CBN News Update On Naira Notes Today Sunday 9th April 2023

Rising Competition and Tight Monetary Policy Drive Nigerian Banks to Pursue Cross-Border Expansion and Holdco Structures

The Central Bank of Nigeria (CBN) is planning to introduce a regulation that will make it harder for financial institutions to convert to a holding structure, as more banks are showing interest in operating a holding company structure.

Currently, eight commercial banks are either fully operating a holding structure or finalising their holding company structure. However, the CBN is not comfortable with the increasing number of banks applying for the structure, and the regulation aims to provide clarity on the requirements for changing operating licences for banks and Other Financial Institutions (OFIs).

The draft guidelines state that eligible financial institutions are not permitted to expand or reduce their current banking network or engage in any banking activity specific to the proposed new licence during the conversion process, except in line with the bank’s conversion strategy submitted to the CBN.

Naira crisis: Cash circulation low, NLC tells CBN

The Central Bank of Nigeria has been given a two-week ultimatum by the organized labour to provide adequate cash, failing which its offices will be picketed, as per a warning issued by the labour. Adewale Adeyanju, Vice–President of the Nigeria Labour Congress, said that the congress is keeping an eye on the cash supply to commercial banks by the CBN and that the current cash flow is not meeting expectations.

However, he also acknowledged that the situation has improved compared to the past few weeks. The scarcity of naira notes has exacerbated the country‘s hardship, and a few weeks ago, the NLC announced its intention to picket CBN state offices nationwide.