CBN again warns commercial banks to desist from forex embezzlement


The Central Bank of Nigeria (CBN) has warned depository banks (DMB) to refrain from any form of embezzlement in foreign exchange (FX) transactions.

The umbrella bank gave the warning in a letter signed by the director of the trade and foreign exchange department, Ozoemena Nnaji, addressed to the DMB.

Nnaji urged banks to not only know their customers, but also their businesses.

She said the directive was made necessary by recent events in the foreign exchange market.

“The CBN would like to remind all banks that it is their responsibility not only to know their customers (KYC requirements) but also to know their customers’ activities (KYCB requirements).

“In view of this responsibility, and given recent market events, the CBN would like to remind banks to refrain from all forms of currency embezzlement.

“We wish to reiterate that the currency mining licenses of any bank or banks found guilty of pending investigations will be suspended for at least one year,” said the director.

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She urged all affected DMBs to take note and ensure compliance.

Nigeria’s umbrella bank had issued similar warnings earlier to microfinance banks.

A few weeks ago, the CBN warned microfinance banks to withdraw from operations that have exceeded their limits.

The umbrella bank specifically warned microfinance banks to avoid wholesale banking and foreign exchange transactions.

The apex bank had, in a circular sent to all microfinance banks across the country with the number: FPRD / DIR / PUB / CIR / 01/020 and signed by a senior official from the Department of Financial Policy and Regulation Ibrahim Tukur, stressed that the bank apex bank would not hesitate to apply regulatory sanctions in case of violation of its regulations in force.

The CBN has warned microfinance banks to refrain from transactions that have exceeded their transaction limit.

The umbrella bank in the circular said: “.

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Savvy experts, however, said the umbrella bank, beyond warnings to financial institutions, must tackle the weak currency supply.

Founder and Managing Director of Cowry Assets Management Limited and Facilitator of the Institute of Chartered Accountants of Nigeria (ICAN), Jonhson Chukwu, said ICIR that the umbrella bank must support reforms on the foreign exchange market and increase the supply of dollars to the economy.

“The Central Bank of Nigeria must find a way to create platforms for several legitimate demands that find satisfaction in the parallel market. This would allow him to maintain the gains between the naira and the exchange rate, ”he said.

“Beyond what they are doing now, the central bank needs to find a way to admit certain transactions that were accessing money from the BDC window or the parallel market window, to remove some of the pressure that will come in. the near future, because people are still watching the market to see its reactions in the near future.

He noted that the apex bank should encourage competitiveness in the export of commodities on which Nigeria had a competitive advantage, in order to increase the dollar supply to the economy.

“That way there would be more dollars in the economy,” he said.

Notably, the CBN maintained multiple exchange rate markets, creating a window for investors and exporters, another window called NAFEX, and another window for religious travelers. Analysts and investors say this weakens investor confidence, creating uncertainty in the economy.

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The LCCI brings together more than 3,000 investors and companies. The organization said the multiplicity of the exchange rate market was one of the main reasons investors were scared off.

“The lack of cohesion among decision-makers sends a negative signal to the investment community, heightens uncertainty and further inhibits investors.
trust, ”Lagos Chamber of Commerce and Industry (LCCI) President Toki Mabogunke said in an emailed press release to ICIR.

The chamber said it was extremely important for policymakers to harmonize multiple exchange rates into a single market-reflecting rate, which was imperative to boost investor confidence and engender macroeconomic stability.

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