- The Central Bank of Nigeria has threatened to sanction banks involved in illegal forex transactions
- The CBN stated that it would conduct surprise visits to banks accused of engaging in the unauthorised sale of dollars
- The apex bank added that it would also carry out a name and shame of commercial banks involved in such malpractices
The Central Bank of Nigeria (CBN) has issued a warning regarding potential repercussions for financial institutions involved in the illegal sale of dollars or unauthorised forex transactions.
The warning follows the unfortunate decline of the Nigerian currency, the naira, against the dollar at official and unofficial markets.
Folashodun Shonubi, the acting Governor of the CBN, conveyed this message while delivering a lecture titled "Diaspora Remittances and Nigerian Economic Development" in Abuja.
Shonubi underscored the significance of implementing stringent measures to curtail illicit remittances, emphasising the need to direct them through proper channels to enhance overall economic growth.
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CBN to name and shame banks
According to The Guardian, the apex bank boss declared the establishment of a committee that will conduct surprise visits to financial institutions accused of engaging in the unauthorised sale of dollars.
We need to name and shame commercial banks involved in such malpractices.
The interim governor further highlighted the deficiencies of the current remittance mechanism.
He approximated that sending funds to Sub-Saharan Africa from the diaspora incurs a cost of around 8-9% per $100, a figure recognised as the global peak.
Nonetheless, he acknowledged that remittances to Nigeria amounted to approximately $16.7 billion, with most of the funds operating within the informal sector.
We are working hard to encourage individuals to bring money into the formal sector rather than relying on informal channels, which have become difficult to manage.
Despite attempts to encourage individuals to participate in formal market transactions through a N5 refund incentive, it was observed that this approach yielded unsatisfactory results. As a result, the decision was made to discontinue the N5 rebate.
The CBN had in the past expressed optimism that the naira would bounce back as it continues to intervene with policies that will save the naira.
CBN to rename I&E window
The head of the CBN recognised the effectiveness of incentives in enticing individuals to enter the formal market. He mentioned that at some point, the Importer and Exporter market would be named and accepted as the sole forex market.
We will rename the foreign exchange market, known as the I & E market, to the Nigerian Foreign Exchange Market, as it is the sole market we acknowledge.
CBN declares highest profit in 5 years
In related news, Legit.ng reported that the Central Bank of Nigeria announced a significant after-tax profit of N103.85 billion, marking a substantial 38.24% surge in earnings compared to the N75.12 billion reported in the preceding year.
These figures were unveiled in the latest financial statements on the institution's official website, as accessed by Legit.ng.
A close examination of the data indicates that the profit declared in 2022 is the most substantial in five years, marking the fifth instance where the CBN has achieved a profit exceeding N100 billion in a single year.