CBN warns banks on illegal forex sales, to conduct on spot inspections

The Central Bank of Nigeria (CBN) has issued a stern warning to banks involved in illicit foreign exchange (forex) sales and announced the establishment of a commission to conduct surprise inspections of accused banks.

Acting Governor of CBN, Folashodun Shonubi delivered this message during a lecture titled “Diaspora Remittances and Nigerian Economic Development” in the capital city of Abuja.

Shonubi stressed the necessity of stringent measures to curb unauthorized remittances and redirect them through proper channels to optimize economic growth.

“We are committed to exposing and condemning commercial banks engaged in such fraudulent practices,” Shonubi declared.

He also highlighted the deficiencies of the current remittance system, pointing out that transferring money to Sub-Saharan Africa from the diaspora costs approximately 8-9 percent of every $100, making it the highest globally.

Despite this, Nigeria received an estimated $16.7 billion in remittances, with a significant portion of the funds remaining outside the legal market.

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“Our efforts are directed towards encouraging individuals to bring their funds into the formal sector, thereby reducing reliance on informal channels, which have proven challenging to regulate,” he emphasized.

Shonubi acknowledged the initial attempt to incentivize formal market transactions by offering a N5 refund but noted its ineffectiveness, leading to the discontinuation of the rebate.

In a bid to enhance transparency and legitimacy, the CBN chief announced a renaming of the foreign exchange market, currently known as the Investors and Exporters (I&E) market, to the Nigerian Foreign Exchange Market, signifying its exclusive recognition.

Commandant of the National Institute of Security Studies, Ayodele Adeleke highlighted the significance of the lecture series in raising awareness of security concerns.

He underscored the series’ role as a pivotal element in the institution’s 10-month program, aimed at fostering understanding and addressing crucial issues.

The CBN’s resolute stance against unlawful forex practices underscores its commitment to ensuring a regulated and transparent financial landscape, fostering economic stability and growth in Nigeria.