The Central Bank of Nigeria (CBN) has given a four-week ultimatum to deposit money banks which have not complied with its directive to open teller points for retail forex transactions.
In a statement sent to TheCable on Monday, the apex bank said banks that fail to comply within four weeks would be punished.
According to the statement which was signed by Ahmad Abdullahi, director, banking supervision, erring banks would be barred from all future CBN foreign exchange interventions.
“In March 2017, the CBN directed banks and authorised dealers to open a teller point for retail FX transactions (PTA/BTA and SME) including buying and selling, in all locations in order to ensure access to foreign exchange by their customers and other users, without any hindrance,” the statement read.
“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 in processing their foreign exchange transactions for Invisibles and the SMEs window.
“Accordingly, the CBN has given the erring banks a four-week period, expiring on October 13, 2017, to fully comply with its directives or face regulatory sanctions, which it noted include but not limited to being barred from all future CBN foreign exchange interventions.”
Giving a breakdown of the bank’s latest forex injection, Isaac Okorafor, its acting director, corporate communications, said the retail secondary market intervention sales (SMIS) received the largest intervention of $285 million.
“Other components of the released figures include the $100 million offered for wholesale SMIS, $90 million for small and medium enterprises (SMEs) window and $70 million for invisibles such as basic travel allowances, tuition fees and medical payments.”
Okorafor said the continued release of funds show CBN’s commitment to ensure “a liquid interbank foreign exchange market, where all genuine requests will be met in line with extant forex guidelines”.
He also said the CBN “remained optimistic about achieving a convergence between the forex rates at both the inter-bank and BDC segments”.
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Why four weeks? CBN is carrying on like a toothless bulldog that cannot sanction erring banks. This directive was given to all banks for immediate implementation since March 2017. It is unfair on banks that have complied since then. Many of the banks that are yet to comply with the directive have formed some kind of unholy and illegal bond with “street dollar hawkers” and are selling to hapless members of the public who genuinely need forex at exorbitant rates of between 368 and 370 Naira to one dollar. These erring banks turn their customers down whenever they demand to buy at CBN rate, but instead direct them to the “malams” who are always lurking the the banks premises. In fact, the only thing these erring banks are yet to do is create a corner and provide cubicles for the hawkers in the banking halls. It’s time the CBN woke up to its responsibilies.