CBN threatens to sanction banks without Forex sales point

The Central Bank of Nigeria (CBN) on Monday threatened to sanction any Deposit Money Bank (DMB) in breach of its earlier instructions to open teller points for retail foreign exchange (Forex) transactions in all locations.

The apex bank’s acting Director, Corporate Communications, Mr Isaac Okorafor, in a statement on Monday in Abuja, said the bank would also penalise banks which failed to install electronic display boards in all their branches, showing rates of all trading currencies.

The CBN, in March, had directed banks and authorised dealers to open a teller point for retail foreign exchange transactions, like Personal and Business Travel Allowances, including buying and selling, in all locations, to ensure access to foreign exchange by their customers and other users without any hindrance.

The circular warned that the CBN would mete out stiff regulatory sanctions to banks that failed to comply fully with the directive by October 13.

The March 2017 circular also directed DMBs to have electronic display boards in all their branches, showing rates of all trading currencies, which it urged customers to insist on the displayed price for processing of their foreign exchange transactions.

It noted that the objective was to create awareness among members of the public regarding the availability of such facilities in branches of the banks at clearly disclosed prices, so that customers would not be cheated.

Okorafor said that the CBN was giving erring banks a four-week period, expiring on October 13, to fully comply with its directives or face regulatory sanctions, which would include but not limited to being barred from all future CBN foreign exchange interventions.

Meanwhile, giving a breakdown of the Bank’s latest Forex injection, Okorafor said that to sustain its intervention in the various sectors of the inter-bank Foreign Exchange market, 545 million dollars was on Monday injected into the market.

“The retail Secondary Market Intervention Sales (SMIS) received the largest intervention of 285 million dollars.

“Other components of the released figures include the 100 million dollars offered for wholesale SMIS, 90 million dollars for Small and Medium Enterprises (SMEs) window and 70 million dollars for invisibles such as Basic Travel Allowances, tuition fees and medical payments,” he said.

Okorafor said the amount released underscored the CBN’s avowed commitment to ensure a liquid interbank foreign exchange market, where all genuine requests would be met in line with extant Forex guidelines.

ALSO READ:CBN launches entrepreneurial scheme for corps members

The CBN spokesperson expressed optimism that with the accretion to the nation’s foreign reserve to 33 billion dollars, the Bank would continue to fulfil its mandate of safeguarding the international value of the nation’s legal tender.

He further disclosed that the Bank’s management also remained optimistic about achieving a convergence between the Forex rates at both the inter-bank and BDC segments.