The Central Bank of Nigeria (CBN) has requested statutory powers to freeze accounts linked to criminals in the country.
The apex bank has also called for the creation of a Credit Tribunal to strengthen credit recovery processes and enforcement of collateral rights.
These positions were advanced, in Abuja, yesterday, at the Senate Committee Public Hearing on its Bill for an Act to Repeal the Banks and Other Financial Institutions Act (BOFIA) 2004 and re-enact the Banks and Other Financial Institutions Act 2020.
Mr Kofo Salam-Alada, CBN’s Director Legal Services, in his presentation told the lawmakers said that the 2004 BOFIA provided for the CBN Governor “to apply to the court for orders to freeze accounts which are deemed to be linked with criminal and other civil infractions.”
He noted, however, that in the new Bill, which has passed through the First and Second Readings, that provision was omitted, entirely.
“This omission he told the Senate “erodes the powers of the CBNand creates a huge gap in the regulatory and resolution framework. Therefore, we propose that the extant provisions should be reinstated,” Mr Salam-Alada pointed out.
On the Creation of Credit Tribunal, the director defended the position of the CBN, as according to him, such a tribunal would greatly enhance loan recovery in the nation’s banking industry.
“As part of measures to address the role of non-performing loans, we propose the creation of a Credit Tribunal. The overarching objective is to create an efficient regime for the recovery of eligible loans of banks and Other Financial Institutions (OFls) and enforcement of rights over collateral securities,” the director said.
On Dormant Accounts in banks, the CBN called for the inclusion of provisions to improve the administration of such accounts, adding, “such provisions should address such requirements as the criteria for determining dormancy, the processes for managing the funds in dormant accounts and procedure for reclaiming funds by beneficiaries.”
The apex bank called the inclusion in the Bill, statutory powers of the CBN to intervene in the process of managing a failing bank and bringing it back to sound financial health were possible.
The CBN urged a review of the framework for managing failing institutions in line with international standards to properly delineate roles for the agency tasked with managing failing banks and other financial institutions and those with responsibility for resolving banks and other financial institutions whose license has been revoked.
“In other words, the Central Bank of Nigeria does the former as provided in the BOFIA while NDIC is saddled with the latter under the NDIC Act. The global best practice is to have the banking legislation empower the Financial services industry regulator to regulate banks, promote their soundness and stability superintend issuance and revocation of operating licence without recourse to any other institution; while the Deposit insurer is in charge of bank resolution activities after the revocation of the operating licence,” the director said.
Mr Salam-Alada added: “There is a need to expand the options available to the CBN to resolve failing banks and manage the systemic crisis without recourse to the public treasury. In line with international best practices, we recommend the establishment of a resolution fund to pool resources for managing banking sector distress.
“We also recommend the adoption of additional resolution tools such as bail-in (ensuring that losses are absorbed by shareholders and creditors), sale of the business (allowing the resolution authority to sell all or part of the failing bank to a private acquirer) and asset separation (isolating the “bad” assets of the bank in an asset management vehicle for an orderly wind-down, if immediate liquidation is not justified in current market conditions).
“Several new types of licensed institutions have entered the Nigerian Financial Services sector since the enactment of the 1991 Act. These include the non-interest banks, credit bureaux, payment system service providers, among others. There is a compelling need to introduce new provisions in the Bill to address the unique peculiarities of these institutions.”
The Nigeria Deposit Insurance Corporation (NDIC) agreed with the position of the CBN on the need to delineate the responsibilities of the two organizations in banking failure resolution.
NAICOM Licences Seven New Insurance Firms
By Sola Alabadan
The National Insurance Commission (NAICOM) issued operational licences to seven insurance companies in Abuja today, in line with Market Conduct & Business Practice Guidelines.
The new insurance firms are Heirs Insurance Limited (General), Heirs Life Assurance Limited, Stanbic IBTC Insurance Limited (life), Enterprise Life Assurance Company, FBS Reinsurance Limited, Salam Takaful and Cornerstone Takaful Insurance Company Limited.
The Commissioner for Insurance, Sunday Thomas, who gave the operational licences to the five firms at NAICOM Head Office, said the Commission has issued operational licences to the firms to operate insurance business.
According to him: “The National Insurance Commission (NAICOM) received applications from the under listed companies for registration as Insurance and reinsurance Companies to transact insurance and reinsurance business in Nigeria.
“In fulfillment of the statutory provisions of extant laws for the registration/licensing of insurance Companies, the general public is hereby informed that the Commission has commenced the process of registering the companies.
Consequently:” Heir Insurance Limited (General) has picked, Olaniyi Stephen Onifade as its Managing Director, Stanbic IBTC Insurance Limited, picked, Akinjide Orimolade as Managing Director; Heirs Life Assurance Limited picked Abah Okoriko and Enterprise Life Assurance Company Nigeria Limited picked Fumilayo Abimbola Omo.
“FBS Reinsurance Limited is led by the former Commissioner of Insurance, Fola Daniel. FBS is bringing together professionals with proven experience from the brokerage and underwriting units of the industry including Bala Zakariyau, the former managing director of Niger Insurance who currently plays in a support unit of the Nigerian aviation industry, Ahmed Olaniyi Salawu of the Standard Insurance Consultants, and Wole Oshin Bankole of the Custodian Investment Plc that has just taken a plunge into the property sector by taking a large chunk of the United Property Development Company, a subsidiary of the UACN Plc.
“These crops of professionals represent those with firm beliefs that there is a big insurance potential in Nigeria and indeed, the African continent. Others are Ebele Ofunneamaka Okeke, from Nnewi North, Anambra who rose to the position of the Head of Nigerian Civil Service before her retirement, and also, Yusuf Hamisu Abubakar, a lawyer, and an accomplished administrator and businessman with vast experience at the senior executive level in power and communication sectors.
“The reinsurance firm is required to pay the new N20 billion capitalisation stipulated by the commission under the reform exercise for it to start a business in the industry.”
Power: FG Ready To Support DisCos’ Initiatives – Minister
Mr Saleh Mamman, Minister of Power, says the Federal Government is ready to support any initiative by electricity Distribution Companies (DisCos) aimed at addressing the challenges facing the power sector.
The News Agency of Nigeria (NAN) reports that Mamman spoke at the inauguration of Eko Electric Distribution Company’s (EKEDC) Supervisory Control And Data Acquisition (SCADA) System on Thursday in Lagos.
Mamman said : “I felicitate with and commend the EKEDC’s Board of Directors and management for this milestone.
“SCADA is one of the most advanced technologies in the power distribution business globally and I am optimistic that this event will translate to improved service delivery within EKEDC’s network.
“The inauguration of this SCADA system will help EKEDC monitor and respond quicker to faults and reduce the outage durations which would improve quality of service delivery to customers.”
According to him, the SCADA project will help the DisCo meet its set objectives under the recently executed Service Level Agreements with the Transmission Company of Nigeria (TCN).
He said the project would provide access to real time data that enables distribution system operators to make informed decisions that improve reliability and availability, consistent with the targets of the Service Based Tariff (SBT) regime.
Mamman said the FG was working assiduously to address the challenges of the power sector through initiatives such as the National Mass Metering Programme, the Siemens AG Power Project and upgrade of power infrastructure across the country.
Earlier, Mr Adeoye Fadeyibi, Managing Director, EKEDC, thanked the Central Bank of Nigeria (CBN) for its support to the Nigerian Electricity Supply Industry which paved way for the SCADA project.
Fadeyibi said : “SCADA is a centralised computer system which represents the evolution of our network operations from the present physical monitoring, remote coverage and relay of network information.
“By contrast, SCADA innovatively gathers real time information, identifies loopholes or breaches in the network and transfers this data back to a central site where the necessary analysis and control is carried out.
“The result of this analysis is then displayed in a logical and organised fashion. The project involves monitoring, control, fault tracking, data analysis and operations optimisation of our high-tension network.
“As part of Eko DisCo’s effort to improve operational efficiency, revenue generation and reduction of our Aggregate Technical Commercial and Collection Losses, we have implemented the SCADA project to automate our electric power distribution network across our franchise coverage area.”
He said the achievement by the DisCo showed that the FG’s Power Sector privatisation programme was a laudable decision, as it had completely transformed the sector and the Nigerian Electricity Supply Industry.
Emirates Offers Travellers $500,000 Multi-risk Travel Cover
Emirates airlines has announced that it will provide travellers a multi- risk travel cover worth $ 500 , 000 on top of its current COVID-19 cover.
The airline stated that the new multi- risk travel insurance and COVID-19 cover will automatically apply to all Emirates tickets purchased from December 1 , and extend to Emirates codeshare flights operated by partner airlines , as long as the ticket number starts with 176.
Emirates Chairman and Chief Executive , Ahmed bin Al Maktoum was quoted as saying , “ Emirates was the first airline to offer complimentary global COVID -19 cover for travellers back in July , and the response from our customers has been tremendously encouraging.
“ We have not rested on our laurels and instead continued to look at how we can offer our customers an even better proposition. We are very pleased to be able to now provide this new multi- risk travel insurance and COVID – 19 cover , which is another industry first, to all our customers.”
He added, “ We aim to give our customers even more confidence in making their travel plans this winter and moving into 2021 by the launch of this feature .”
Highlights of the coverage include out -of – country emergency medical expenses and evacuation up to $ 500 ,000 , valid for COVID -19 ( contracted during the trip ) and other medical emergencies while travelling abroad.
It also involves trip cancellation up to $ 7 ,500 for non- refundable costs if the traveller or a relative ( as defined in the policy ) is unable to travel because they are diagnosed with COVID- 19 before the scheduled trip departure date , or for other named reasons – similar to other comprehensive travel cover products.