Central Bank of Nigeria Headquarters

…As 14 Others Face Ban – 

The Central Bank of Nigeria (CBN) has declared only eight Deposit Money Banks (DMBs) fit to participate in the weekly Small and Medium Scale Enterprises (SMEs) wholesale spot and forward intervention.

In a move described by experts as necessary to sanitise the financial system, the apex bank also barred 14 other banks from vastly profitable Wholesale Forex window over clear infractions and purposely making it difficult for SMEs to access foreign exchange from the new forex window opened on April 11, 2017 by the CBN.

Among the banks sanctioned, effective Tuesday, May 2, 2017, are big industry players like UBA, Citi Bank, First Bank, Skye Bank, and Wema Bank. Others include FCMB, Standard Chartered Bank, GTB, Union Bank and Ecobank.

CBN Acting Director, Corporate Communications, Isaac Okorafor, who acknowledged the ban as speculated by competent sources within the financial system, said the eight banks that escaped the CBN’s hammer are Zenith Bank, Access Bank Plc, Heritage Bank, Sterling Bank, Diamond Bank Plc, Jaiz Bank, Fidelity Bank, and Unity Bank.

Okorafor’s position substantiates grumblings within the banking sector that some banks are deliberately frustrating the new policy, even as he admitted that the CBN’s management axe only descended on DMBs yet to utilize funds allocated to them under the SME window since becoming operational last month.

The spokesman warned that the apex bank would not fold its arm and tolerate any form of instability in the inter-bank forex market caused by the actions or inaction of certain institutions or individuals in the system.

According to him, the action will however be lifted immediately any of the affected banks show evidence of significant utilization of the fund allocated to them under the SME window, adding that as an incentive, the commercial banks that made use of their SME funds were allocated all of the $100 million sold at the Tuesday’s wholesale auction.

So far, CBN has stepped up its substantial intervention in the market with an injection about $196.2 million into the various segments of the Forex market on Tuesday, May 2, 2017.

Okorafor explained that the bank offered the sum of the $100 million to authorized dealers at Tuesday’s FOREX wholesale auction. A breakdown of the other interventions indicate that the CBN made available the sum of $52 million to the Small and Medium Enterprises (SMEs) segment, while invisibles such Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), Medicals and tuition received $44.2 million.

Okorafor, who also announced interventions in the retail auction window, said this would be computed when the apex bank receives requests made by customers through their respective banks, adding that CBN would continue its weekly sale of $20,000 to dealers in the Bureau de Change (BDC) segment this week.

Meanwhile, insiders, who applauded the decision to ban the erring banks, hinted that the CBN is seriously against activities of some banks that seek to impede availability of forex from the apex bank wholesale intervention window.

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