Frequently Asked Questions (FAQ's)

Frequently Asked Questions

What is the full impact of the new policy?

As a package, the new agenda will: * better anchor inflation expectations, * strengthen public confidence in the Naira, * make for easier conversion to other major currencies, * reverse tendency for currency substitution, * eliminate higher denomination notes with lower purchasing power, * reduce the cost of production, distribution and processing of currency, * promote the usage of coins and thus a more efficient pricing and payments system, * promote the availability of cleaner notes, * deepen the Forex market, * ensure more effective liquidity management and monetary policy, * convertibility of the Naira and hence greater confidence in the national economy and lead to greater inflow of foreign investment * position the Naira to become the ‘Reference currency’ in Africa.

1. Question: Can a customer of bank write to the department and complain on an injustice done to him by the bank?

Yes, a customer is free to write to us and complain. If proven, the appropriate action would be taken.

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?

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.

After completing the On-line Registration, what is the next step?

The Supplier shall be advised through e-mail to pay a Processing Fee of N1000.00 at any CBN location of his choice. He/She will then submit his/her documents (copies) along with evidence of payment to the CBN location.

Apart from banks, are there other institutions in Nigeria that can be approached for SMEEIS intervention?

You can discuss with registered professional Fund Managers and Venture Capital Companies which are either independent institutions or subsidiaries of the banks.

Are contributors to the BULLION paid?

Yes, the contributors are given honorarium for any article that is published.

Are the coins for accounting purposes or for transactions?

The newly introduced 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.

Are the members of the BULLION editorial board all members of CBN?

The members of the Editorial Board are all staff of CBN.

Are the processes in the branches going to be designed?

The re-design of the Branches falls under the PIR Project in Branch Operations department. This is currently on-going as Branch Operations is one of the departments to be re-designed in Release 3

Are the specifications introduced in the standard not sufficient? If so why not just introduce the standard, and not the Scheme?

No. The standard covers the technicalities of how cheques are to be printed. The Scheme will ensure that the printing of cheques is completed securely, and that the quality of cheques produced is to the specification required by the Nigerian Banking Industry. As part of the Scheme’s guidelines, a yearly inspection process of the printers will be initiated, to ensure that the standard of cheque printed is maintained.

Are there any changes in the letter of credit (LC) opening process?

Yes. Before an LC can be opened under the DI scheme, the original Form M must have been submitted to the Scanning company who must also accept or reject it within 24 hours. It is only after confirmation of acceptance that the LC can be opened. Thus, Lcs can no longer be opened with faxed documents.

Are there security printing companies who currently personalise cheques, and print the MICR codeline?

Most banks currently undertake the personalisation of cheques, and the printing of the MICR codeline. However, the majority of banks after the consolidation exercise and rationalising their business activities may consider this function to be a non core business activity. To ensure the security measures and quality of the product are maintained, all printing companies where accredited under the scheme after a rigorous screening. Those banks that decide to continue with the printing of personalisation and the MICR codeline after 1 January 2007 shall be subjected to the same accreditation process as prescribed under the Nigeria Cheque Printers Accreditation Scheme.

As a result of the new capital requirement, are foreign banks also being forced to increase their capital bases?

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.

At what point will the investing bank pull out of the management of the business after SMEEIS intervention?

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 or owners of the company.

Beyond N25 billion does CBN plan any further increases in the capital requirements for banks?

The Law empowers the CBN to set minimum capital requirements for the banking system from time to time.

Can a MFB licenced to operate as a unit bank open branches?

A Unit MFB shall be allowed to open branches within a State, subject to meeting the prescribed prudential requirements and availability of minimum free funds of N20.0 million for each new branch.

Can a MFB licenced to operate in a State spread to another State?

A State MFB can spread to another state, provided it has covered two-third of the local government areas of the state it is currently licenced to operate in, subject to a minimum shareholding funds of N1 billion and availability of free funds and, if in the view of the regulatory authorities, it has satisfied all the requirements stipulated in the guidelines.

Can an individual walk into CBN and buy Foreign Currency?

NO,the present policy does not allow individuals to walk into CBN and buy foreign currency.The CBN only sells Foreign currency to Banks and Bureaux de Change.

Can banks go direct to the accredited cheque printer to order their cheques without going through a cheque broker?

Yes, although in practice the bank may want to use the printer’s agents or cheque brokers who are legitimate parts of the cheque purchasing system.

Can old stocks of cheques that do not conform to the standard be used up?

Yes. However, it is up to each bank to take a practical view of its cheque stock particularly in the transition period after the consolidation. It will be in the best interest of each bank to ensure that their cheques have the latest security measures incorporated in them.

If you did not find an answer to your question above, try the Glossary of Terms, or use the form below - ask your question, and we will post it here.

Facts : 1/1/1900

Agric Credit Guarantee Scheme:The Agricultural Credit Guarantee Scheme (ACGS) was established in 1977, under the management of the Central Bank of Nigeria. The scheme was designed to encourage banks to increase lending to the agricultural sector by providing guarantee against inherent risks.

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Frequently Asked Questions

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