The Central Bank of Nigeria has released a strong affirmation of the security of cash within Nigerian banks, highlighting the country’s banking sector’s soundness. Amid widespread unconfirmed rumours, not originating with the CBN, raising concerns about the health of Nigerian banks, the central bank of Nigeria asked the people not to panic and to continue with their usual banking activity. To ease people’s anxieties and comfort them, the CBN emphasized its readiness and capability to carry out its stated role of maintaining a stable financial system in Nigeria. This statement by the CBN responds to the concern caused by unverified information and seeks to reassure the public about the safety and stability of the country’s banking industry. “The Central Bank of Nigeria has noticed reports, in certain media outlets, about a recommendation for the Federal Government to take over some CBN-supervised financial institutions,” said the apex bank’s acting Director, Corporate Communications, Hakama Sidi-Ali, in a statement issued on Wednesday. “To avoid any doubt, Nigerian banks are still safe and sound. The CBN advises the public to go about their daily lives without getting disturbed by reports regarding the health of Nigerian banks that have not come from the CBN. “The CBN is fully equipped to carry out its statutory duty of ensuring the stability of Nigeria’s financial system. “We assure the general public and depositors that their funds are safe in Nigerian financial institutions. “Bank customers are therefore advised to proceed with their banking transactions as usual, as there is no cause for concern.” This statement follows a report by the CBN’s special investigator, Jim Obazee, alleging that Godwin Emefiele, the former governor of the federal bank, used proxies to establish two financial institutions. According to the report, Emefiele utilised proxies to acquire Union Bank of Nigeria for Titan Trust Bank Limited and Keystone Bank without providing any proof of payment. As a result, it recommended that the Federal Government reverse the sale and take over the banks.
Some Nigerians who benefited from the Central Bank of Nigeria (CBN) and NIRSAL Microfinance Bank’s targeted credit facility (TCF) have failed to pay N261.07bn out of N419.42bn given out.
Daily Trust reports that the facility launched in April 2020 was to cushion the effects of the COVID-19 pandemic on households and SMEs.
In a document released by the CBN, it said the facility led to the creation of 1,585,872 direct and indirect jobs, contributing to Nigeria’s employment landscape.
It added that of the N419.42 billion disbursed, principal repayments amount to about N41.39 billion, with interest repayments standing at approximately N174.60 million.
But there is a significant outstanding amount of roughly N378.03 billion, with an overdue amount of N261.07 billion, indicating that a large number of recipients have not kept up with their repayment schedules.
The document stated that each of the top beneficiaries of the loan get N2.5m for the purpose of SME finance but categorised as ‘non-performing’, indicating challenges or failures in repayment.
Only one, Centriculture Limited, has been noted as ‘performing’, with a repayment of N1m.
Some recommendations made in the document include to subsume the intervention under the Agri-Business/Small and Medium Enterprise Investment Scheme (AgSMEIS) for better management and outcomes.
Another recommendation is developing a clear exit strategy that aligns with the outstanding balance to aid in the smooth final closure of the scheme.