Connect with us

News

Cash outside banks hits N4.3tn, CBN warns on scarcity

Published

on

Nigeria continues to face cash scarcity despite a significant year-on-year increase of N1.59 trillion in the amount of currency held outside banks.

Data from the Central Bank of Nigeria’s money and credit statistics shows that a substantial proportion of currency in circulation remains outside the banking system, with more than 90 per cent consistently held outside formal financial institutions in 2024.

The data revealed that currency outside banks surged to N4.29tn in October 2024, accounting for 94.3 per cent of the total currency in circulation of N4.55tn.

This represents a significant year-on-year growth of 59 per cent or N1.59tn from N2.70tn in October 2023, when 89.6 per cent of the total currency was outside banks.

Advertisement

On a month-on-month basis, the amount held outside banks increased by 6.8 per cent or N270bn, compared to the N4.02tn recorded in September 2024.

In September 2024, currency outside banks stood at N4.02tn, representing 93.1 per cent of the total currency in circulation of N4.31tn.

This marked a year-on-year increase of 66.3 per cent compared to N2.42tn in September 2023, when 87.5 per cent of the total was outside banks. The month-on-month increase was 3.8 per cent.

In August 2024, currency outside banks rose to N3.87tn, which accounted for 93.3 per cent of the total currency in circulation of N4.14tn.

Advertisement

This represented a year-on-year increase of 73.9 per cent compared to N2.22tn in August 2023, when 83.6 per cent of the total currency was outside banks.

The trend continued in July 2024 with N3.67tn held outside banks, representing 90.5 per cent of the total currency in circulation of N4.05tn.

Despite efforts to promote cashless transactions, the data shows that Nigerians remain deeply reliant on cash, which could hinder the country’s push for modernised financial systems.

The President, Association of Senior Staff of Banks, Insurance, and Financial Institutions, Olusoji Oluwole, attributed the worsening cash shortage across the country to the CBN’s inability to meet the cash demands of commercial banks.’

Advertisement

CBN to fine banks

Meanwhile, the CBN on Friday announced a fine of N150m per branch on Deposit Money Banks found guilty of facilitating the illegal flow of mint naira notes to currency hawkers and unscrupulous agents.

Saturday PUNCH had reported the surge in the hawking of naira notes at exorbitant charges in different parts of the country, as Nigerians continue to struggle with limited access to cash in banking halls despite threats by the CBN.

The apex bank disclosed this in a circular issued on Friday, December 13, 2024 and signed by the acting Director of the Currency Operations Department, Mohammed Olayemi.

Advertisement

The circular revealed that the CBN was concerned about the increasing prevalence of mint naira notes being traded by hawkers, a practice the bank described as impeding efficient and effective cash distribution to customers and the general public.

The circular, which referred to an earlier directive dated November 13, 2024, highlighted the apex bank’s determination to address the commodification of the naira.

Under the directive, any branch of a financial institution found culpable will face a penalty of N150m for the first violation.

Subsequent infractions, the CBN warned, would attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act 2020.

Advertisement

To ensure compliance, the apex bank stated that it would increase periodic spot checks in banking halls and ATMs while deploying mystery shoppers to uncover illicit cash hawking spots across the country.

The circular read, “CBN will continue to intensify the periodic spot checks to the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.

“In this regard, erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify naira banknotes shall be penalised at first instance N150,000,000.00 (one hundred and fifty million naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

Crashed helicopter flying NNPC officials violated regulations – FG

Published

on

Barely two months after a Sikorsky SK76 helicopter operated by East Aviation crashed in Port Harcourt, the Nigerian Safety Investigation Bureau has disclosed that its handlers violated several of the Nigeria Civil Aviation Regulations directives.

Although the bureau was silent on whether or not the vices led to the unfortunate incident, the act shows gaps in the regulatory duties of the NCAR.

The helicopter, which was contracted by the Nigerian National Petroleum Company Limited, plunged into the Atlantic Ocean near Bonny Finima, off the coast of Calabar on October 24, with six passengers and two crew members.

Five bodies of the eight victims have been recovered while the remaining three are still yet to be found.

Advertisement

While reeling out the preliminary findings of the bureau on the accident, The Director-General of NSIB, Alex Badeh, on Tuesday told journalists in Abuja that the crashed helicopter was not fitted with a Flight Data Recorder, a violation of the Part 7.8.2.2(q) of Nigeria Civil Aviation Regulations (Nig. CARs) Act 2023

Badeh added that the helicopter crew members used non-standard phraseology throughout the flight.

The preliminary findings of the bureau read partly, “The helicopter was fitted with a solid-state cockpit voice recorder; The helicopter was not fitted with a Flight Data Recorder; although Part 7.8.2.2(q) of Nigeria Civil Aviation Regulations (Nig. CARs) 2023 requires that FDR shall be fitted on the helicopter; The flight crew used non-standard phraseology throughout the flight.”

The report further reads; “There were no standard callouts for the various phases of the flight; The helicopter Radio Altimeter (Rad alt) was snagged and deferred on October 18, 2024, six days before the accident; No dew point data was reported in the weather information passed to 5N-BQG on the day of the occurrence.”

Advertisement

While speaking on the causes of the crash, Badeh explained that the investigators discovered that it appeared to be “Struggling to gain balance right before crashing into the ocean.”

He further noted that the crew’s struggle was followed by an aural warning from the aircraft, “Bank angle, Bank angle,” which was the last recorded data on the Cockpit Voice Recorder with smoke emanating from the engine before it ditched into the water.

Other reports released by the NSIB include a final report on the serious accidents involving Beech Baron 58 aircraft operated by Nigerian College of Aviation Technology, Zaria with nationality and registration marks 5N-CAG, which occurred on runway 5 at General Hassan Usman Katsina International Airport, Kaduna on December 31, 2022 and five other incidents.

The NSIB, however, charged the NCAA to ensure strict compliance with the Nigerian Civil Aviation Regulations (Nig. CARs) 2023 part 7.8.2.2(q) which requires that all helicopters with a maximum take-off mass over 3175 kg and up to 7000 kg be fitted with a Flight Data Recorder.

Advertisement
Continue Reading

News

Kaduna returns Abacha family property seized by El-Rufai

Published

on

Kaduna State Governor, Senator Uba Sani, has reinstated ownership of two properties previously revoked from the family of the late military dictator, Gen. Sani Abacha, during the administration of his predecessor, Nasir El-Rufai.

The properties, located at No. 9 Abakpa GRA and No. 1 Degel Road, Ungwan Rimi GRA, in Kaduna, had been seized in 2022 following allegations of breaches of occupancy terms under the Land Use Act.

Speaking on Tuesday, Abacha family lawyer, Reuben Atabo (SAN), confirmed the reinstatement, describing it as a significant development.

The revocation, which was widely publicised in newspapers on April 28, 2022, included the late Abacha’s name as item 34 among those affected.

Advertisement

Atabo said the move had caused “embarrassment” to the Abacha family, prompting legal action against the state government.

Governor Sani, however, reversed the revocation in two separate letters dated December 10, 2024, through the Kaduna Geographic Information Service.

Both letters, signed by Mustapha Haruna on behalf of the Director General of KADGIS, directed the family to settle outstanding fees and charges as a condition for reinstatement.

One of the letters reads: “His Excellency, the Governor of Kaduna State, has in the powers conferred on him under the Land Use Act 1978, reinstated the aforementioned title… Subject to strict condition of settling all outstanding fees and charges.”

Advertisement

The Abacha family, through Atabo, welcomed the decision, describing it as a gesture of fairness and justice.

The reinstatement marks a shift from El-Rufai’s administration, which had cited “various contraventions” as the basis for revoking the properties.

Continue Reading

News

CAC deregistered 300,000 dormant companies in one year

Published

on

The Corporate Affairs Commission (CAC) has deregistered over 300,000 dormant companies within a year to sanitise the nation’s corporate registration system.

The Registrar General, Hussaini Ishaq Magaji (SAN), announced this in an exclusive interview with The Nation in Abuja.

Magaji said: “From October 16, 2023, when I assumed office, to date, we have witnessed an extraordinary level of deregistration. In December 2023 alone, we deregistered over 100,000 companies. By February 2024, another 100,000 companies were removed, and recently, we deregistered an additional 100,000.”

The CAC boss explained that the deregistered entities had remained inactive, failing to file annual returns for over a decade.

Advertisement

According to him, some of the companies posed risks to the economy, as they could be used for fraudulent activities.

He said: “Our challenge is that we are not even deregistering in millions. This is because, as I earlier told you, business registration in Nigeria started since sometime around 1912. And what we have in our portal is from 2021. So, you can see the barrier.

“All the historical records from that year to this year are not on the portal. We are onboarding them gradually. When we complete our task, we will then have the total number of the dormant companies and they will go.

“Our system is integrated with critical agencies, such as the Federal Inland Revenue Service (FIRS), security agencies, embassies, and banks. Once a company is marked as inactive on our portal, it cannot access banking services, process embassy documents, or engage in other operations,” he said.

Advertisement

Magaji explained the legal framework supporting these actions, saying: “If a company remains dormant for over 10 years, we are empowered to deregister it. Additionally, even if a company has been inactive for two years without filing annual returns, I can deregister it under the law.”

The registrar general attributed the success of CAC’s measures to the political will of the Federal Government.

He added: “We have been given a free hand by Mr. President and the supervising minister to carry out our duties without interference. This has enabled us to act boldly and decisively.”

Magaji dismissed the claims that a significant number of companies were folding up due to insolvency or economic challenges.

Advertisement

The CAC boss described such assertions as exaggerated.

He added: “While some businesses apply for voluntary winding up, the numbers of such companies are negligible. Many of these cases arise from changes in business focus rather than economic difficulties. For instance, a company like Nokia transitioned from producing phones to manufacturing vehicle tyres.”

Magaji noted that technological advancements and shifts in business strategies were driving many companies to restructure rather than exit the market.

He said CAC hosts Nigeria’s Beneficial Ownership Register, a platform providing free access to information about companies and their significant controllers.

Advertisement

“Nigeria is one of the global leaders in implementing the beneficial ownership register. We are hosting the register at bor.cac.gov.ng. This transparency ensures that even individuals with indirect control of a company must disclose their interest within 30 days,” he said.

Continue Reading

Trending

Copyright © 2024 Naija Blitz News