Fakoyejo OlalekanThe minimum bid for non-interest asset-backed securities has been raised to N100 million by the Central Bank of Nigeria (CBN), a circular signed by the apex bank’s Director, Financial Markets Department, Angela Sere-Ejembi, disclosed.
In the circular issued in 2022, titled “Framework for the operation of the Central Bank of Nigeria non-interest asset backed securities”, the financial regulator increased the bid from N1 million to N100 million.
Join our WhatsApp ChannelAsset-backed securities are loans, leases, or credit card loans issued to generate cash or income by companies, and also an investment instrument used to enhance financial inclusion in Africa’s largest economy.
Participation in the auction involves only the commercial banks offering non-interest banking service, as well as non-interest banks licenced by the Nigerian financial regulator.
The upward review of the bid value by the central bank, led by Godwin Emefiele, is an update to the December 2021 guidelines for the Operation of Non-Interest Financial Institutions’ Instruments.
In the circular, CBN stated, “Further to the Guidelines for the Operation of Non-Interest Financial Institutions’ Instruments by the Central Bank of Nigeria, released in December 2012 the Central Bank of Nigeria (or the Bank) notes the positive developments in the financial markets environment and the need to strengthen the policy arena.”
It added that, “Consequently, the Bank hereby releases the Framework for the Operationalisation of the Central Bank of Nigeria Non-Interest Asset Backed Securities. Thus, non-interest banks and other authorized dealers in the non-interest banking window at the CB are required to note for guidance accordingly.
“Bids shall be sent in the bidder’s name via appropriate media as announced in the auction notice. The minimum bid amount shall be N100,000,000 and integral multiples of N1,000,000 in excess thereof, subject to periodic review by the Bank from time to time,” the CBN stated.
Follow Us