The Bureau De Change (BDC) operators have declared operational war against foreign exchange speculators and black market dealers distorting the naira exchange rate against the dollar and other global currencies.
This follows the illegal activities of speculators and black market operators which the BDCs say poses a threat to exchange rate stability.
This disclosure was made by the President of the Association of Bureau De Change Operators in Nigeria (ABCON), Aminu Gwadebe while speaking on the theme, ‘ABCON Sensitisation Against Volatility in the Exchange Rate,’ at a virtual meeting with members of the association across all the six geo-political zones in Nigeria.
Gwadabe said the BDCs will not allow forex speculators and street hawkers to take over BDC business in Nigeria through their illegal practices.
The ABCON boss, at the event which held simultaneously in Lagos, Abuja, Kano, Onitsha, Benin, among others, and attended by over 5,000 BDCs, said licensed BDCs will continue to defend the naira through regulatory compliance and constantly supporting the CBN to achieve stable exchange rate and attract forex into the economy.
Gwadebe said the sensitization programme will upscale BDCs’ compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).
He said, “ Please, now is the time to support the CBN to achieve a stable exchange rate. Do not allow forex speculators, street hawkers to take over our business. Constantly comply with CBN’s regulations on the rendition of returns and corporate governance practices because aside helping in stabilizing the naira, the CBN examiners can visit your offices and defaulting members will be sanctioned.”
According to him, members can be spot-checked by the CBN examiners at any time and should therefore put in necessary measures to align with the regulatory policies.
“Be vigilant in your operations because you can be spot-checked by the CBN examiners at any time. All BDCs should appoint Compliance Officers and Data Protection Officers as directed by the CBN which is also in-line with the global best practices. Also, avoid sending your returns late, selling dollar above CBN approved rate,” he advised.
Gwadabe said that by following set rules, the operators will set a good example in their operational modalities and make forex buyers lose confidence in black market dealers.
He said every BDC operator needs full knowledge and understanding of how to raise and submit both the Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) to regulators, understand the obligation of registering and filing reports on the NFIU goAML -Anti-Money Laundering portal and proper documentation of all forex sales.
He also said all BDCs should file their reports as and at when due on weekly basis to Nigerian Financial Intelligence Unit, and CBN and also Economic and Financial Crimes Commission as well as Know Your Customer (KYC) and due diligence reports.
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Effective assets, liabilities management critical in promoting banking stability — NDIC
By Matthew Denis
The Chief Executive Officer and Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Hassan Bello has disclosed that Effective management of assets and liabilities is critical in promoting stability of the banking operation.
The MD of NDIC made this known at the two days SEC Nigeria-IFSB international Forum held in Abuja on Thursday.
He said, “For the Nigeria Deposit Insurance Corporation (NDIC), our mandate includes deposit guarantee, bank supervision, failure resolution and bank Liquidation.
“This mandate is principally geared at ensuring depositors’ confidence and financial system stability. However, financial system stability is a collective responsibility of the regulators, supervisors and operators.
“While the operators have the duty to play their game according to the rules, the supervisors and regulators on the other hand have the responsibility to provide the enabling framework and guiding principles within which the operators are expected to operate.”
Mr Hassan explained that the NDIC as a deposit insurer and banking supervisor is significantly affected by the activities of the banks particularly in the area of risk management practices.
“Risk management must be comprehensive and should cover all aspects of risks including but not limited to operational, market, credit and liquidity risks.”
According to him, their regular reviews of the banks’ risk management practices showed significant improvement since the adoption of Risk Based Supervision (RBS) Framework by the CBN/NDIC.
He stressed that effective management of assets and liabilities is critical in promoting stability of the banking operation as significant maturity mismatch can prevent banks from meeting obligations, including its ability to respond to depositors’ demand.
“This challenge largely arises as a result of the significant mismatch between the tenors of the available funding to the banks and the tenors required by the seekers of funds. Typically, while the primary source of funds for our banks is short term in nature, the demand side on the other hand is significantly medium to long term.
“This, therefore, results in maturity mismatch causing high vulnerability to risks and by extension safety and stability of the banking sector.
“As regulators and supervisors within the financial sector, our concern would surely be beyond managing the above risks. We must deeply think on how to create enabling policies and frameworks that will support the supply side for our banks.
“In this regard, deposit liabilities that are predominantly short term will not be adequate in providing the required portfolio of funding for the banks to support the real economy with its long term funding needs.
“The question we must therefore ask ourselves, is, how and where should the long term funding be sourced? Non-interest Capital market (NICM) plays a greater role in the provision of long-term financing for the real economy including developmental and infrastructure projects.
“Robust NICM provides products in equity markets, sukuk markets and pooled investment vehicles that provide practical solutions to challenges identified in the financing of real sector and infrastructure projects.”
The MD revealed the NDIC is therefore proud to be associated with the SEC on this giant initiative.
”It is our firm belief that, this Roundtable, would provide a platform for brilliant ideas and experience-sharing, that will open our financial system to foreign direct investments and foreign portfolio investments that will provide both the required long term financing need for our banks, the real economy as well as support foreign exchange liquidity thereby promoting the stability of the financial system not only in the short term but in the medium to long term, in line with the Renewed Hope Agenda of the President.”
He noted that the role of an effective, liquid and well-functioning capital market, cannot be overemphasised in promoting capital formation and economic growth.
Backing this up, he said, “Studies have indicated strong correlation between capital market and economic growth. Broad and deep capital market plays a significant role in supporting and promoting savings mobilisation, resource allocation and diverse sources of funding to the real-economy, thereby facilitating better diversification and management of risk.
“It is instructive to note that a robust capital market is a result of deliberate efforts by the relevant stakeholders. There must be a thoughtful determination by the policy makers to create the enabling environment that allows capital market development to thrive.
“I would like to appreciate the foresight of the SEC’s Management Team for organising this international roundtable targeted at further deepening and broadening our capital market. The global opportunities offered by the non-interest capital market are enormous and can only be fully harnessed if and only when we are able to address some of the challenges inhibiting its growth.
“The Commission as the national regulator of the capital market has commendably done so much in this regard as more still needs to be done in conjunction with relevant stakeholders at both national and regional levels particularly in the area of regional regulatory and policy coordination.”
DMO encourages residents to invest in FGN securities
The Debt Management Office (DMO) has urged the people of Niger State to consider investing in Federal Government of Nigeria (FGN) securities.
This call to action was made during a public awareness event held in Minna, which was a collaborative effort between the DMO and CSL Stockbrokers Group.
The Director-General of the DMO, Patience Oniha, whose message was conveyed by the Head of the Strategy Programme Department at DMO, Ms. Elizabeth Ekpeyong, emphasised the safety of investing in FGN securities.
Oniha assured potential investors that their capital would be secure, highlighting that such investments are protected by law and carry no risk of loss.
The DMO’s initiative aims to bolster the financial future of Niger State residents by presenting FGN securities as a reliable investment option that not only preserves wealth but has the potential to increase it. The event underscored the government’s commitment to fostering economic growth and financial literacy among its citizens.
Investors were reassured of the stability and legal backing of these securities, making them an attractive option for those looking to secure their financial future.
The DMO’s outreach is part of a broader strategy to deepen the domestic bond market and encourage local investment in government-backed securities.
“Investing in Federal Government securities and bonds will increase you financially, and it is the best way to invest your money.
“You are not going to lose anything as long as the federal government is concerned,” she said.
She said that such investment would also help the federal government raise more funds to attract more foreign investors into the country.
Oniha advised the public to invest in the government securities and bonds facilities, as they serve as lifetime financial security for the future.
Managing Director, CSL Stockbrokers Limited, Mr Abiodun Fagbulu explained that the federal government securities were financial instruments issued by the DMO on behalf of the government.
Fagbulu, who was represented by Lead Sales, Northern Region of CSL, Mrs Foluke Samuel assured that the facilities were safe because the federal government was serving as the insurance cover for any investor.
“FGN securities are backed by law, so when you invest, you get a steady flow of income,” he said.
He said that the facilities included the Nigeria treasury bills, FGN bonds, FGN savings bonds, the Sovereign Sukuk and FGN green bonds.
Reacting, Mr Anthony Akuh, a business man and participant, said that he had no knowledge of the securities and bonds but for the opportunity of the awareness programme.
Akuh commended the DMO and CSL for bringing the awareness programme to Minna.
“I will approach a stockbroker immediately for possible investment,” he said.
Recall the programme which was inaugurated in Lagos in March 2022, rounded up its 2023 outing in Minna.
It had also been held in Enugu, Ibadan, Kano, Yola, Umuahia, Gombe, Osogbo, Port Harcourt, Benin, Uyo, Asaba, Maiduguri, Abeokuta and Makurdi.
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