2024 to ensure \r\nsmooth integration and operation."},{"id":462,"question":"What are the key benefits of adopting EFEMS for Nigeria’s FX trade?","category":"Electronic Foreign Exchange Matching System","answer":"- EFEMS provides real-time pricing and visibility of buy/sell orders, reducing the \r\nopacity in the FX market.\r\n- Automated matching of orders ensures that market participants transact at the \r\nbest available prices, reducing price manipulation and market distortions.\r\n- The system limits speculative trading and reduces the volatility caused by \r\nmarket distortions.\r\n- It enhances oversight, allowing better regulation and monitoring of FX \r\nactivities.\r\n- Real-time data will be accessible to the public, contributing to a more informed \r\nand efficient market."},{"id":465,"question":"How will EFEMS work in the Nigerian foreign exchange market?","category":"Electronic Foreign Exchange Matching System","answer":"Authorised Dealers will use EFEMS to place buy and sell orders in real time. The \r\nsystem will automatically match corresponding orders based on predetermined rules, \r\nensuring swift execution of transactions. All transactions will be reflected immediately \r\nin the system for market participants and regulators."},{"id":466,"question":"What changes will EFEMS bring to the current FX trading process?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS replaces the manual or less-automated trading processes with a streamlined, \r\nfully electronic system. It introduces real-time transaction visibility and ensures that all \r\ntrades are processed through a single, regulated platform. This eliminates inefficiencies \r\nand manual interventions that may previously have led to market distortions."},{"id":468,"question":"What impact will EFEMS have on market rates?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS is expected to promote a market-driven exchange rate. This means rates will \r\nreflect actual market conditions, leading to a more efficient and stable pricing \r\nmechanism in the Nigerian FX market."},{"id":469,"question":"Will EFEMS affect speculative activities in the FX market?","category":"Electronic Foreign Exchange Matching System","answer":"Yes, EFEMS is expected to reduce speculative activities by ensuring that all trades are \r\nconducted transparently and in real time. This minimizes the opportunity for traders to \r\nexploit market inefficiencies or create artificial price movements."},{"id":470,"question":"Who will oversee and regulate EFEMS?","category":"Electronic Foreign Exchange Matching System","answer":"The CBN, in collaboration with the Financial Markets Dealers Association (FMDA), \r\nwill regulate the system. They will publish guidelines, rules, and real-time data to \r\nensure compliance with the Nigerian FX Code and the revised Market Operating \r\nGuidelines for the Nigeria Foreign Exchange Market."},{"id":471,"question":"How can Authorized Dealers prepare for the adoption of EFEMS?","category":"Electronic Foreign Exchange Matching System","answer":"Authorised Dealers are required to ensure that all necessary documentation, training, \r\nand system integration efforts are completed before the go-live date. Dealers should \r\nfamiliarize themselves with the Nigerian FX Code and the revised guidelines to comply \r\nwith regulatory requirements."},{"id":472,"question":"What role will the public play in the EFEMS framework?","category":"Electronic Foreign Exchange Matching System","answer":"The public will benefit from improved transparency, as real-time market prices and data \r\nwill be accessible. This allows market participants, businesses, and individuals to make \r\nmore informed decisions when engaging in foreign exchange transactions."},{"id":473,"question":"How will EFEMS contribute to Nigeria’s FX market stability?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS will help eliminate speculative activities and price manipulation. It ensures that \r\nFX rates reflect actual demand and supply conditions, leading to improved market \r\nstability and better regulation."},{"id":474,"question":"The FX market currently trades on Refinitiv FXT. How will the adoption of \r\nEFEMS affect that?","category":"Electronic Foreign Exchange Matching System","answer":"With the introduction of EFEMS, Authorized Dealers (ADBs) will transition from the \r\ncurrent trading platform (Refinitiv FXT) to EFEMS for all interbank FX transactions. \r\nEFEMS will become the central platform for trade execution and matching, ensuring \r\nall trades are conducted under the CBN’s new governance framework. However, the \r\nexisting platforms like Refinitiv FXT may still serve as supplementary tools for \r\nconversational dealings. "},{"id":475,"question":"How will EFEMS promote price discovery in the Nigerian FX market?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS will enhance price discovery by providing real-time visibility into buy and sell \r\norders across the market, allowing all participants to see the true demand and supply \r\nfor foreign exchange and exchange rates reflecting actual market conditions, rather than \r\nbeing influenced by speculative behaviour or market distortions."},{"id":476,"question":"What matching platform is being proposed: can this be communicated to the \r\nmarket in writing?","category":"Electronic Foreign Exchange Matching System","answer":"The CBN is yet to announce the specific platform selected for EFEMS. Platforms such \r\nas Bloomberg, Refinitv and EBS all offer matching solutions, but the final decision \r\nwould be communicated to the market in writing."},{"id":477,"question":"Scope of trade to be dealt on the EFEMS (all FX or Just Interbank)?","category":"Electronic Foreign Exchange Matching System","answer":"EFEMS is expected to cover all FX transactions including interbank and trades \r\nwith clients. "},{"id":478,"question":"Is there going to be a minimum threshold in terms of notional trades, if there is \r\nwill that be for CBN to decide or FMDA?","category":"Electronic Foreign Exchange Matching System","answer":"The FMDA and the CBN will collaborate on setting appropriate threshold and \r\nguidelines. "},{"id":479,"question":"Are banks still allowed to voice trade or close bilateral outside the EFEMS \r\nplatform?","category":"Electronic Foreign Exchange Matching System","answer":"No, all FX transactions, including bilateral deals and clients’ trades must be conducted \r\nthrough EFEMS. This is to ensure market-driven pricing. Exceptions (if, any) will be \r\noutlined in the system’s operating guidelines. "},{"id":480,"question":"What’s the contingency plan for business continuity in the event of EFEMs \r\nfailure/glitch? Can the market fall back to usual conventional means of closing \r\ntrades?","category":"Electronic Foreign Exchange Matching System","answer":"A robust contingency plan will be in place in case of system failures. The market is still \r\nexpected to maintain access to the conventional dealings as alternative options where \r\nthere is need to do so. This will be with permission of the CBN. "},{"id":481,"question":"CBN said they will publish real time rates etc, on what platform will those be \r\npublished. Will the published rate be considered as of reference rates for the \r\nprevailing rate of USDNGN?","category":"Electronic Foreign Exchange Matching System","answer":"If so, any details on how the CBN intends on \r\ncomputing the rate before they publish would be beneficial. \r\nReal-time rate and other key data from EFEMS will be published on the selected \r\nplatform as well as the CBN official websites and other financial information services. \r\nThe rates would serve as reference rate for USDNGN and the methodology for \r\ncomputing and updating these rates will be communicated to market participants."},{"id":383,"question":"Where did the CBN derive the power to manage external reserves?","category":"External Reserves","answer":"The CBN derives the power to manage the external reserves from Section 2 of the CBN Act 2007, which provides among other objectives, that the principal object of the Bank shall be to- “maintain external reserves to safeguard the international value of the legal tender currency.” "},{"id":406,"question":"What are the broad objectives of Reserve Management?","category":"External Reserves","answer":"The objectives of external reserves management in Nigeria are:\r\n•\tSafety - To ensure the preservation of capital\r\n•\tLiquidity- Provision of adequate liquidity to ensure that reserves are readily available to finance day-to-day official transactions and meet unforeseen needs; and\r\n•\tReturn- Earning returns within tolerable risk limits\r\n"},{"id":407,"question":"What is the composition of Foreign Reserves?","category":"External Reserves","answer":"The CBN Act, 2007, Section 24 provides that the Bank shall maintain a reserve of external assets consisting of all or any of the following: \r\n(a)\tGold coin or bullion.\r\n(b)\tBalance at banks outside Nigeria where the currency is freely convertible and, in such currency, notes, coins, money at call and any bill of exchange bearing at least two valid and authorized signatures and having maturity not exceeding ninety days exclusive of days of grace.\r\n(c)\tTreasury bills having a maturity not exceeding one year issued by the government of any country outside Nigeria whose currency is freely convertible.\r\n(d)\tSecurities of, or guarantees by, a government of any country outside Nigeria whose currency is freely convertible provided such securities shall mature in a period not exceeding ten years from the date of acquisition and are of such investment grade as may be determined by the Board from time to time.\r\n(e)\tSecurities of or guarantees by international financial institutions if such securities are expressed in currency freely convertible, in the form of investment grade assets as may be determined by the Board and maturity of the securities shall not exceed five years.\r\n(f)\tNigeria’s Gold Tranche in the International Monetary Fund (IMF);\r\n(g)\tAllocation of Special Drawing Rights (SDR) made to Nigeria by the IMF.\r\n(h)\tInvestment by way of loans or debenture in an investment bank or development financial institutions within or outside Nigeria for a maximum period of five years, in so far as-\r\ni.\tThe amount invested is not more than 5% of the total reserves.\r\nii.\tThe reserve level at the time can sustain twenty-four months of import; and\r\niii.\tThe loan or debenture is in foreign currency:\r\nProvided the investment bank or development financial institution referred to in paragraph (h) carries such a rating by rating agencies as may be prescribed from time to time by the Bank; and\r\n(i)\tSuch other securities and investments as may be approved from time to time by the Board:\r\nProvided they are liquid foreign currency assets that are of investment grade in the form of freely convertible currencies.\r\n"},{"id":408,"question":"Does the CBN have gold reserves?","category":"External Reserves","answer":"The Bank holds gold as part of the reserves."},{"id":409,"question":"What is the base currency for Nigeria's external reserves?","category":"External Reserves","answer":"The base currency for Nigeria’s external reserves is the United States Dollar (USD)."},{"id":410,"question":"Where can I access the daily reserves position?","category":"External Reserves","answer":"The daily reserves position is available on the CBN website. "},{"id":411,"question":"Does the CBN hold crypto assets in the reserves?","category":"External Reserves","answer":"The CBN does not hold crypto in the reserves."},{"id":295,"question":"Who can invest in these Government Securities / Instruments?","category":"Government Securities","answer":"Any member of the public can invest in  Government Securities: individuals, Corporate Bodies (Private and Public), Institutions (Private and Public), Banks, Discount Houses and Brokers."},{"id":220,"question":"What is Secondary Market?","category":"Government Securities","answer":"This is the market for the trading of previously issued securities.  Hence, tenors of the securities traded are shorter than the original tenors.  In the case of treasury bills and treasury certificates which are money market instruments, the market is within and outside the Central Bank of Nigeria.  The market in the CBN is located at the Financial Markets Department, while the outside markets include Banks, Discount Houses,  and Stock - Brokers."},{"id":216,"question":"What is Primary Market?","category":"Government Securities","answer":"This is a market where new issues of securities are available for sale.  The market for new issues in all government securities is the Issues Office, Central Bank of Nigeria."},{"id":241,"question":"What is the procedure for investing in the government securities?","category":"Government Securities","answer":"The applicable procedures for investment vary from one market to the other and from one security to the other.\r\nPrimary market Procedure for investing in treasury bills and treasury certificates:\r\nAll investments are by auction subscriptions at this market are for 91, 182, 364 and 730 days for treasury bills and treasury certificates, respectively.\r\nAn advertisement, inviting bids for the securities is placed in selected national dailies in advance of the auction.\r\nThe amount of securities being applied for must have a minimum value of N10,000 and in multiples of N1,000 thereafter.\r\nInterested investors should obtain and complete application forms through authorized dealers (Banks, Discount Houses and Stock brokers).\r\nInterested Authorized dealers may submit tender on their own account or on behalf of their customers. Therefore, subscription is open to banks, discount houses, corporate bodies, institutions and individuals.\r\nTenders for the Bills or Certificates are submitted on Mondays, Tuesdays and Wednesdays before 1.30p.m on the prescribed printed forms and in sealed envelope marked “TENDER FOR BILLS OR CERTIFICATES”.\r\n\r\nPricing and Allotment:\r\nSuccessful subscribers at the auction are allotted applying the Dutch, Multiple price auction system.  Under the system, successful applicants pay for their allotment at the price quoted by them.\r\nResult of tender and allotment:\r\nThe result of the tender is announced before the close of business on Wednesdays.  Allotment letters are issued to successful tenders on Thursday while payment in full for the amount of the successful tender must be made to the CBN not later than 1.30 p.m on the issue date – Thursdays.  The accounts of the authorized dealers which must be funded are debited with the cost.\r\n\r\nProcedure for investing in FRN Development Stocks: \r\nAn advertisement, inviting bids for the offer securities is placed in the national dailies.\r\nInterested investors usually obtain and complete application forms through authorized dealers (Banks and Stock-Brokers), and CBN branches nationwide.\r\nAllotment is made partly or in full depending on the level of subscription.\r\nAllotment letters and Certificates are issued to successful bidders.\r\n\r\nSecondary Market\r\nProcedure for investing in NTBs through Open Market Operation (OMO); \r\nAll investments are through auctions.\r\nNotice, inviting bids for securities is forwarded to licensed Discount houses and banks a day preceding the auction.\r\nSubscriptions are open to the general public i.e. banks/discount houses, government agencies, corporate bodies, institutions and individuals. All applications must however, be routed through licensed discount houses.\r\nThe amount of securities being purchased must have a minimum value of N10,000 and in multiples of N1,000, thereafter.\r\nEach applicant must state the discount rate and the amount of securities being applied for.\r\n\r\nPricing and Allotment under OMO Auction: \r\nSuccessful applicants at the OMO auctions are allotted using the Dutch, multiple pricing system. Under this system, securities are allotted to applicants at the rate quoted by them.  The accounts of the successful applicants are debited with the cost through the discount houses.\r\nNotification of Results:\r\nResults of the OMO auction are announced  through the discount houses and banks; and on the following day through the media.\r\n\r\nProcedure for investing in securities at Settlement and Control office of CBN Authorised Dealer Banks and Discount Houses and other institutions that maintain accounts with the CBN have direct access to the CBN and they can also give mandate for automatic investment of idle funds on their accounts. Other investors would  communicate their intention through the authorized dealers.\r\nTrading can be undertaken any day of the week during approved banking hours.  Rates at this market are administratively fixed and as such are lower than rates obtained through auctions.\r\nProcedure for investing in Government Development Stocks: All transactions must be undertaken by application through an authorized Stock- broker.  The transactions are carried out in three forms – ‘Cum Div’, “Ex Div’, and ‘at Par”. These terms are explained below:\r\n-\t‘Cum Div’ - the market value plus the accrued interest i.e. from the last interest payment date to the transaction date.\r\n-\t‘Ex Div’ – market value less interest for the number of days to the interest payment date (that is for transactions executed after closure of Stock Register i.e. 21 days to the next interest payment date).\r\n-\t‘At Par’ – same as the nominal value.  Transactions are at par when they take place on interest payment dates.\r\nProcedure for investing in the 1st Federal Government of Nigerian Bonds:\r\nAll transactions in the Bond must be undertaken by application through a  Government Stock broker. \r\n\r\n"},{"id":55,"question":"How can the securities be realized on maturity?","category":"Government Securities","answer":"The face value of the short-term securities is automatically repaid to the account of the investor by the CBN through an Authorized Dealer.\r\nThe process for the redemption of stocks on maturity is as follows:\r\nAn advertisement notifying investors of particulars of stock to be redeemed is placed in national dailies in advance of the redemption.\r\nLetters are written to investors along with a redemption instruction form requesting customers as to the method of payment preferred (i.e. by direct debit through warrants or a specified banker).\r\nCompleted redemption form and the original certificate are submitted to the Issues Office of CBN for necessary action.\r\n"},{"id":117,"question":"In which market are the Government Securities traded?","category":"Government Securities","answer":"There are two markets for dealing in government securities: Primary Market and Secondary Market.\r\n\r\n"},{"id":128,"question":"Must the securities be held to maturity?","category":"Government Securities","answer":"Securities purchased by an investor may be disposed in either of the following ways before maturity;\r\nOutright sale of the securities to another investor in the secondary market without incurring any capital loss. Delivery of the securities and proceeds are guaranteed by CBN;\r\nEntering into a Repurchase transaction, which allows the investor to sell the securities to raise needed fund and simultaneously undertaking to buy the securities back at an agreed future date.  This arrangement enables the investor to raise funds by temporarily parting with ownership of the securities in time of need but with an assurance of repossession at a later date.\r\nOutright rediscounting of the instrument for cash at CBN before maturity can be routed through an Authorised Dealer."},{"id":144,"question":"What are Federal Government of Nigeria Bonds?","category":"Government Securities","answer":"These are also long term interest bearing debt instruments issued by the government  to enthrone a more rational management of its fiscal operations, ensuring wider maturity spectrum for its financing through the balanced use of the Money and Capital Market and in particular, longer term financing for its capital expenditure programme.   They have a tenor ranging from two to ten years. "},{"id":145,"question":"What are Federal Republic of Nigeria Development Stocks, FRNDS?","category":"Government Securities","answer":"These are long-term interest bearing debt instruments issued by the government to finance its development projects.  The stocks have tenors ranging from two to twenty five years."},{"id":146,"question":"What are Government Securities?","category":"Government Securities","answer":"These are securities issued by the Central Bank of Nigeria on behalf of the Federal Government of Nigeria.  They comprise Nigerian Treasury Bills (NTB), Nigerian Treasury Certificates, Federal Government Development Stocks (FRN DS) and FGN Bonds."},{"id":148,"question":"What are Nigerian Treasury Bills (NTB) ?","category":"Government Securities","answer":"These are short-term securities issued at a discount for a tenor ranging from 91 to 364 days, such that the income received is the difference  between the purchase price and the amount received at maturity or prior to the sale."},{"id":149,"question":"What are Nigerian Treasury Certificates (NTC)? ","category":"Government Securities","answer":"These are similar in all respects to NTBs except that they have maturities of either one or two years. They are no longer being issued."},{"id":151,"question":"What are the attributes of Government Securities?","category":"Government Securities","answer":"The short-term securities can easily be converted into cash because facilities exist in the market for enhancing the liquidity of the instruments.\r\n\r\nThe securities can be traded without unduly affecting their market price while transfer is by simple delivery.\r\n\r\nIn view of the capability and willingness of the issuer to meet principal and interest  payments as and when due, the securities are considered to be the safest in the market.\r\n\r\nMost of the securities are eligible for classification as liquid assets of banks in the computation of their liquidity ratio.\r\n"},{"id":154,"question":"What are the benefits that an investor can get by investing in the Government Securities?","category":"Government Securities","answer":"Benefits of short term securities (i.e.  Nigerian Treasury Bills) are:\r\nYield/Income on investment is realizable upfront and can be automatically reinvested for a higher income.\r\nYield / Income on investment is competitive with returns on other money market instruments of similar maturities.\r\nThe securities have zero-default risk.\r\nYield/Income on investment is tax-free.\r\nThe securities can be used as collateral for short-term borrowing from banks.\r\nThey are bearer securities and negotiable.\r\n\r\nBenefits of long-term securities are:\r\nCould serve as collateral for borrowing.\r\nInterest is paid half-yearly.\r\nIt can be traded on the stock exchange and\r\nInvestment has a zero-default risk."},{"id":155,"question":"What are the core disciplines required for recruitment into the Bank?","category":"Human Resources","answer":"Accountancy;\r\nBanking/ Finance;\r\nBusiness Administration;\r\nEconomics;\r\nSociology;\r\nStatistics;\r\nComputer Science and\r\nLaw"},{"id":40,"question":"Does the CBN place age limits in recruitment?","category":"Human Resources","answer":"Yes, this depends on the entry point, skills and length of experience required."},{"id":41,"question":"Does the CBN take into cognizance the state of origin of applicants?","category":"Human Resources","answer":"Yes, to create a good mix of Nigerians. "},{"id":27,"question":"Does CBN  recruit physically challenged persons?","category":"Human Resources","answer":"Yes."},{"id":30,"question":"Does CBN operate an equal gender policy?","category":"Human Resources","answer":"Yes. "},{"id":35,"question":"Does the CBN accept NYSC members?","category":"Human Resources","answer":"No. We presently do not accept National Youth Service Corps (NYSC) members."},{"id":36,"question":"Does the CBN accept students for Industrial Training?","category":"Human Resources","answer":"No. We presently do not accept interns."},{"id":271,"question":"When does CBN recruit?","category":"Human Resources","answer":"Any time the need arises."},{"id":289,"question":"Who are the auditors in the Central Bank of Nigeria?","category":"Internal Audit","answer":"The Internal auditors are employees of the Central Bank of Nigeria that report directly to the Governor of the Central Bank. This assures the independence of the internal auditor. There are also External auditors i.e. firms of professional auditors: Ernst & Young; and KPMG, respectively.\r\nThe Internal Audit Department performs liaison functions for all external auditors."},{"id":293,"question":"Who audits the Auditor?","category":"Internal Audit","answer":"The Internal Audit Department puts in place an in-house Audit Team each quarter to audit its books as it does to other Business Units. Also, there are the External Auditors from the Office of the Auditor General of the Federation; and firms of professional auditors; Ernst & Young, and KPMG, respectively."},{"id":234,"question":"What is the mandate of the Internal Audit Department?","category":"Internal Audit","answer":"(i)\tExamine and evaluate the adequacy and effectiveness of the Bank's risk management system, internal controls and Governance processes.\r\n(ii)\tExamine, evaluate and review all activities, records, processes and operations in the Bank.\r\n(iii)\tOffer advisory and consulting services to Management.\r\n(iv)\tCarry out investigations as and when required.\r\n(v)\tEnsure compliance with statutes, regulations, directives and policies.\r\n(vi)\tEnsure and safeguard the Bank's Assets and liabilities."},{"id":263,"question":"What types of audits are conducted?","category":"Internal Audit","answer":"(i) Financial and compliance:\r\nThis includes examination of financial records and related controls. It is aimed at determining that funds are properly expended, receipts are properly recorded and financial reports and statements are complete and reliable.\r\n\r\n(ii)\tInformation Systems: \r\nThese are comprehensive reviews of the efficiency of all IT systems deployed in the Bank.\r\n\r\n(iii)\tBudget Monitoring: \r\nThis audit is to ensure that budgetary provisions are complied with and variances are accounted for.\r\n\r\n(iv)\tInvestigative/On the Spot check: \r\nThis is undertaken when circumstances or evidence suggest irregularities.\r\n\r\n(v)\tMonitoring:\r\nThis is a follow-up that determines whether the Auditee's Management has taken appropriate steps to address previously reported issues."},{"id":213,"question":"What is Internal Auditing?","category":"Internal Audit","answer":"The Internal Audit function is an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. The Internal Audit Department evaluates the adequacy and effectiveness of the Bank's internal control systems, risk management and governance processes; and ensures compliance with procedures and policies with a view to achieving cost efficiency.\r\n\r\n\r\n\r\n\r\n"},{"id":47,"question":"How are results of internal audits communicated?","category":"Internal Audit","answer":"All routine internal audit result in a written report that documents the findings which are discussed with the Auditee's Management and report sent to the Governor of the Bank.\r\n\r\n"},{"id":49,"question":"How are the internal audits scheduled?","category":"Internal Audit","answer":"The Governor of the Central Bank of Nigeria approves a quarterly audit for high risk Business Units and bi-annual audit for low risk Business Units. Investigations and on the spot checks are also carried out when necessary. "},{"id":82,"question":"How is an audit finding corrected?","category":"Internal Audit","answer":"An audit finding or observation is an indication that some type of management expectation was not complied with. This results from the audit process of comparing what is with what ought to be. The audit report states the exceptions observed, its implication, and makes a recommendation in line with what it should be. The process owner effects the correction and the auditor returns to monitor the implementation.\r\n"},{"id":86,"question":"How long does an audit take?","category":"Internal Audit","answer":"This varies depending on the nature of the audit; one week for branches, and between one and three weeks (depending on the size) for the departments.\r\n\r\n"},{"id":188,"question":"What does a typical audit entail?","category":"Internal Audit","answer":"An authority to audit signed by the Governor of Central Bank of Nigeria is presented by the Auditor to the management of the Busines Unit to be audited. The Head of the Department/Busines Unit then acknowledges it on the spot and arranges to present all necessary documents for audit review, as well as the brief the staff on the need to co-operate with the auditor in performance of his duties.\r\n\r\n"},{"id":166,"question":"What were the IT Initiatives that were under CBN's Project EAGLES?","category":"IT Initiatives","answer":"1. Enterprise Resource Planning (ERP)\r\n2. Temenos T24\r\n3. Electronic Financial Analysis and Surveillance System (eFASS)\r\n4. Real Time Gross Settlement System (RTGS)\r\n5. Enterprise Management and Security System (EMS)\r\n6. Corporate Performance Management System (CPM)"},{"id":218,"question":"What is RTGS?","category":"IT Initiatives","answer":"RTGS is an acronym for Real Time Gross Settlement."},{"id":206,"question":"What is eFASS?","category":"IT Initiatives","answer":"It is an acronym for Electronic Financial Analysis and Surveillance System."},{"id":207,"question":"What is ERP?","category":"IT Initiatives","answer":"It is an acronym for Enterprise Resource Planning."},{"id":200,"question":"What is a Microfinance Bank (MFB)?","category":"Microfinance","answer":"A Microfinance Bank (MFB) is any company licensed by the Central Bank of Nigeria (CBN), to carry on the business of providing financial services such as savings and deposits, loans, domestic funds transfer and non-financial services to microfinance clients."},{"id":181,"question":"What are the unique features that distinguish microfinance from other formal financial products?","category":"Microfinance","answer":"(1)The smallness of loans advanced and/or savings collected.\r\n(2)The absence of asset-based collateral.\r\n(3)Simplicity of operations."},{"id":294,"question":"Who can establish a Microfinance Bank?","category":"Microfinance","answer":"A Microfinance bank can be established by individuals, groups of individuals, community development associations, private corporate entities or foreign investors"},{"id":280,"question":"Where should the application for licence be directed?","category":"Microfinance","answer":"Application for a licence to operate an MFB should be sent to The Governor, Central Bank of Nigeria or The Director, Financial Policy & Regulation Department."},{"id":291,"question":"Who are the target clients of Microfinance Banks?","category":"Microfinance","answer":"Microfinance Banks target client includes the following group of persons:\r\n(a)\tThe economically active poor.\r\n(b)\tLow-income households.\r\n(c)\tThe un-banked and under-served people, particularly vulnerable groups such as women, youths and the physically challenged.\r\n(d)\tInformal sector operators, micro-entrepreneurs and subsistence farmers."},{"id":177,"question":"What are the specific objectives of the new microfinance policy?","category":"Microfinance","answer":"The specific objectives of the microfinance policy are to:\r\n(a)\tMake financial services accessible to a large segment of the potentially productive Nigerian population which would otherwise have little or no access to financial services.\r\n(b)\tProvide synergy and mainstreaming of the informal sub-sector into the national financial system.\r\n(c)\tEnhance service delivery by microfinance institutions to Micro, Small and Medium Enterprises (MSMEs).\r\n(d)\tContribute to rural transformation by mobilizing savings.\r\n(e)\tPromote linkage programme between Microfinance Institutions (MFIs), Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), specialized Funding institutions.\r\n(f)\tCreate employment opportunities and increase the productivity and household income of the economically active poor in the country, thus enhancing their standard of living.\r\n(g)\tPromote a platform for microfinance service providers to network, exchange view and share experience."},{"id":147,"question":"What are microfinance loans?","category":"Microfinance","answer":"Microfinance loans are small loans granted to micro enterprises by financial intermediaries on the basis of the borrower’s cash flow. \r\n"},{"id":88,"question":"How many categories of MFB licences are available?","category":"Microfinance","answer":"Based on the recent reform, there are three (3) categories available to promoters based on geographical spread:\r\n(a)\tA Unit MFB licensed to operate in one location.  It shall be required to have a minimum paid-up capital of N20 million;\r\n(b)\t A State MFB licensed to operate within a specific state or F.C.T. and can open branches or cash centers within the same state or the F.C.T. subject to a prior written approval of the Central Bank of Nigeria.  It shall be required to have a minimum paid-up capital of N100 million;\r\n(c)\tA National MFB licensed to operate in more than one state including the Federal Capital Territory and can open branches in all states of the Federation and the F.C.T. subject to a prior written approval of the Central Bank of Nigeria. It shall be required to have a minimum paid-up capital of N2 billion.\r\n"},{"id":108,"question":"I already provide microfinance service through an NGO, must I transform to MFB?","category":"Microfinance","answer":"Any NGO-MFIs providing Microfinance with an asset base of N20 million or above, and/or a membership of 2,000 and above which intends to accept deposit from the public, shall be required to transform. An existing NGO-MFI, which intends to operate an MFB, can either incorporate a subsidiary MFB while still carrying out its NGO operations or fully convert into an MFB.\r\n\r\nWhere, however, the existing NGO-MFI intends to engage only in the provision of micro-credit to their targeted population without mobilizing deposits from the general public, it shall not be required to transform.  It would, however, be required to forward periodic returns on their activities to the CBN for statistical purposes."},{"id":73,"question":"How does e-money affect the efficacy of Central Bank’s monetary policy?","category":"Monetary Policy","answer":"The introduction of e-money poses a challenge to Central Bank’s ability to control interest rate, as well as increase endogenous financial instability. The challenge to interest rate control stems from the possibility that e-money may diminish the financial system’s demand for Central Bank’s liabilities, thereby rendering it unable to conduct meaningful open market operations. Increased financial instability could emerge from the increased elasticity of private money production and from periodic runs out of e-money into Central Bank money that generate liquidity crises. "},{"id":61,"question":"How do Central Banks tackle the problem of uncertainty in the conduct of Monetary Policy?","category":"Monetary Policy","answer":"To mitigate the problems of uncertainty in the conduct of monetary policy, central banks seek ways to obtain a better knowledge of the structure and functioning of the macro-economy, as well as the transmission mechanism of monetary policy. The credibility of the Central Bank is also an important factor in ensuring the efficient conduct of monetary policy, especially under conditions of uncertainty. Central Banks can also design robust policies that can perform well on average across all the available fully specified models rather than to reign supreme in any particular model, in order to mitigate the problem of model uncertainty."},{"id":32,"question":"Do National Central Banks have sovereignty in the Monetary Union?","category":"Monetary Policy","answer":"The National Central Banks lose their sovereignty and have no power to conduct individual monetary policy for their countries but become branches of the common central bank."},{"id":24,"question":"Can the Federal Government frustrate the Central Bank from pursuing its monetary policy?","category":"Monetary Policy","answer":"Yes. When the Federal government exceeds its revenue the CBN finances government deficit through Ways and Means Advances subject (in some cases) to the limits set by existing regulations, which are sometimes disregarded by the Federal Government. The direct consequence of Central Banks financing of deficits are distortions or surges in monetary base leading to adverse effect on domestic prices and exchange rates i.e macroeconomic instability because of excess liquidity that has been injected into the economy."},{"id":178,"question":"What are the two major phases in the conduct of monetary policy in Nigeria?","category":"Monetary Policy","answer":"The two major phases are the period before the introduction of Structural Adjustment Programme (SAP) in 1986,   and the period since the introduction of SAP.  In the first period, the CBN’s monetary policy framework placed emphasis on direct monetary policy control, while in the second period it relied, and is still relying, on indirect approach anchored on the use of market instruments in monetary management."},{"id":173,"question":"What are the prerequisites for successful monetary policy?","category":"Monetary Policy","answer":"A successful monetary policy is a function of certain fundamental imperatives. Among others, relevant legal and regulatory framework, deep and broad financial market, good understanding of monetary transmission lag, and availability of timely and accurate data and information for the monetary authorities are crucial for successful monetary policy."},{"id":160,"question":"What are the forms of uncertainty in Monetary Policy?","category":"Monetary Policy","answer":"Uncertainty in monetary policy include data, parameter and model uncertainties. Data uncertainty refers to the un-timeliness and inaccuracy of data used in economic and monetary analysis; Parameter uncertainty refers to the uncertainty that relates to the ultimate value(s) obtained in estimating econometric model parameters for a better understanding of the economy; while model uncertainty relates to the choice policy makers have to make between several models at their disposal (reflecting competing economic theories) in trying to explain interrelationships at work in the real economy. Others include lack of knowledge about unforeseen shocks that would dislodge policy makers’ assumptions on the future path of the economy, such as oil price shocks, the complexity of the economy and the pervasive character of economic change."},{"id":163,"question":"What are the goals of Monetary Policy?","category":"Monetary Policy","answer":"The ultimate goals of monetary policy are basically to control inflation, maintain a healthy balance of payment position in order to safeguard the external value of national currency and promote adequate and sustainable level of economic growth and development. These goals are achieved by controlling money supply in order to enhance price stability (low and stable inflation) and economic growth.  "},{"id":232,"question":"What is the Framework of Monetary Policy in Nigeria?","category":"Monetary Policy","answer":"The framework of formulating and implementing monetary policy in Nigeria has, overtime, witnessed tremendous transformation in line with the evolving financial environment. The major developments include the shift from direct control to market-based approach to monetary management, and the switch from short-term to medium-term framework in the conduct of monetary policy. "},{"id":227,"question":"What is the bank lending channel of monetary policy transmission?","category":"Monetary Policy","answer":"The bank lending channel represents the credit view of the monetary policy transmission mechanism. According to this view, monetary policy works by affecting bank assets (loans) as well as banks’ liabilities (deposits). The key point is that monetary policy besides shifting the supply of deposits also shifts the supply of bank loans."},{"id":203,"question":"What is Balance Sheet Channel?","category":"Monetary Policy","answer":"This refers to the role of financial positions of private agents in the transmission mechanism. It shows how shifts in policy affect not only real economic aggregates but also, the financial positions of private economic agents."},{"id":215,"question":"What is monetary policy?","category":"Monetary Policy","answer":"This concept defines any policy measure designed by the Government or Central Bank to control the cost, availability and supply of credit."},{"id":267,"question":"When and why did the CBN switch from short-term to medium-term framework in the conduct of monetary policy?","category":"Monetary Policy","answer":"The CBN has, since 2002, switched from a short-term (one-year) framework to a medium-term (two-year) framework in the conduct of monetary policy with the aim of  freeing monetary policy from the problem of time inconsistency and minimizing over-reaction due to temporary shocks\r\n\r\n\r\n\r\n\r\n"},{"id":240,"question":"What is the primary instrument of monetary policy under the market-based approach to monetary management?","category":"Monetary Policy","answer":"The Open Market Operations (OMO) is the primary instrument of monetary policy under the market-based approach to monetary management in Nigeria, but it is being complemented by reserve requirements, discount window operations, foreign exchange market intervention, and movement of public sector deposits in and out of the domestic money banks (DMBs)."},{"id":249,"question":"What is Transmission Mechanism?","category":"Monetary Policy","answer":"This concept defines the process or manner by which monetary policy measure(s) affects real economic aggregates like inflation, output, interest, exchange rates and employment."},{"id":236,"question":"What is the meaning of AFEM?","category":"Operations","answer":"Autonomous Foreign Exchange Market"},{"id":237,"question":"What is the meaning of FX?","category":"Operations","answer":"Foreign Exchange"},{"id":204,"question":"What is BIC Directory?","category":"Operations","answer":"It is SWIFT'S Bank Identifier Code Directory."},{"id":190,"question":"What does FEM mean?","category":"Operations","answer":"Foreign Exchange Market"},{"id":135,"question":"The abbreviation APG stands for?","category":"Operations","answer":"Advance Payment Guarantee"},{"id":136,"question":"The acronym WDAS stands for?","category":"Operations","answer":"Wholesale Dutch Action Sales"},{"id":121,"question":"Is the BULLION sold or is it free?","category":"Publications","answer":"The BULLION (journal) is given out free of charge."},{"id":9,"question":"Are the members of the BULLION editorial board all members of CBN?","category":"Publications","answer":"The members of the Editorial Board are all staff of CBN."},{"id":5,"question":"Are contributors to the BULLION paid?","category":"Publications","answer":"Yes, the contributors are given honorarium for any article that is published."},{"id":38,"question":"Does the CBN have any other publications?","category":"Publications","answer":"The CBN has several publications apart from the BULLION."},{"id":45,"question":"How are materials sourced for the BULLION?","category":"Publications","answer":"Experts in relevant fields are commissioned to write articles."},{"id":95,"question":"How often is the BULLION published?","category":"Publications","answer":"The BULLION is published every three months (quarterly)."},{"id":229,"question":"What is the BULLION?","category":"Publications","answer":"It is a CBN, journal which publishes articles on topical national, social and economic issues."},{"id":277,"question":"Where can one get a copy of the BULLION?","category":"Publications","answer":"An electronic copy of the Bullion can be found on this site under the \"Publications\" menu item. "},{"id":279,"question":"Where is the SMEEIS fund domiciled?","category":"SMEEIS","answer":"\r\nThe SMEEIS fund is part of  the SMEEIS Reserves of the banks.\r\n"},{"id":231,"question":"What is the effect on the investment of a bank on my ownership structure?","category":"SMEEIS","answer":"The ownership structure of the business will remain the same; however, the bank may seek representation on the board and management of the company. This is to increase the chances of success and profitability.\r\n"},{"id":221,"question":"What is SMEEIS?","category":"SMEEIS","answer":"SMEEIS means Small and Medium Enterprises Equity Investment Scheme. It was initiated by the Banker’s Committee at its 246th meeting held on 21st December 1999.\r\n"},{"id":239,"question":"What is the opportunity for micro enterprises under the SMEEIS ?","category":"SMEEIS","answer":"\r\n\r\nThe guidelines stipulate that 10% SMEEIS funds should be set aside for micro financing in the form of equity investment in microfinance banks or wholesale funds for on-lending by microfinance banks.  \r\n"},{"id":245,"question":"What is the role of the Central Bank of Nigeria in SMEEIS activities? ","category":"SMEEIS","answer":"The Central Bank of Nigeria co-ordinates the activities of the Scheme through its Development Finance Department which serves as the Secretariat of the Bankers' Sub-committee on SMEEIS.\r\n"},{"id":246,"question":"What is the source of the fund of the SMEEIS?","category":"SMEEIS","answer":"Until 2005 universal banks (members of the Bankers’ Committee) agreed to set aside 10% of their profit before Tax (PBT) annually for the Scheme. With effect from January, 2006 the amount to be set aside by the banks has been changed to 10% of their profit after Tax (PAT)\r\n"},{"id":257,"question":"What sector of the Economy is covered under the SMEEIS?","category":"SMEEIS","answer":"\r\nEvery legal business in every sector of the economy is qualified for adoption as a SMEEIS project with the exception of trading and financial/bank related investment.\r\n"},{"id":260,"question":"What steps do I need to take to be considered under the   SMEEIS?","category":"SMEEIS","answer":"a) Prepare a feasibility report,\r\nb)\tPrepare a 5 year business plan stating the intervention required under the SMEEIS.\r\nc)\tApproach any of the banks in Nigeria.\r\nd)\tThe bank will then assess the proposals and communicate approval or otherwise to you. \r\n\r\n"},{"id":262,"question":"What type of share-holding is acceptable under the SMEEIS by the investing banks?","category":"SMEEIS","answer":"The SMEEIS guidelines allow investing banks to own either ordinary or preferential shares  \r\n"},{"id":84,"question":"How is the verified SMEEIS project Register updated?","category":"SMEEIS","answer":"After investing in any project, the bank sends periodic returns to the Central Bank of Nigeria for verification. The CBN may accept such project after verifying that the investments comply with the SMEEIS guidelines and consequently listed as part of the SMEEIS projects. The project is rejected when the investment does not comply with the guidelines.\r\n"},{"id":64,"question":"How do I know the number of projects a participating bank has invested in?","category":"SMEEIS","answer":"The CBN has a register for verified and accepted projects under SMEEIS.\r\n"},{"id":65,"question":"How do I know the total amount a bank has set aside under SMEEIS since inception? ","category":"SMEEIS","answer":"\r\nThe total amount set aside under the SMEEIS by any bank is always stated in its annual audited accounts under SMEEIS Reserve. \r\n"},{"id":51,"question":"How can I benefit from the SMEEIS?","category":"SMEEIS","answer":"To be eligible for bank’s investment under the Scheme, an enterprise, in addition to being a permissible activity under the Scheme, must have a maximum asset base of N500 million (excluding land and working capital), and with no lower limit of staff. \r\n\r\nIn addition, the enterprise must fulfill the following:\r\na.\tRegistration as a Limited Liability Company with Corporate Affairs Commission.\r\nb.\tCompliance with all relevant regulations of the Company and Allied Matters Acts (1990) such as filing of annual returns, including audited financial statements.\r\nc.\tCompliance with all applicable tax laws and regulations, and rendition of regular returns to the appropriate authorities.\r\n"},{"id":4,"question":"Apart from banks, are there other institutions in Nigeria that can be approached for SMEEIS intervention?","category":"SMEEIS","answer":"You can discuss with registered professional Fund Managers and Venture Capital Companies, which are either independent institutions or subsidiaries of the banks.\r\n"},{"id":15,"question":"At what point will the investing bank pull out of the management of the business after SMEEIS intervention?","category":"SMEEIS","answer":"The bank has a maximum of three (3) years to remain a part owner of the business before the exit strategy as contained in the Memorandum of Understanding (MOU) binding the business relationship. However, if the other party so wishes, the equity arrangement could be renewed. The exit is by selling its shares to the original owners of the company. \r\n"},{"id":142,"question":"What are the objectives of SMEEIS?","category":"SMEEIS","answer":"  The objectives are to:\r\n•\tFacilitate the flow of funds from banks for the establishment of new, viable SME projects, expansion of existing industries and rehabilitation of moribund ones;\r\n•\tStimulate economic growth,\r\n•\tDevelop local technology,\r\n•\tPromote indigenous entrepreneurship, \r\n•\tGenerate employment, and\r\n•\tEnsure output expansion, income re-distribution and production of intermediate goods meant to strengthen inter and intra-industrial linkages\r\n"},{"id":195,"question":"What happens to the fund if a bank refuses to invest in any project?","category":"SMEEIS","answer":"\r\n\r\nThere is a provision in the SMEEIS guidelines that stipulates a time limit within which a bank can hold the reserves in its balance sheet. After the expiration of this period, the amount will be withdrawn by the CBN.\r\nSuch amount will be invested by the Central Bank of Nigeria in NTBs and proceeds used for administrative issues related to SMEEIS.  \r\n"},{"id":196,"question":"What happens when a bank makes a loss?","category":"SMEEIS","answer":"When a bank makes a loss, there is nothing to set aside. If the loss is a one-off occurrence after years of successful operations, the bank is still expected to invest or retain its previous investments. However, if the bank faces a serious cash flow problem, it can either exit or refinance through the Refinancing window."},{"id":185,"question":"What do full disclosure requirements mean?","category":"Supervision","answer":"Full disclosure requirements are the mandatory financial,\r\noperational and management information, which financial\r\ninstitutions are required to disclose in the rendition of their\r\nperiodic returns to the regulatory authorities and the public.\r\nThe process has to do with ensuring the integrity of data in\r\nthe rendition of reports to the supervisory authority and the\r\npublic in order to enable them ascertain the true financial\r\nposition and performance of deposit money banks."},{"id":164,"question":"What are the implications of implementing the\r\nrequirements to the banks?","category":"Supervision","answer":"Obviously, the banks will be better off with full compliance and implementation of the additional disclosures as directed by the CBN since the merits of full disclosures far outweigh\r\nthe demerits. The banking sector, like every other segment of the financial system, thrives on trust and confidence. The full disclosure option will assist all stakeholders to evaluate\r\nthe true and fair positions of the banks and confidently take informed decisions about them. Consequently, the confidence of stakeholders will be a major selling point for the banks.\r\nThe issue of demarketing among the banks would have been systematically and permanently addressed."},{"id":171,"question":"What are the objectives of introducing the full disclosure requirements?","category":"Supervision","answer":"The objectives of introducing the full disclosure requirements\r\nare essentially to provide economic agents (depositors and\r\ninvestors) and other stakeholders with appropriate\r\ninformation to assist them in evaluating the financial\r\npositions and performances of banks, and to enable them\r\nobtain better understanding of unique characteristics of the\r\noperations of banks.\r\nIn view of this, an over-arching and implicit objective of\r\nbanking regulation and supervision is to ensure the\r\nemergence of a strong, safe, stable and reliable banking\r\nsystem that will engender and sustain the confidence of\r\ndepositors and other stakeholders."},{"id":152,"question":"What are the benefits of the measures to the financial institutions and the market in general?","category":"Supervision","answer":"The provision of adequate information enhances the integrity of banks and reduces the reputational risks that could lead to loss of confidence and patronage. It will also help to reduce market uncertainty and limit the risk of unwarranted contagion. The effort of the Bank at enhancing the current regime of information disclosure by banks will help to further promote market discipline. When these are achieved, the banks would have been strengthened to play their intermediation role in the economy. The market would also have been better placed to effectively act as a transmission mechanism for monetary policy measures."},{"id":134,"question":"Since the CBN does not allow the use of borrowed funds to buy shares, should banks be allowed to underwrite bank offers?","category":"Supervision","answer":"The process of underwriting the offer of bank shares is overseen by the Securities and Exchange Commission as well as the CBN. There are regulations in place to guide banks in underwriting shares."},{"id":14,"question":"As a result of the new capital requirement, are foreign banks also being forced to increase their capital bases? ","category":"Supervision","answer":"In order to operate as deposit taking institutions in the Nigerian Financial system, foreign-owned banks have to be incorporated in Nigeria as local companies, and thus, are subject to the rules and regulations guiding all such institutions in the country. "},{"id":1,"question":"Can a customer of bank write to the department and complain on an injustice done to him by the bank?","category":"Supervision","answer":"Yes, a customer is free to write to the Consumer Protection Department (cpd@cbn.gov.ng) and complain if your  your bank still fails to engage you and resolve the complaint within 2 Weeks. If proven, the appropriate action would be taken."},{"id":2,"question":"A customer was denied a facility in a bank because he was reported by the CBN credit bureau as having bad credits with other banks. Is the CBN controlling the disbursement of credits by banks?","category":"Supervision","answer":"No. The CBN credit bureau is only a database where information on all borrowers in the financial system is collated and disseminated to banks to assist them in appraising the repayment capabilities of customers seeking new or additional credit facilities.  \r\n"},{"id":52,"question":"How can I get a copy of the Banking Supervision Annual report?","category":"Supervision","answer":"You can download a copy of the report from the CBN website: www.cbn.gov.ng"},{"id":60,"question":"How did the banks that were granted forbearance by the CBN run up the debts? ","category":"Supervision","answer":"The debts were incurred in the course of CBN playing its role as lender of last resort and as a result of the clearing system that used to be in place. This has since been changed and a new clearing system is in place. Therefore, such indebtedness is no longer possible under the new clearing system. In the old clearing system, a bank's balance may fluctuate temporarily between credit and debit. However, over time, the debits of some banks became core, those debits represent the forbearance by the CBN. "},{"id":103,"question":"How will the measure affect depositors and investors in the financial market?","category":"Supervision","answer":"The full disclosure measures as directed by the CBN are primarily meant to further entrench sound corporate governance in the financial system where accountability, transparency and prudence are the grand norm. Hence, the intention of the CBN is to provide users, including investors and depositors, with requisite information to enable them evaluate the financial position, performance and operations of banks with a view to taking well informed decisions as to where to put their CBN’s ultimate aim is to have in place a full disclosure regime that will put the nation’s banking industry at par with best practice and international standard.\r\nThe measure is in tandem with best practice and in pursuant for the attainment of the world acclaimed requirements of BASEL II and International Financial Reporting Standards (IFRS)."},{"id":244,"question":"What is the role of Banking Supervision Department?","category":"Supervision","answer":"The Banking Supervision Department is one of the supervisory departments of the Central Bank of Nigeria charged with the responsibility of ensuring the soundness of the banking system. One of the core functions of CBN requires it to promote monetary stability and a sound financial system. In discharging this responsibility, the Department carries out on-site as well as off-site supervision of deposit money banks and discount houses."},{"id":306,"question":"Why does a bank need to keep 30% of its assets in liquid form?","category":"Supervision","answer":"Banks are expected to keep 30% of their assets in liquid form at all times so as to enable them meet demand for money by their depositors."},{"id":307,"question":"Why does it take a long time for the CBN to pay depositors after the revocation of a bank’s licence?","category":"Supervision","answer":"The payment of depositors of a liquidated bank is the responsibility of the Nigeria Deposit Insurance Corporation (NDIC) who insures the deposits and is normally appointed as an official liquidator by CBN. Delays are experienced only when there are court injunctions or problem arising from improper documentation of the customer’s deposit records. "},{"id":309,"question":"Why does the CBN have to undertake the audit of deposit money banks?","category":"Supervision","answer":"One of the core mandates of the CBN as contained in Section 2 of the CBN Act, 2007 is to promote a sound financial system in Nigeria. This function is carried out through the supervision and regulation of financial institutions including Deposit Money Banks (DMBs). In carrying out this function, the CBN relies on the provisions of sections 30-32 of the Banks and Other Financial Institutions Act (BOFIA) which empowers it to carry out routine examination of banks, other financial institutions and specialized banks. The audit of DMBs is therefore in consonance with the responsibilities of the CBN under its enabling laws.\r\nAs a result of the global financial crisis which adversely affected the Nigerian economy, in particular the capital market and oil and gas sectors, it was observed by the regulators that some Nigerian banks had huge concentration of exposure to these two sectors, in addition to general weaknesses in risk management practices, poor corporate governance practices and signs of illiquidity as confirmed by the regular visits of the affected banks at our Expanded Discount Window (EDW) and the Standing Lending Facility (SLF) window from October 2008. It therefore became compelling to ascertain the true financial health of the Nigerian banks in the public interest.\r\n"},{"id":302,"question":"Why do banks need to apply to CBN for approval to appoint Directors and top management?","category":"Supervision","answer":"This is a statutory requirement to ensure that the right calibre of people are employed in the banking system."}]