CBN Offers $246.2m for Wholesale Forwards, SMEs, Invisibles

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Extends BVN registration for microfinance banks, others
Obinna Chima
The Central Bank of Nigeria (CBN) on Monday offered the sum of $246.2 million to authorised dealers at a foreign exchange (FX) auction on the interbank market for wholesale forwards, small and medium scale enterprises (SMEs) and invisibles.

A breakdown of the amount offered by the regulator showed that $150 million was auctioned at the wholesale window while SMEs and invisibles got $52 million and $44.2 million, respectively.

The bank’s spokesman, Isaac Okorafor, confirmed the offer and sales on Moday, disclosing that the forwards sales would be concluded in the days to come. He, however, added that the CBN would continue its weekly sale to dealers in the Bureau de Change (BDC) segment this week in order to guarantee onward sale to end users.

According to him, the CBN continued interventions in the different segments had guaranteed availability to individuals and business concerns. He disclosed that the Bank was satisfied with the feedback it received concerning the response of SMEs to access forex from the new CBN window.

He said the CBN was particularly determined to ease the challenges hitherto encountered by small manufacturers hence the move to provide them with easy access to forex.
“SME operators no longer have to patronise or source foreign through unofficial windows and no more pressure on either the BDCs or any other unofficial source with the opening of the special window,” he added.
But the naira depreciated to N390 to the dollar yesterday, lower than the N385 to the dollar it closed last Friday.

It would be recalled that the CBN, also last week, created a Forex window for investors and exporters, which it named: ‘Investors’ & Exporters’ FX Window’. The CBN circular, which announced the creation of the new window, disclosed that the purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

Meanwhile, the central bank yesterday announced the extension of the Bank Verification Number (BVN) scheme to Other Financial Institutions (OFIs) under its supervision.
The OFIs include microfinance banks, primary mortgage banks, finance companies, merchant banks, non-interest institutions, among others.
The CBN which stated this in a circular signed by its Director, OFIs Department, Mrs. Tokunbo Martins, a copy of which was posted on its website yesterday, gave the institutions up to July 31, 2017, to enrol their customers.

It also directed that they conspicuously display notices sensitising customers on BVN in their banking halls, warning that “effective August 1, 2017, all customers without BVN linked to their account shall not be allowed to make withdrawals from their accounts.”
The circular pointed out that the absence of a unique identification in the Nigerian banking industry was a major challenge that inhibited the effectiveness of the Know-Your-Customers (KYC) principles. This, according to the CBN, was one of the reasons that led to the introduction of the BVN.

“The implementation of the BVN initiative, which started with the customers of deposit money banks, has been very successful. However, to avoid a broken identification link in the banking system, it has become neccesary to extend the BVN enrollment to the customers of OFIs, especially as some OFIs are located in the rural areas of the country and gave customers that may not have enrolled with the deposit money banks,” it stated.
The CBN further explained that the BVN enrollment would support the zero default credit target set for participating financial institutions in its micro, small and medium enterprises development fund.