Business
Analysts express concerns over CBN hyped cashless policy
Recent revelations of uncensored movement of cash in and out of the country have become major concerns to financial analysts over the effectiveness of the much hyped Central Bank of Nigeria (CBN) cashless policy.
The recent revelation by the MD/CEO of First City Monument Bank (FCMB), Adam Nuru, that N573 Million was posted into a church account in error since 2016 and was not public knowledge has left many analysts wondering the relevance of the supervisory role of CBN.
The bank boss also shockingly claimed there were 27 other bank accounts with similar error and that the N573m was the total balance for 983 accounts in the bank at that time.
More worrisome, according to the analysts is the fact that the financial institutions may have not only become conduit pipes for siphoning funds out of the country, but also have perfected acts of doctoring annual reports, so much that, some banks produce two different types.
According to Mrs. Deborah Akinola of Capricorn Finance Ltd, Nigerians should demand to know the relevance of the supervision and examination of CBN on how a bank would transfer in error since 2016 without being detected. Does it mean FCMB didn’t do an annual audit since 2016 not to have detected this grave mistake, and that of 27 others or that CBN has not been doing its periodic scrutinizing of the accounts of the bank. How about the external auditors?
“The banking sector is very critical to the economy being the major mover of the economy and for this kind of lapses even with CBN claiming to be on top of economic situations, leaves much to be desired.”
Another analyst argued that banks are expected to take a big hit to revenues and face rising borrowing costs this year as CBN measures to support the naira squeeze intensify as well as fallout from the coronavirus and the oil price shock.
Chief Executive Officer Urum Kalu Eke said FBN Holdings sold its 65% stake in FBN Insurance to South Africa’s Sanlam Emerging Markets, a minority investor in the business.
He said the group wanted to focus on improving shareholder value with the divestment and boost the capital position of its commercial banking unit, First Bank, to 16.53% as of June, from 15.5% a year ago, close to the regulatory minimum of 15%.
“The outlook continues to remain uncertain. We think that the remaining part of the year will be challenged,” Urum Kalu Eke, CEO, FBN Holdings said on an analyst call.
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