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Morning Briefing

Morning Briefing

The first chinks have appeared in Nigeria's Treasury Single Account (TSA) policy after the Office of the Accountant-General of the Federation exempted 13 Ministries, Departments and Agencies (MDAs) from having to adopt it — describing the MDAs as profit-orientated government business entities that pay dividends to the federal government.

The TSA came into force last week in a bid to root out corruption in government departments. It requires that all government agencies conduct their banking through one account held at the central bank, and analysts fear that it could take up to 10 percent of deposits out of the banking sector.

The exempted MDAs are: Nigeria National Petroleum Corporation, Power Holding Company of Nigeria, Bank of Industry, Nigeria Railway Corporation, Federal Mortgage Bank of Nigeria, Bank of Agriculture, Niger Delta Power Holding Company /National Integrated Power Project, National Communication Satellite Limited, Galaxy Backbone Ltd, Ajaokuta Steel Company Ltd, Urban Development Bank, Nigerian Export-Import Bank and Transcorp Hilton Hotel.

As part of India's financial inclusion scheme, Jan Dhan Yojana, 123,308 business correspondent agents (BCAs) have been deployed to provide banking services in remote locations. The BCAs offer online and real-time services and they conducted 12 million transactions in the week ended 9 September.

Banks monitor the performance of the BCAs through video conferences.

Australia could be on the verge of creating an entirely new demographic of the unbanked after the country's biggest banks sent letters to Australian bitcoin exchanges informing them that their accounts will be closed, according to the Australian Financial Review.

At least 17 bitcoin companies have received such letters, with 13 already having their accounts closed.

Ron Tucker, chairman of the Australian Digital Currency Commerce Association, told the Financial Review that all large Australian banks were involved in shutting the door on bitcoin companies. "It is widely recognised that the banking sector could stand to be disrupted, as indicated in comments from Westpac's CEO two weeks ago. Companies in this industry are in the business of offering and developing cost-effective financial services for consumers and businesses," Mr Tucker said. "However, should bitcoin companies be shut out of the Australian marketplace because of de-banking actions, this question will forever remain a hypothetical."

In the US, all eyes will be on the Bank of America shareholders meeting today which will decide whether chairman and CEO Bryan Moynihan can keep his dual role, but the industry has wider concerns as activist group Anonymous has launched a "Black October" campaign against the US banking system.

In a statement on the Anonymous website, the group called on ordinary people to demonstrate their strength and independence from wealthy banks by using cash instead of debit and credit cards for a month. "Show the big bankers that we don't need their debit cards, we don't need their credit cards, we don't need their loans and we don't need them," Anonymous said. "Let's show them that we are the 99 percent and we can beat them. It is that easy."

Also in the US, regulators have revealed that GE Capital's plan to exit financial services will have to be fully executed before it can be removed from the list of systemically important financial institutions.

And subprime mortgage originations continued to climb steadily over the first five months of 2015, according to data from the latest Equifax National Consumer Credit Trends Report.

Significant increases in subprime mortgage originations were recorded in each category — first mortgages, home equity instalment (HE) loans and home equity lines of credit (HELOC) — over the same period a year ago. However, subprime originations are still just a small fraction of total originations across the mortgage lending industry.

In Italy, Banca Popolare di Vicenza has revealed that UniCredit is to guarantee its planned capital increase of up to 1.5 billion euros.

Banca Popolare di Vicenza is looking to raise money from investors in a share sale early in 2016 after a balance-sheet clean-up left it with a large first-half net loss. The capital increase, along with a planned listing on Milan's stock exchange, is expected to be carried out by April.

Finally, the governor of Moldova's central bank, Dorin Dragutanu, resigned yesterday, following weeks of protests over the disappearance of $1.5 billion from three Moldovan banks.

Stepping down, Mr Dragutanu accused politicians of interfering in the bank's internal affairs and trying to discredit it.

Thousands of people began a protest in Chisinau on 6 September, calling for an investigation into the missing money — which disappeared before a parliamentary election last November. Two banks owned by Moldovan and Russian investors and a state-owned bank were put under the administration of the central bank and are to be liquidated by October.

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