Commercial banks – Nioga http://nioga.net/ Tue, 02 Aug 2022 00:44:59 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://nioga.net/wp-content/uploads/2021/10/icon-120x120.jpg Commercial banks – Nioga http://nioga.net/ 32 32 It’s time to find real alternatives to commercial banks https://nioga.net/its-time-to-find-real-alternatives-to-commercial-banks/ Fri, 29 Jul 2022 15:00:41 +0000 https://nioga.net/its-time-to-find-real-alternatives-to-commercial-banks/ Published: Fri 29 Jul 2022, 4:00 PM Editorial Commentary AIB’s controversial decision to make 70 banks cashless and the subsequent reversal has raised a host of issues of significant public interest. First, it is clear that the seemingly relentless decision by banks to leave behind customers who do not use digital banking or who have […]]]>


Editorial Commentary

AIB’s controversial decision to make 70 banks cashless and the subsequent reversal has raised a host of issues of significant public interest.

First, it is clear that the seemingly relentless decision by banks to leave behind customers who do not use digital banking or who have business or personal needs to trade in cash and coins shows no signs of letting up.

Although AIB reversed its plans, it was a significant insight into the prevailing attitudes of anchor banks towards a large cohort of its customers.

Of course, the matter is complicated by the fact that the government owns a 63% stake in AIB.

That the major shareholder was not consulted on such a decision is astounding, although it now appears Finance Ministry officials were aware four days before the initial AIB announcement but did not advise. the ministers concerned.

The fact that AIB has been bailed out of its own mess by the taxpayers of this country means that there is understandable anger when the bank acts in a way that is seen as contrary to the public interest. However, the bread eaten is quickly forgotten.

The question also underscored the importance of the credit union movement to people once again. Many credit unions are expanding their banking services. They are community-based and managed and offer a clear alternative to the purely lucrative antics of commercial banks.

AIB had offered to expand and strengthen its partnership with the post office network to enable people to continue depositing and withdrawing money from their AIB accounts at post offices.

This element of the controversy has been somewhat glossed over and it is important to note that the postal network can be part of any new banking model.

The concept of public or community banks has also been raised by some commentators and groups. These work very successfully in parts of Germany, among others, and are a key part of Green Party banking policy.

This would involve a locally oriented bank with a public mandate to serve the community in its region by providing financial services and other modern banking services.

The major banks are apparently determined to make themselves increasingly useless. We should take the hint and work to provide real alternatives to commercial banks.

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The role of commercial banks in the economy https://nioga.net/the-role-of-commercial-banks-in-the-economy/ Tue, 26 Jul 2022 14:00:16 +0000 https://nioga.net/the-role-of-commercial-banks-in-the-economy/ Many people share a reasonably basic view of banks. They are places to buy money, make primary investments like term deposits, sign up for a credit card, or get a mortgage. Behind this mundane view, however, lies a highly regulated system that reconnects our day-to-day banking operations to the larger monetary system. Learn more about […]]]>

Many people share a reasonably basic view of banks. They are places to buy money, make primary investments like term deposits, sign up for a credit card, or get a mortgage. Behind this mundane view, however, lies a highly regulated system that reconnects our day-to-day banking operations to the larger monetary system. Learn more about merchant banks, how they are created and what is their main function within the general financial system.

Key points to remember

  • Banking is a highly regulated system that again links our day-to-day banking activities to the larger monetary system.
  • There are millions of merchant banks in the United States alone.
  • Until the late 1990s, corporate banks helped companies acquire stock, and merchant banks were primarily involved in deposits and loans, due to the Glass-Steagall Act.
  • From the late 1990s, the power to implement Glass-Steagall eroded and the law was successfully repealed.

When is a financial institution an industrial financial institution?

Between 1933 and 1999, it was quite simple to inform side banks, thanks to the Glass-Steagall Act. If you were helping companies worry about stocks, you were a funding financial institution. If you were primarily involved in deposits and loans, then you were a commercial bank. From the late 1990s, however, the power to implement Glass-Steagall as a black-and-white rule eroded, and the law was successfully repealed.

Since then, the previous distinction between a corporate financial institution and a financing financial institution has become practically meaningless. For example, as of 2013, JPMorgan Chase Financial bank is among the largest merchant banks in the United States by assets; in 2012, the same bank was a lead underwriter in Facebook’s preliminary public offering (IPO).

Industrial banks present a variety of monetary companies to people and businesses to enable them to perform easy monetary tasks.

For better or for worse, we have lost issuing securities and actively investing in securities as defining actions that a commercial bank cannot take. Instead, we can look at stocks that all merchant banks share.

Industrial banks

  • Pay deposits
  • Lend money
  • Fund prices
  • Difficulty of drafts and checks from financial institution
  • Provide security deposit containers for gadgets and documents

There are additional actions, of course, and finer classes within this broad view. Industrial banks can provide different businesses such as negotiation of insurance contracts, financing recommendation, etc. Also, they offer all kinds of loans and provide different credit cars like playing cards and overdrafts. Nonetheless, the recurring theme among these actions is that they aim to provide a monetary service to a person or business.

From scratch to operational in two years or less

To understand business banking, it pays to look at how they are set up. Although huge banks like JPMorgan Chase, Wells Fargo, and Citibank are well known and global in scope, there are millions of merchant banks in the United States alone.

Regardless of the seemingly massive amount, starting and operating a commercial bank is a lengthy process due to regulatory steps and capital requirements. Guidelines vary from state to state, but in the United States, an organizing group begins the process by securing a number of millions of dollars in seed capital. This capital brings together an administrative workforce with expertise in the banking sector in addition to a board of directors.

Create the imaginative and premonitory

Once the board and administration are defined, a location is chosen and the overall imagination and vision of the financial institution is created. The organizing group then sends its plan, along with information about the board and administration, to regulators who evaluate it and determine whether the financial institution will be granted an incorporation. The evaluation costs thousands of dollars and the plan can also be returned with suggestions that must be sent for approval.

Path to operationalization

If incorporation is granted, the financial institution should be operational within 12 months. Over the next 12 months, organizers are expected to pay for their FDIC insurance, protect their employees, purchase equipment, and more, as well as undergo two additional regulatory inspections before the doors open.

Hourly

This timeline on the full process may vary, but with preparation before first submission to regulators, it is measured in years, not months. To get to the stage where a bank can generate profits by leveraging the {dollars} deposited in the form of customer loans, there must be hundreds of thousands of capital, some of which will be raised in private circles and repaid by means of a possible public action providing.

In theory, an incorporation bank will be 100% privately funded, but most banks go public as the shares become liquid, making it easier for buyers to pay. Therefore, having an IPO under the genuine plan makes it easier to attract buyers at an early stage.

Industrial Banks and the Big Picture

The way in which a corporate financial institution is launched prefigures the general position that these banks play within the financial system. A corporate financial institution is primarily a group of financing capital looking for a very good return. The financial institution – the building, the people, the processes and the businesses – is a mechanism for attracting additional capital and allocating it in a way that the administration and board believe will provide the better performance. By allocating capital efficiently, the financial institution will be more profitable and the stock value will improve.

From this point of view, a financial institution offers a service to the patron mentioned above. But it also provides a service to buyers by acting as a filter to determine who will receive how much capital. Banks that do both jobs will continue to be successful. Banks that don’t do either of these jobs could ultimately fail. If that fails, the FDIC steps in, protects depositors, and ensures that the bank’s assets end up in the hands of a more profitable bank.

How is my main street financial institution totally different from an industrial financial institution?

The financial institution you use is almost in fact a commercial financial institution. While yours may also be more nationally owned and operated than a national bank like Citibank or Wells Fargo, it is still a commercial bank that offers deposit accounts, savings accounts, and cash. other products, and uses the money you deposit in spending money on stocks, securities, etc.

Why are industrial financial institution deposits insured by the FDIC?

Not so long ago, deposits in banks were not FDIC insured. This meant that if a bank collapsed as many did during the Melancholy of Nice, people who had saved their savings in that bank lost everything. Now that deposits are insured, even when the financial institution you use goes down, your money is protected. FDIC-insured deposits cover up to $250,000 per depositor, per insured financial institution, for each category of account ownership.

What would happen without industrial banks?

In a nutshell, if investment banks suddenly disappeared, the financial system would collapse. Bank cards and debit playing cards would stop working, automated funds between individuals and businesses would cease, businesses would lose funding capital, and the world as we know it might come to a standstill.

The back line

Most of us work with merchant banks every day, whether it’s a debit card purchase, internet cost, or mortgage. Previously offering these main businesses, merchant banks are part of the business of allocating capital for income, also known as investment. In merchant banking’s definition of investment, it involves making loans and increasing credit to people who will repay it on the terms of the financial institution.

At present, merchant banks can spend money on securities and even points that they help publicize. However, these actions are often relegated to a funding arm, primarily a standard funding financial institution housed within a commercial financial institution. Ultimately, a commercial financial institution wants to provide good service to its customers and good returns to its buyers in order to be successful.

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Commercial banks urged for long-term financing of manufacturing sector https://nioga.net/commercial-banks-urged-for-long-term-financing-of-manufacturing-sector/ Tue, 26 Jul 2022 05:14:38 +0000 https://nioga.net/commercial-banks-urged-for-long-term-financing-of-manufacturing-sector/ Commercial banks should consider providing long-term financing to manufacturing and SMEs if the latter want to recover from the effects of the Covid-19 pandemic. This was during the annual bankers conference which kicked off in Kampala on Monday, July 25, 2022. Several panelists said that in the wake of the pandemic, banks have avoided financing […]]]>

Commercial banks should consider providing long-term financing to manufacturing and SMEs if the latter want to recover from the effects of the Covid-19 pandemic.

This was during the annual bankers conference which kicked off in Kampala on Monday, July 25, 2022.

Several panelists said that in the wake of the pandemic, banks have avoided financing manufacturers as well as SMEs due to the risks involved.

Anthony Kituuka, Chief Executive of Equity Bank, said “as bankers, we need to understand the challenges facing these sectors (manufacturing, tourism and agribusiness) and define something that can be executed to their advantage.”

“We have launched a bold plan, the “African Recovery and Resilience Plan”. One of the pillars of the plan will be food and agriculture to enable coordinated, connected and capable supply chains and mechanization to scale up production,” he said.

Former PwC Uganda Senior Partner Mr. Francis Kamulegeya said banks need to rethink asking for collateral as credit collateral.

“Some SMEs have huge contracts worth millions of dollars without the standard guarantees required by banks. This is an opportunity for banks to lend as they support SMEs,” Mr. Kamulegeya said.

“Many, many years ago we came here to talk about asset-based financing and leasing, and I’m glad that today most of the bankers here have implemented that, but I want them to embrace a new concept today which is value chain finance,” he added.

“value chain finance” (VCF) refers to the use of a value chain and how it supports participants by tailoring services and products at one or more points in the value chain to reduce the risk and cost of financing, and increase the efficiency of the value chain as a whole.

Mr. Kamulegeya said that according to the Bank of Uganda report, loans and finance given to agribusiness normally go to manufacturing, but the country has a larger production value chain.

“I love people like aBi Development Finance who have gone the extra mile to understand the agribusiness value chain and I implore other financial institutions to follow their lead,” he implored.

SME

Daniel Birungi, executive director of the Uganda Manufacturers Association (UMA), said banks hold the key to manufacturers’ recovery.

“Walk with us to support the growth and recovery of SMEs. We are moving into new markets such as DR Congo, we would like to see more of our banking footprint move to these markets. There are opportunities for entry,” he said.

“We want to come down as bankers and get our hands dirty preparing people who come to borrow because it’s a win-win situation, once the SMEs win, the banks also win,” Birungi added.

Mrs. Géraldine Ssali, Permanent Secretary at the Ministry of Commerce and Industry, also urged banks to remove bureaucracies involved in access to credit.

“The bureaucracy for funding applications is just too much, so please bankers, share the services on, say, a phone so we can eliminate all the paperwork…” she said. declared.

Ms. Ssali also called for import substitution.

“If we can get the top 10/15 products that we import and replace imports with our own raw materials with the help of significant funding from the manufacturing sector, the economy will definitely recover on its own,” he said. she added.

Mr. Moses Kaggwa of the Ministry of Finance acknowledged that the current funds provided by the government through the Uganda Development Bank (UDB) are not sufficient for all manufacturers.

“There is also a mismatch between available credit and the needs of the manufacturing sector. As a government, we have tried to put more money into the UDB but the demand is outstripping the supply,” Mr Kaggwa said.

“We have a plan to reduce government borrowing. When we look at the money borrowed here and abroad, it’s not bad and it affects our interest rates. Banks have 4 trillion shillings tied up in unresolved disputes – this also affects interest rates,” he added.

He said this reduction in borrowing and the resolution of banking disputes could lower interest rates, which could allow for better and affordable rates in the market.

For her part, Mrs. Winnie Lawoko Olwe, Director of National Investment at the Uganda Investment Authority, urged banks to help profile SMEs.

“Can bankers provide a portal for rating these SMEs to help us understand what stage a particular SME is at. There is enough information that can give us traceability and fair judgment,” she said.

“One of the key issues we need to look at is formalization to help SMEs that have the potential to formalize to be able to access funds and support to grow and thrive,” she added. .

Bank of Uganda Deputy Governor Dr. Michael Atingi-Ego said the banking sector can play its part in the economic recovery as it remained strong and resilient after entering the pandemic with capital reserves and sufficient liquidity.

“Uncertainty caused by the current economic situation has deterred banks from financing businesses due to possible risks…” he said.

“The Bank of Uganda’s most important contribution to supporting economic recovery is to foster price stability. Therefore, within our mandate, the BOU is ready to do whatever it takes to control inflation,” he added.

The President of the Uganda Bankers Association, Ms. Sarah Arapta, said that this year’s Annual Bankers Conference will aim to facilitate a focused discussion between financial service providers and stakeholders in the manufacturing, tourism/hospitality sectors. and agribusiness on efforts to revive the economy.

The conference continues on Tuesday.

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7 African countries with the most commercial banks https://nioga.net/7-african-countries-with-the-most-commercial-banks/ Mon, 25 Jul 2022 16:45:45 +0000 https://nioga.net/7-african-countries-with-the-most-commercial-banks/ Of all these different types of banks, commercial banks seem to be the ones that are always at the center of all banking discussions. And that’s because of the crucial role they play in every economy. For example, they help create capital, provide credit facilities and maintain liquidity in every economy. What is a commercial […]]]>

Of all these different types of banks, commercial banks seem to be the ones that are always at the center of all banking discussions. And that’s because of the crucial role they play in every economy. For example, they help create capital, provide credit facilities and maintain liquidity in every economy.

What is a commercial bank?

According to Bankrate LLC, a New York-based financial services company, “A commercial bank is a for-profit financial institution that accepts deposits, offers loans, and provides other financial services to its customers.”

Commercial banks are the main types of banks in the world, whether in terms of number/availability, size of assets and profitability. In Asia, there are at least 1,900 commercial banks. In the United States alone, there are over 4,000 commercial banks. And Europe has more than 6,000 such banks, according to Statista.

Commercial banks in Africa

On the other hand, Africa has a total of 763 commercial banks. And some countries have more banks than others, as expected. Soon, we will focus on those countries that have the highest number of commercial banks.

Now, it is important to point out that having a wide range of commercial banks does not always translate to stronger or better banking systems. To put this into context, Tanzania has more commercial banks than South Africa. But South African banks are more valuable (in terms of asset size) than Tanzanian banks.

Below are seven African countries with the most commercial banks. We have compiled this list using information gleaned from sources such as African Central Banks, Statista, etc.

  1. Kenya: has 39 commercial banks according to Statista
  2. Egypt: has 37 commercial banks, according to the Central Bank of Egypt
  3. Tanzania: has 34 commercial banks, according to the Bank of Tanzania
  4. Nigeria: has 24 commercial banks, according to the Central Bank of Nigeria
  5. Uganda: has 24 commercial banks, according to the Bank of Uganda
  6. Ghana: has 23 commercial banks, according to the Bank of Ghana
  7. South Africa: Has 18 commercial banks, according to the Reserve Bank of South Africa.

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CBA Governor Meets with Commercial Bank Leaders https://nioga.net/cba-governor-meets-with-commercial-bank-leaders/ Fri, 22 Jul 2022 09:42:07 +0000 https://nioga.net/cba-governor-meets-with-commercial-bank-leaders/ BAKU, Azerbaijan, July 22. Governor of the Central Bank of Azerbaijan (CBA) Taleh Kazimov met with heads of commercial banks, Trend reports with reference to the CBA. The objective of the meeting was to discuss the results of the first half of 2022 in the country’s banking sector, the impact of recent macroeconomic trends on […]]]>

BAKU, Azerbaijan, July 22. Governor of the Central Bank of Azerbaijan (CBA) Taleh Kazimov met with heads of commercial banks, Trend reports with reference to the CBA.

The objective of the meeting was to discuss the results of the first half of 2022 in the country’s banking sector, the impact of recent macroeconomic trends on the country’s financial and banking sector, the increase in the role of the banking system in the economic development, etc

Macroeconomic and financial stability has been ensured in Azerbaijan thanks to ongoing reforms and development policy, Kazimov noted at the meeting.

Kazimov pointed out that the work on strengthening the leading role of the banking system in the development of financial inclusion in Azerbaijan, flexible adaptation to the latest global challenges of modern banking, achievement of new goals for sustainable support of the financial and banking sector in the development of the national economy and in other fields will be actively pursued in the future.

Leaders of commercial banks spoke about macroeconomic and financial stability in Azerbaijan, increasing financial inclusion, development of banking trends and sustainable development.

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Traders and industrialists demand appointment of SBP governor and regulatory action against commercial banks https://nioga.net/traders-and-industrialists-demand-appointment-of-sbp-governor-and-regulatory-action-against-commercial-banks/ Fri, 22 Jul 2022 01:00:00 +0000 https://nioga.net/traders-and-industrialists-demand-appointment-of-sbp-governor-and-regulatory-action-against-commercial-banks/ KARACHI: Industry and commerce leaders have called on the government to immediately appoint a central bank governor, draft an economy charter with the opposition and conduct a forensic audit of commercial banks to stop the fall of the rupee. They alleged that if the dollar rate is 227 rupees, commercial banks clear the documents at […]]]>

KARACHI: Industry and commerce leaders have called on the government to immediately appoint a central bank governor, draft an economy charter with the opposition and conduct a forensic audit of commercial banks to stop the fall of the rupee.

They alleged that if the dollar rate is 227 rupees, commercial banks clear the documents at the rate of 242 rupees, which should be regulated by the central bank. The SBP is expected to step in to curb the fall in the currency, as with the fall of the rupee, the government’s debt burden had increased by Rs9.7 trillion.

Otherwise, they warned that the deteriorating economy will lead to a national security crisis in the next 15 days.

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the leadership of the Karachi Chamber of Commerce and Industry held two separate press conferences on Thursday which were also joined by associations and industrialists from other cities.

FPCCI Chairman Irfan Iqbal Sheikh along with other bureau members at a press conference at Federation House demanded a forensic audit of commercial banks allegedly involved in currency speculation. This has led to the unrealistic depreciation of the rupee against the dollar, they claimed.

Federation leaders from Islamabad, Lahore, Peshawar and other offices joined the press conference via video link. They also held a meeting after the press conference.

Sheikh said importers were not receiving dollars and their letters of credit were not open. This would lead to an undesirable situation in the country, and the following 15 days were crucial for national economy and security.

He said that the economic and inflation problems had become a national security issue and that if the depreciation of the rupee was not stopped and urgently managed, a situation similar to that of Sri Lanka could develop in the world. country. “Due to uncertainty and inflation, gasoline would not be available, leading to public chaos.”

A thousand containers were stuck at the port and should be immediately allowed to proceed to their destination as a fee of $120 per day was being paid, Sheikh added.

FPCCI bureau members recommended the government to launch a foreign currency amnesty program that could bring about $8 billion into circulation, as Pakistanis held a large volume of foreign currency with them.

They said the rupiah’s depreciation was also the result of a lack of regulation by the State Bank of Pakistan, which was headed by an acting governor.

They asked the government to take into account the federation and the chambers when forming economic policies and committees.

The chairman of the FPCCI was asked to appoint the governor of the SBP within 48 hours, so that the regulator would deal with the currency speculation of commercial banks and set a dollar rate for a minimum of 15 to 30 days.

He also suggested forming an economic disaster management committee on the same model as the non-commissioned officer who managed the Covid-19 pandemic. “All political parties should sit on an economic charter within the next 72 hours,” he said.

Political stability was of utmost importance to achieve economic stability.

In a separate press conference, Businessmen Group (BMG) Chairman Zubair Motiwala and KCCI Chairman Muhammad Idrees also discussed the current political and economic scenario in the country.

They also expressed deep concern over the government’s unserious attitude to the rupee crisis, economic challenges, political uncertainty and unregulated bank profits.

Motiwala said industrialists were unsure whether to shut down industries or continue operations, while traders were unsure whether to keep goods or sell in the market. “Industries will not be able to operate with such a high and fluctuating cost of doing business because they are unable to determine the selling price and the cost of manufacturing their products under such a level of uncertainty” , he added.

Motiwala said that to reduce the import bill, the import of raw materials is stopped and they are scared how the industry will operate in the coming days.

He conceded that although the current political instability in the country has also weakened the currency, the economic indicators were not that bad.

He said they were also ready to mediate a dialogue on the economy between the government and the opposition.

He warned that if industry demands were not heeded, industries would close leading to loss of jobs; and that “would be dangerous.”

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Commercial banks stifle growth of CBDCs –CBN – The Sun Nigeria https://nioga.net/commercial-banks-stifle-growth-of-cbdcs-cbn-the-sun-nigeria/ Wed, 20 Jul 2022 23:34:38 +0000 https://nioga.net/commercial-banks-stifle-growth-of-cbdcs-cbn-the-sun-nigeria/ By Chinwendu Obienyi Month after launching the digital currency eNaira, the Central Bank of Nigeria (CBN) criticized commercial banks for its lack of adoption. This was even as the apex bank revealed that it was set to conclude trials with MTN Nigeria to provide a channel where the unbanked can onboard using the code *997##. […]]]>

By Chinwendu Obienyi

Month after launching the digital currency eNaira, the Central Bank of Nigeria (CBN) criticized commercial banks for its lack of adoption.

This was even as the apex bank revealed that it was set to conclude trials with MTN Nigeria to provide a channel where the unbanked can onboard using the code *997##.

Its Governor, Godwin Emefiele, said this while answering questions from reporters during the 286th meeting of the Monetary Policy Committee (MPC) held in Lagos on Tuesday. eNaira was launched to much fanfare in October 2021, becoming the first Central Bank Digital Currency (CBDC) on the African continent. However, the buzz around him has waned as surveys by Daily Sun last month indicated that only 756,000 people had created eNaira accounts out of the 55 million bank accounts operating in the country.

While stating that slow adoption by banks was the reason for the meager figure, Emefiele revealed that e-Naira is the product with the lowest cost in terms of electronic money transfer from one place to another.

“Nigeria is the second country in the world to have launched its digital currency CBDC called e-Naira and I can assure everyone that we are making tremendous progress there. But we will admit that there is a need for much more enlightenment for E-Naira and this will continue.

You can contact your bank, they may be a little reluctant towards you, because transferring their money from your account to your wallet is a disadvantage for banks. I want to say boldly and bluntly that it is a disadvantage for them,” he said.

Speaking further, the CBN Governor said, “So you should go and tell your bank that you want your e-Naira loaded on your wallet. It will cost you little or nothing compared to other products you have that will cost you money in the bank. Banks are apathetic because they know they are going to lose revenue and so you have to insist on using your wallet to transact.

Hence, as banks drag their feet on eNaira, Emefiele further disclosed that CBN is almost concluding trials with MTN Nigeria to provide a channel where unbanked people can onboard using the code * 997##.

According to him, “Once this is done, we will target the unbanked population and we will also use available agency banking arrangements and other means to ensure that we increase awareness of our eNaira product. Reacting, economic analysts said the CBN’s decision will allow people without bank accounts to operate USSD codes, which allow users without a smartphone or data/internet connection to use mobile banking, access eNaira with the aim of triggering a new wave of adoptions.

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Nigerian commercial banks are ‘insensitive’ to CBDCs, says Governo https://nioga.net/nigerian-commercial-banks-are-insensitive-to-cbdcs-says-governo/ Wed, 20 Jul 2022 07:54:00 +0000 https://nioga.net/nigerian-commercial-banks-are-insensitive-to-cbdcs-says-governo/ Nine months after the launch of digital currency eNaira, Nigeria’s central bank chief has criticized commercial banks for its lack of adoption. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN) told attendees of a monetary policy conference that eNaira adoption rates had fallen below expectations, according at Bloomberg. eNaira was launched to much […]]]>

Nine months after the launch of digital currency eNaira, Nigeria’s central bank chief has criticized commercial banks for its lack of adoption.

Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN) told attendees of a monetary policy conference that eNaira adoption rates had fallen below expectations, according at Bloomberg.

eNaira was launched to much fanfare last October, becoming the first central bank digital currency (CBDC) on the African continent. However, metrics around digital currency indicate that only 700,000 individuals have created eNaira accounts out of the 55 million bank accounts operating in the country.

Blame the commercial banks

Emefiele revealed that commercial banks were behind the slow adoption because there are no fees to use eNaira. eNaira deposits are not considered cash on the bank’s books, and their use contrasts with revenue from mobile banking.

Emefiele told conference attendees that “there is apathy” in banks and fintech companies due to the lack of revenue-generating opportunities. He urged citizens to embrace digital currencies as they will cost users “little or nothing compared to other products”.

Inside sources suggest that Nigerian lenders fear the promotion of eNaira by the CBN to the detriment of their operations. In its defense, the bank and the regulator said they were guided by the need to promote financial inclusion, reduce transaction costs for consumers and reach the unbanked population.

A trick up the sleeve to trigger adoption

As lenders dragged their feet on eNaira, the bank hatched a plan to work with the country’s largest telecom provider, MTN.

The move will allow people without a bank account to use USSD codes, which allow users without a smartphone or data/internet connection to use mobile banking, to access eNaira in a bid to spark a new wave of adoptions.

Emefiele said CBN is “nearly wrapping up testing” with the telecom provider and is closing in on a launch date. At the moment, eNaira is only available to users with commercial bank accounts.

Nigeria launched eNaira in October after partnering with Bitt Inc, a Barbados-based fintech company. Since then, CBN has created two mobile apps available on Apple and Android devices for in-vehicle customers.

Disclaimer

All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.

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Indira Gandhi nationalized 14 commercial banks on July 19, 1969. https://nioga.net/indira-gandhi-nationalized-14-commercial-banks-on-july-19-1969/ Tue, 19 Jul 2022 10:35:31 +0000 https://nioga.net/indira-gandhi-nationalized-14-commercial-banks-on-july-19-1969/ Some of these banks included Bank of Baroda, Allahabad Bank, Canara Bank, Central Bank of India and Punjab National Bank. Representative photo: iStock Fifty-three years ago on this day – July 19 – then Prime Minister Indira Gandhi announced the nationalization of 14 major commercial banks, which held 85% of the country’s bank deposits. Some […]]]>

Some of these banks included Bank of Baroda, Allahabad Bank, Canara Bank, Central Bank of India and Punjab National Bank.

Representative photo: iStock

Fifty-three years ago on this day – July 19 – then Prime Minister Indira Gandhi announced the nationalization of 14 major commercial banks, which held 85% of the country’s bank deposits.

Some of these banks included Bank of Baroda, Allahabad Bank, Canara Bank, Central Bank of India and Punjab National Bank.

Gandhi made the announcement in a speech to the nation at 8:30 p.m.

She said the decision was made after banks failed to help farmers, the agriculture line of credit and focusing on small industries and startups. The names were drawn on the basis of the share capital reserve. Bank with a capital of more than ₹50 crore were selected for nationalization.

The Banking Regulation Act 1949 was invoked to nationalize the banks.

Read also : The Center plans to reduce the number of nationalized banks from 12 to 4

Six other banks were nationalized in 1980.

The Reserve Bank of India was the first bank to be nationalized in 1949.

Government attributed nationalization and bank mergers to bank collapse At least 361 banks failed between 1947 and 1955.

Read also : SBI and other banks saw massive increase in NPAs in last fiscal year: Ministry of Finance

Furthermore, banks, while mostly privately owned when India gained independence, mostly favored big business and ignored farmers and the rural sector, leaving the latter at the mercy of rural land sharks. and lenders. Banks were nationalized with the promise of helping farmers and rural businesses.

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Say goodbye to the public sector! These 14 Indian commercial banks were nationalized today in 1969 https://nioga.net/say-goodbye-to-the-public-sector-these-14-indian-commercial-banks-were-nationalized-today-in-1969/ Tue, 19 Jul 2022 08:10:23 +0000 https://nioga.net/say-goodbye-to-the-public-sector-these-14-indian-commercial-banks-were-nationalized-today-in-1969/ On July 19, 1969, then Indian Prime Minister Indira Gandhi addressed the nation at 8:30 p.m. and announced the nationalization of 14 Indian commercial banks, which controlled over 85% of bank deposits in the country. The banks shortlisted for nationalization were Bank of India, Bank of Baroda, Central Bank of India, Canara Bank, Punjab National […]]]>

On July 19, 1969, then Indian Prime Minister Indira Gandhi addressed the nation at 8:30 p.m. and announced the nationalization of 14 Indian commercial banks, which controlled over 85% of bank deposits in the country. The banks shortlisted for nationalization were Bank of India, Bank of Baroda, Central Bank of India, Canara Bank, Punjab National Bank, United Bank of India and Allahabad Bank.

The argument made by the government during this infuriating step was that the banks were not serving the interests of farmers, the agricultural credit line, focusing on small industries and start-ups. The government pre-selected the banks on the basis of the social capital reserve. Banks with capital of 50 Cr or more in the account were selected for nationalization.

The decision of then Indira Gandhi is considered a masterstroke, although its economic benefits remain debatable. Along with Indira Gandhi, Principal Secretary PN Haksar, Economist PN Dhar and KN Raj backed the sweeping decision. CNBCTV18.

The head of the Finance Ministry’s banking division, through his biography ‘No Regrets’, says he rushed to work after receiving a phone call on July 17 at midnight from Haskar to be part of a team who writes the prescription in 24 hours. The rush to draft the order within 24 hours was done so that Acting President VV Giri could sign it a day before making the notification public.

Intervention of the Supreme Court

Many banks have been affected, dragging this decision to court. On February 10, 1970, the Supreme Court found the law passed to be “void” and “discriminatory” against these 14 banks and declared that the compensation paid to the banks was not fair.

The government then rushed to prepare a new ordinance which was published on 14 February and which was later replaced by the Banking Companies (Acquisition and Transfer of Businesses) Act 1970.

After the decision to make banks a unit of the public sector, Indira Gandhi may have become a villain for the banks involved, but in the aftermath it has cemented her as a champion of struggling farmers and entrepreneurs across India. The process of nationalizing banks continued throughout her tenure as in 1980 she nationalized six more commercial banks.

Also Read: Remembering Mangal Pandey, Hero of the First War of Independence Who Inspired the 1857 ‘Sepoy Mutiny’ Revolt

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