Deposit Money Banks, DMBs risk stiff sanctions from the Central Bank of Nigeria, CBN, if they fail to comply with the directive to open teller points for retail foreign exchange transactions, and electronic display boards in all their branches.
The apex bank reminded the banks of its earlier directive on March 3, just as it said it had injected a further $545 million in the foreign exchange, FX, market as part of its continued intervention in the various sectors of the inter-bank market.
All banks and authorised FX dealers were directed to open a teller point for retail FX transactions, including buying and selling funds for basic transport allowance, BTA, as well as small and medium enterprises, SME, in all locations.
The directive is to allow for easy access to foreign exchange by bank customers and other users.
The bank had also asked banks to install electronic display boards in all branches of the banks to ensure FX rates for all trading currencies were clearly displayed to avoid exploitation of customers.
The bank had also asked banks to install electronic display boards in all branches of the banks to ensure FX rates for all trading currencies were clearly displayed to avoid exploitation of customers.
Months after the directive, the CBN on Monday gave all banks a four-week period, till October 13, within which to comply with the directive, or face serious sanctions.
CBN Director, Banking Supervision, Ahmad Abdullahi, said regulatory sanctions to be meted out to erring DMBs include, but not limited to being barred from all future CBN foreign exchange interventions.
Meanwhile, CBN’s spokesperson, Isaac Okorafor, said a breakdown of the Bank’s latest FOREX intervention, showed the retail Secondary Market Intervention Sales, SMIS, receiving the largest intervention of $285 million.
Other components of the intervention include $100 million for wholesale SMIS, $90 million for Small and Medium Enterprises, SMEs window, and $70 million for ‘invisibles’ such as Basic Travel Allowances, BTA, tuition fees and medical payments.
Mr. Okorafor said the amount released underscored the CBN’s avowed commitment to ensure a liquid interbank foreign exchange market, where all genuine requests will be met in line with extant FX guidelines.
He expressed optimism that with the increment of the nation’s foreign reserve to about $32 billion, the CBN would continue to fulfil its mandate of safeguarding the international value of the legal tender while hoping to achieve a convergence between the FX rates at both the inter-bank and BDC segments.
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