Bank chiefs caught frustrating efforts by the Central Bank of Nigeria (CBN) at getting more dollars to end-users risk severe punishment, the apex bank has warned.
The warning came on the backdrop of reports that lenders are setting difficult hurdles for foreign exchange (forex) end-users wanting to make purchases for Business Travel Allowances, Personal Travel Allowances, tuition payment abroad and medical bills.
More than $2 billion has been injected by the CBN into the retail end of the forex market to meet demands by genuine users. The regulator deployed examiners and ‘mystery’ shoppers to the banks to monitor compliance with the intervention funds’ disbursement guidelines and possible abuse by the lenders.
CBN spokesman, Isaac Okorafor confirmed that the regulator had received complaints from customers over frustrations which they were meant to go through in getting foreign exchange for invisible items.
He therefore warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end-users.
He urged the general public to report to it any bank that fails to meet customers’ needs after due documentation and reiterated the regulator’s determination to deal with any official or institution found to be sabotaging the operations of foreign exchange market in whatever guise.
The warning came after a similar threat was made to banks mid-February, in which the CBN also threatened the bank officials with heavy sanctions.
The statement reads: “Any bank that fails to comply with the rules of this and other extant forex guidelines shall be sanctioned, which will affect the executive and other officers of the bank,” CBN Director, Financial Markets Department, Alvan Ikoku said in circular to all banks.
The apex bank explained that the forward sale by banks to their customers shall be for mature or past due obligations and should not exceed 60 days.
It said the special intervention will be via a “wholesale bid” whereby commercial lenders will apply for a particular dollar amount as opposed to submitting individual customer demand.
The lenders will then allocate the dollar to their customers, the CBN said in a mail to commercial banks, asking them to maintain the bid spread of 50 Kobo.
“Successful banks shall send their returns to Financial Markets Department, 24 hours after the release of the intervention results. After release of the results, banks shall sell forwards to match the forward purchases from the CBN,” it said.