Most of the money is in domiciliary accounts, which are used for speculative trading or for storing wealth of the account holders.
Mr Godwin Emefiele, the governor of CBN noted that the situation has triggered panic mode for these banks.
He further disclosed during an interview with Businessday Nigeria that banks would have to fashion a way out since the situation had been self inflicted.
“Nigerian banks today are awash in dollar cash they cannot bring to the Central Bank because if the banks bring it to us, what is the Central Bank is going to do with the cash?”
“Today, there is a large volume of foreign currency sitting in the vaults of the banks and the banks cannot handle it because of it useless to them,” the governor said.
The introduction of the domiciliary account option by the CBN was to ease access to foreign exchange for small businesses. In contrast, many High net worth individuals (HNWIs) rather used it as a means to store their wealth in either Dollars, Pound, Euro or Yuan.
Just like earlier initiatives of the apex bank such as M, A1, A2 e.t.c., many bankers and Nigerians have taken advantage of the policy for personal gain. Thus, triggering instability in the foreign exchange market of the country.