CBN Expels First Bank, UBA, GTB, Others From FOREX Market

CBN Expels First Bank, UBA, GTB, Others From FOREX Market

The Central Bank of Nigeria (CBN) has expelled about 15 commercial banks from trading in foreign exchange based on the newly intriduced small and medium enterprises, SMEs wholesale forex window.

The CBN took the action following complaints the deposit money banks (DMBs), were deliberately frustrating efforts by many SMEs to access foreign exchange through the new trading window.

The spokesperson of the CBN, Isaac Okorafor, said the bank took the action based reports received during its monitoring exercises.
Based on the report of the monitoring team, only eight banks kept to the terms of the trading and they include Fidelity Bank, Zenith Bank, Heritage Bank, Access Bank, Jaiz Bank, Sterling Bank, Unity Bank and Diamond Bank.

However, some of the banks under CBN’s sanction include: Citibank, Ecobank, Enterprise Bank, First Bank, First City Monument Bank, Guaranty Trust Bank, Key Stone Bank.

Others were MainStreet Bank, Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank, SunTrust Bank, Union Bank of Nigeria, United Bank for Africa, and Wema Bank.

Mr. Okorafor said the CBN was unhappy with the at the action of the banks that refused to sell foreign exchange to SMEs to enable them import eligible finished and semi-finished items, despite the availability of forex from its wholesale intervention window.

The CBN spokesperson said, “All banks that had refused to sell FOREX to the SME actors after accessing over $300 million offered to the SMEs wholesale forex window since its creation last month will be sanctioned accordingly.”

While advising industry player to follow the rules Mr. Okorafor cautioned the CBN would not allow any form of instability in the interbank forex market through the actions of institutions or individuals.

Meanwhile, the CBN continued its intervention in the foreign exchange segment of the financial market by injecting a total of $196.2 million into the various segments on Tuesday.

A total of about $100 million were made available to dealers at Tuesday’s FOREX wholesale auction.

Other levels of intervention included $52 million made available to the SMEs segment and a total of $44.2 million for Personal/Basic Travel allowances as well as medicals and tuition fees.

Mr. Okorafor also announced interventions in the retail auction window, which he said would be computed when the bank received requests made by customers to the CBN through their respective banks.

He also disclosed that the bank would continue its weekly sale of $20,000 to dealers in the Bureau de Change (BDC) segment this week.

He said, “We are confident that the continued interventions by the CBN will continue to guarantee stability in the market and ensure availability to individuals and business concerns.”

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