CBN Imposes N100m Penalty for Forex Violations by Banks

The Central Bank of Nigeria (CBN) has established a N100 million penalty for banks that process foreign exchange transactions without adequate documentation, as outlined in its newly released foreign exchange manual. This penalty is part of a comprehensive compliance regime aimed at tightening oversight in Nigeria's foreign exchange market and strengthening compliance standards to curb abuses among authorized dealers.

The updated manual, which is the first major revision since 2017, mandates that banks submit daily returns on foreign exchange transactions and imposes escalating penalties for non-compliance. For instance, banks that fail to report will face fines starting at N500,000, with additional penalties for continued violations.

Furthermore, banks are prohibited from reallocating foreign exchange funds without regulatory approval, with severe consequences for breaches, including potential suspension of dealership licenses. The CBN's efforts are designed to promote transparency in foreign exchange inflows and outflows and support national economic priorities.