BREAKING: CBN Dollar Sales on I&E Forex Window Falls Below 30% Bankers’ committee simplifies BVN registration process for MFB customers

The Central Bank of Nigeria (CBN) dollar sales
on the Investors and Exporters’(I&E) foreign
exchange (forex) window have reduced to below
30 per cent, the Deputy Managing Director,
Stanbic IBTC Bank Plc, Mr. Demola Shogunle,
disclosed thursday.


Shogunle, who said this while addressing
journalists on the outcome of the 333rd
Bankers’ Committee meeting in Lagos, said the
development on the I &E window was a
reflection of the renewed confidence in the
Nigerian economy.

THISDAY reported last Tuesday that cumulative
transactions on the I&E window which was
created in April has risen to $2.2 billion, from
about $1 billion last month.


Speaking yesterday, Shogunle said the Bankers’
Committee acknowledged that the efforts and
measures that had been put in place regarding
trying to encourage foreign portfolio investors
(FPI) were already yielding fruits.


The Stanbic IBTC boss explained: “Specifically,
you would remember that about six weeks ago,
a new window was opened which is called the
Investors and Exporters’ FX window. Between
when it was opened and now, turnover in that
market is in excess of $2.2 billion, which is very
impressive. The CBN’s share of that market is
less that 30 per cent.


“What does that mean? It means that FPI and
exporters are the ones playing in that market
and because of that, when that window initially
opened, the bid and offer spread was as wide
as N40-N60. As we speak now, the bid and
offer spread has reduced significantly.
“Also, we have seen a kind of convergence
between the rate on that window and that of
the parallel market, which means that
confidence is returning into that market, price
discovery is returning into the market, price
visibility is returning to the market and that is
encouraging. Those who have been sitting on
the fence have started to look in. You can also
see the impact on the equities market. Overall,
we are seeing positive trends and the Bankers’
Committee acknowledge that.”
Responding to a question on when the CBN
would stop intervening in the market, Shogunle
said: “The CBN is also a buyer or seller in the
market. Don’t forget we are coming from a
regime in the past one year, whereby the
central bank was the sole provider of dollars,
100 per cent. But today, on the I & E window,
the CBN is now a minority player.


“So, it is not impossible that we get to a point
where the CBN intervention in the market would
be zero. If FPIs continue to bring dollars into
the system, if exporters continue to bring
dollars into the system, of course the CBN
would keep its dollars.”
Also, Shogunle said with increased liquidity, the
issue of multiple exchange rate would be
addressed, “not by fiat, or by decree,” but
through an inerplay of demand and supply.
Earlier, the CEO of Fidelity Bank Plc, Mr.
Nnamdi Okonkwo, who also joined in briefing
the media, disclosed that as part of efforts to
simplify the Bank Verification Number (BVN)
registeration process for customers of
microfinance banks (MFBs), the committee
decided that such customers can walk into any
commercial banks to get register for BVN.




.
The committee also warned MFBs to desist
from charging customers for BVN enrolment.


“Anything that would stop more people from
being included in the formal financial sector, we
work jointly as banks to make sure that such
bottleneck is removed. So, one key issue that
came up today was the issue of customers of
MFBs who do not have their Bank Verification
Numbers.




“Some feedback we got as a committee was
that some banks charge such customers when
they try to register BVN. So, the Bankers
Committee decided today that MFBs can walk
into any bank and register their BVN free of
charge. That would make sure we don’t
discourage financial inclusion. So, registration of
BVN for MFB customers is free and you can do
that in any bank,” the Fidelity Bank boss
explained.



His counterpart, the CEO of Standard Chartered
Bank, Mrs. Bola Adesola, said the Economic
Sub-Committee of the Bankers’ Committee is
working with the Development Finance
Department of the CBN, CBN Legal Department,
Banking Supervision Department and five
highest contributors Agric/SMEs Equity Fund,
adding that once customers meet the criteria,
the committee would start investing.


“After the audited accounts of banks were
published, we all contributed five per cent of
our profit after tax to a fund at the CBN towards
contributing equity to Agric and SMEs. As you
know, many companies cannot just survive on
debt because of the cost of debt. So, long term
capital required to catalyse growth in SMEs to
make them viable and sustainable.

“Right now, there is about N26 billion in the
fund. We are working on the framework for the
investment. We are looking at partnerships, we
are looking at co-investing, maybe with private
equity firms as well. The objective basically is
to catalyse growth in SMEs, to ease access to
finance, build capacity in the SMEs, create jobs
and ultimately improve prosperity,” she said.
On his part, the Director, Banking Surpervision,
CBN, expressed optimism that the economy
would record positive GDP figures by the third
quarter, owing to decelerating inflation, renewed
investors’ confidence, exchange rate stability,
among others.