The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mallam Mele Kyari, and the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, have reviewed the decision of the NNPCL to domicile a significant portion of its revenues and other banking services with the CBN.
This was dosclosed in a joint statement by the Company (NNPC Ltd) and the Central Bank of Nigeria (CBN) on Banking Relationship
The CBN Governor paid a courtesy visit to the GCEO at the NNPCL Towers today.
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Following their meeting in Abuja, the NNPCL and CBN Chiefs noted the value created by the decision for all parties, especially in providing the NNPCL with an improved platform for managing its cash holding obligor limits in commercial banks set by the Board of Directors.
The CBN has provided enhanced digital platforms for all transactions and has established specific limits to manage NNPCL transactions.
Both parties have also committed to further strengthening the collaboration to ensure seamless operations of the commercial NNPC limited and noted that NNPCL continues to have banking transactions with commercial banks as required.
THE WHISTLER had reported that it was the National Oil Company that actually offered to move its account to the apex bank to support the liquidity management objective of the CBN contrary to media reports
Sources with knowledge of the arrangement had told THE WHISTLER that the move was necessitated by the decision of the management of the NNPC Limited to assist the apex bank with the issues of boosting liquidity in naira and dollar component.
In recent months, the CBN had been battling with how to stabilize the value of the naira in the foreign exchange market.
In a bid to assist the apex bank meets its obligations, sources confided in THE WHISTLER that the NNPCL offered to move some of its accounts domiciled in commercial banks to the CBN.
The source said that since the implementation of the Petroluem Industry Act of 2021, the NNPCL in line with its limited liability company status, has its accounts with commercial banks.
He added that the NNPC Limited was not under any obligation to domicile its accounts with the Central Bank, adding that the latest move is just an assistance from the National Oil Company to assist in boosting foreign exchange inflows and liquidity for fhe nation.
He said the offer by the NNPCL to assist the CBN with the account opening was made last Monday during a meeting held at the headquarters of the Ministry of Finance which was attended by officials of the NNPCL, CBN, Office of Accountant General of the Federation and the finance ministry.
The source said, “Some parts of the NNPC accounts were moved to the CBN. The movement was not an obligation, it was just a part of NNPC’S effort to boost liquidity in naira and dollar components.
The meeting where this decision was taken was held at the Ministry of Finance between officials of CBN, NNPC, and Ministry of Finance.
“Before the implementation of the Petroluem Industry Act 2021, the NNPC maintained its accounts with CBN. But after the signing of the PIA into law, which eventually turned the NNPC into a limited liabilitily company, the NNPC now has the freedom to have its accounts with commercial banks.
“However, with the liquidity challenges facing the country, the NNPC felt there were needs to assist the CBN in boosting liquidity by domiciling some of its accounts with the apex bank
“This was what necessitated the latest move by the NNPC to open this account.”
The move is expected to improve the inflow of foreign exchange into the CBN vault and boost the value of the naira in the exchange rate market.