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CBN to commercial banks: Notify customers on all transactions

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The Central Bank of Nigeria, CBN, has issued a new guidelines to commercial banks and other financial institutions mandating that the latter should notify customers on all transactions on their accounts as part of their contractual obligations.

It also said failure to comply with the guidelines shall attract regulatory sanctions provided for by the CBN Act, the BOFIA, other laws and regulations.

The new guidelines on Disclosure and Transparency issued last Thursday in Abuja said financial institutions must notify their customers about the amount and date of the transaction as well as the account balance.

Further, the transaction narrations in account statements must state clearly the nature of the transaction, date, payer or payee, transaction channel and location.

Others guidelines are details on how financial institutions would henceforth handle general information to their customers as they relate to advertisement, pre-contractual and contractual disclosures, credit facilities, deposits,

This is pursuant to the powers conferred on the CBN by Sections 2 (d) and 33 (1) (b) of the CBN Act, 2007 (as amended) and Section 57 (2) of the Banks and Other Financial Institutions Act [BOFIA] of 2007, as amended.

The guidelines were contained in the Consumer Protection Framework (CPF) for financial institutions regulated by the CBN.

The affected financial institutions include commercial banks, merchant banks, specialized banks, micro-finance banks, development finance institutions, finance companies, bureaux-de-change, and primary mortgage banks.

Others credit bureaux, mobile money operators, payment service banks, switching companies, payment solution service providers, payment terminal service providers, non-bank acquirer, super agents and mobile money operators.

The CBN said the documents is to protect consumers against the provision of inadequate, misleading or failure to disclose material and relevant information and generally guard against lack of transparency by Financial Institutions in their dealings with consumers

The guidelines are to ensure consumers provided with all material and relevant information regarding their business relationship in a clear and transparent manner.

On contractual disclosures, the new guidelines demand that any proposed and final contract must contain information on key features, risks of the financial product or service, tenor of the contract as well as nature, amount and method of calculation of any interest, fee or charge and when it is payable.

Other details include any changes that may be made to the contract terms, and how the consumer will be informed of such changes; information on how to lodge a complaint to the financial institution and how to escalate complaint to the CBN where necessary.

Also, the consumer must be provided with monthly statements of account for all products and account types, including loan accounts, special accounts and other associated accounts at no cost to the consumer.

In addition, the customer are entitled to account balances on request, while the financial institutions are obliged to give prior notice of variation in interest rates to customers.

The notification to the customers on variation, the CBN said, must state the reason for the variation, commencement date, the revised repayment schedule and the alternatives available such as concession, restructuring, re-negotiation, opt-out or termination of the contract.

Any variation in interest or any other rate, the CBN guidelines said, shall only be implemented after five working days of the notice.

On credit facilities, the new guidelines said any contract for credit must state the name and contact details of borrower, type and purpose of credit, collateral pledged and its estimated value, the amount of credit or applicable credit limit as well as conditions precedent to facility drawdown.

The information to be issued by the financial institution to the customers also stipulated the debt recovery process, moratorium, insurance requirements, details of lending fees, and variable rate information.

The customer information should also include repayment schedule for instalment loans, early liquidation terms, total cost of the credit, and applicable rate of interest or fee relating to late payment or default.

Henceforth, the banks are expected to conspicuously display in their banking halls and publish on their websites and internet banking platforms, accurate and up to date information on all their products.

These include prime and maximum lending rates, deposit rates, foreign exchange rates of currencies.

On advertisement, the content of all advertisements and promotional materials must be factual and unambiguous, expressed in clear and simple language and shall not be offensive, misleading, deceptive, injurious, or exaggerate the benefits of the products or services being advertised.

Unsolicited advertisements through emails, text messages, voice calls and other channels sent by or on behalf of a Financial Institution shall be at no cost to the consumer and shall contain an opt-out provision for future advertisements.

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Customs seizes N5 billion codeine, tramadol

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The strike force of the Controller General of Customs on Friday raided a warehouse in Lagos where cartons of codeine, tramadol, and other illegal drugs worth N5 billion were kept.

The warehouse, located along the Mile-Oshodi expressway, was raided after a trailer load of the hard drugs was intercepted at Maryland in Lagos.

Usman Yahaya, team leader of the Customs Strike Force Zone A, said the trailer was intercepted around 2 a.m. on August 13 by his operatives.

“Immediately it was brought to our notice, we carried a preliminary investigation that led to the discovery of a warehouse along Oshodi-Mile 2 road stocked dreaded tramadol, codeine and other unregistered pharmaceutical products without NAFDAC numbers”.

He said that after evacuating the warehouse of the hard drugs with street value of N5 billion, one suspect was arrested.

“The warehouse was immediately sealed with a detachment of well armed officers to guard the place”.

“The drugs estimated to be loaded in 21 trailers with street value of over five billion Naira are being evaluated for custody and subsequent judicial process/destruction.”

Three weeks ago, the agency in collaboration with the National Administration of Food Drug Administration and Control (NAFDAC) destroyed 48 by 40feet of controlled drugs worth N146billion at a destruction site in Ogun State.

“We therefore call on well meaning Nigerians to support the Nigerian Customs Service on this patriotic resolution”.

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Inflation gets low in July – NBS

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The average change in the prices of foods and services reduced in July compared to June, the statistics bureau, NBS, has said.

According to the NBS, the Headline Inflation reduced to 11.08 per cent in July from 11.22 per cent in June.

The Food Inflation reduced from 13.56 per cent in June to 13.39 per cent in July while the Core Inflation reduced from 8.84 per cent in June to 8.80 per cent in July.

Details later…

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CBN outlines new guidelines to banks

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The Central Bank of Nigeria (CBN) says it has released guidelines for the disbursement of lower denominations of the Naira through microfinance banks (MFBs) across the country.

The bank’s Director, Corporate Communications Department, Mr Isaac Okorafor, made this known in a statement in Abuja on Thursday.

Okorafor said this development was contained in a circular issued by the Director, Currency Operations Department of the bank, Mrs Patricia Eleje, in Abuja on Thursday.

He explained that the circular indicated that all microfinance banks must have a Composite Risk Rating (CRR) of above average in the most recent Risk Based Supervision (RBS) target examination before they were considered for the scheme.

He explained that the measure was to ensure that only MFBs with good corporate governance practices took part, NAN reports.

“Meanwhile, the participating MFBs must be willing to accept a mixture of new and other banknotes, and that the MFBs shall give 20 per cent of any withdrawal in lower denomination notes subject to a maximum of N50,000.

“Where beneficiaries withdraw more than once in a day, the circular said that disbursement will only apply to one transaction per day.

“Similarly, the MFBs are allowed to exchange notes subject to a maximum of N50,000 for customers with bank accounts and N10,000 for customers without bank accounts.

“In that situation, the banks must not exchange for same beneficiaries more than once a week,” he added.

According to him, MFBs are to maintain a register of amounts received from the CBN through their correspondent commercial banks.

Okorafor said the MFB must also maintain another register of the beneficiaries of the lower denomination notes as well as ensure that withdrawal teller slips contain breakdown of the denomination of the currency to customers with accounts.

“The circular also warned MFBs against hawking, hoarding or using of funds obtained under the intervention for any other purpose.

“It also instructed the banks to put in place effective control measures that will ensure that banknotes disbursed to customers with or without accounts are not sold.

“Furthermore, the circular directed the banks to render weekly and monthly disbursement return to CBN branches where the intervention would be monitored periodically, and appropriate sanctions applied to erring MFBs,” he said.

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