Business

CBN in talks with MTN over $8.1bn repatriated funds

 

Retains MPR at 14%

The Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele, has said that the apex bank is in talks with telecom giant, MTN and four banks ordered to refund $8.1 billion repatriated out of the country without the consent of the CBN.

The Governor made this known on Tuesday, while fielding questions from newsmen during the media briefing on the outcome of the two day meeting of the Monetary Policy Committee MPC.

Emefiele who threw light on the processes that led to the sanction on MTN and the banks said the telecom company did not provide documents to defend their actions when they were requested to do so.

“On MTN, first of all, it’s important for us to know that the $8.1 billion is dollar equivalent of MTN naira generated from their profit. So I will neither call it a fine nor a penalty. What Central Bank Nigeria saw by asking MTN to return that money is that we want the reversal of that transaction because it was not finally authorized by the Central Bank of Nigeria. That was what we sought to do.

“And because those funds moved through these four banks, the quantum of dollar that passed through the banks that was what we said the banks needed to remit back or the company needed to remit back to CBN through the banks. It did not mean that these were the banks’ obligation.

[penci_blockquote style=”style-1″ align=”none” author=””]“That was the reason we released the investigation report to the banks and to the company. They have now responded, they have provided documents which I have sent down to the examiner to now begin to review. And I repeat, we’ll go through the pain, the gain to invite the banks and invite the company to prove their case, because it is just normal to allow this company and the banks to clear themselves. That is what we are doing, and I believe in due course we should make a final call on this subject”.[/penci_blockquote]

 

“We understand that there were some interpretations in some quarters that aside from the naira penalty, there was some conclusions that those dollars attributed to have been remitted by these banks on behalf of this company were indeed the liabilities of the bank. That was why we provided a clarification to the banks when they called us that that liability was indeed that of MTN and not theirs. And that Central Bank was not in any position in anyway going to debit the banks for the dollars because it was not their liability,” Emefiele explained.

He continued; “It is important to know that this was an investigation that started over two years ago. There were a number of issues, about two of the issues we decided to allow a dispensation to say let it go. But on this last one we said that the amount was large and there was a need for us to subject this to further investigations and discussions.

“Yes and I feel vindicated that in the history of the banking industry, I gave a chance where the regulator, the governor sitting in the meeting, the deputy governor, Banking Supervision with over 20 examiners sitting in the hall with the company and the bank, asking them to resolve the issues because we admit that MTN is a systemically important telecom company in Nigeria and after that meeting that we held on May 25, 2018, the discussion was inconclusive.

“We gave the company and the banks one week which was meant to be end of May, it was not done. But also realizing the importance of this company so that we don’t jolt the system, we gave extra almost two months for them to conclude and provide relevant documentation to the examiners so that they can knock those items out of their outstanding items. Unfortunately, this didn’t happen and we felt that we couldn’t wait indefinitely.

“That was the reason we released the investigation report to the banks and to the company. They have now responded, they have provided documents which I have sent down to the examiner to now begin to review. And I repeat, we’ll go through the pain, the gain to invite the banks and invite the company to prove their case, because it is just normal to allow this company and the banks to clear themselves. That is what we are doing, and I believe in due course we should make a final call on this subject”.

 

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Meanwhile, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria voted to retain the Monetary Policy Rate (MPR) at 14 percent at its meeting.

Mr. Emefiele who announced the decision, said the committee also voted to retain all other parameters such as the Cash rediscount Rate (CRR) at 22.5 percent, Liquidity Ratio at 30 percent and also the Asymmetric Corridor at +200 and -500 basis points around the monetary policy rate.

“In consideration of the challenges weighing down the domestic economy and the uncertainties in the global environment, the Committee decided by votes of 7 members against 3 in attendance to retain the MPR at 14.0 per cent alongside all other policy parameters” he said.

Mr. Emefiele further said that “against the backdrop of the rather unclear outlook around key economic activities (food production especially) and some optimism about current deceleration in inflation as well as relative stability in the naira exchange rate, the MPC was reluctant to alter the current policy configuration in any fundamental manner”.

He said the development was deliberately made to allow the existing policies to fully achieve their intended goals and objectives.

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