5 Nigerian Banks Under Fire For Manipulating Forex Rates

The Central Bank of Nigeria, CBN, is believed to have queried five commercial banks for allegedly manipulating foreign exchange (forex) transaction rates.

The CBN, it was gathered, detected the rate manipulations following the mandatory rendition of forex returns and compliance with anti-money laundering regulations.

Though the identities of the affected banks were still kept under wraps as at press time, a CBN statement Sunday admitted that some of the queried lenders manipulated forex rates. Others attributed the rate discrepancies to ‘formatting errors’.

Although the statement was silent on the number of the affected banks, industry sources said five lenders were involved and may face sanctions.

Round-tripping a serious financial crime, has become more rampant after the CBN introduced the flexible forex policy which devalued the naira by over 40 per cent against the dollar. The policy shift created a huge gap between the official and parallel market rates.

About 20 to 25 per cent of the volume of forex traded in the country is from autonomous sources, usually diverted into the parallel market through round-tripping.

The naira was on Friday trading at N306 to dollar in the official market and N498 to the dollar in the parallel market, raising the temptation of rate manipulation among banks desperately looking for free funds to boost their profits.

The CBN said in the statement that “The commercial banks involved in providing inaccurate data has since been issued queries accordingly. Some have returned a response indicating that some of the figures were related to formatting errors which do not affect the true rates of the affected transactions.”

The CBN said it neither allocates foreign exchange nor does it deal directly with bank customers adding that it also does not fix forex rates for transactions by individuals or companies.

“In line with our principle of transparency, we directed Deposit Money Banks (DMBs) to forward to us evidence of forex sale to end users and to advertise same in national dailies. Since the introduction of the new forex policy in 2016, we have published, monthly, the evidence of sale from DMBs, as received from the banks and without any alteration by us in the spirit of transparency.

“We have recently observed, however, that some DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates,” the statement said.

“As the constitutionally authorised industry regulator mandated to manage the forex market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the forex market,” it added.

The CBN said the forex sale under the new policy was most transparent and not intended to benefit any individual or corporate body in anyway.
“While we appreciate the concerns of stakeholders, we urge all concerned to verify information on matters relating to the bank and use our available channels to lodge their complaints,” it said.

There have been several allegations against the CBN on irregularities in the rates at which forex were obtained by some individuals and companies from banks under the new 60:40 foreign exchange policy, which prioritises forex sales to manufacturers, agriculture, plant and machinery and critical raw materials, among others.

The CBN’s report on forex utilisation showed last week that it disbursed $1.07 billion to 4,328 manufacturers, power and other real sector operators for the procurement of raw materials, plants and machinery.

Prominently players in the funding are FirstBank, Zenith Bank, Access Bank, Unity Bank, Union Bank, Wema Bank, and Sterling Bank.

Others are Diamond Bank, GTBank, Fidelity Bank, Jaiz Bank and FBN Merchant Bank.

The report, which was for November, listed some of the beneficiaries as Dana Motors, Dangote Industries, Eat N Go Limited, Flour Mills Nigeria, GX Foods Limited and PZ Cussons.

Others are Indorama Eleme Petrochemicals Limited, Fidson Healthcare Limited, Okomu Oil Palm, MTN Nigeria Communications, Nestle Nigeria Plc, Nigerian Breweries Plc and Nigerian Bottling Company Limited among others.
The forex utilisation report was meant to promote transparency and accountability on the side of the lenders which act as a link between the regulator and the forex users.

The CBN said providing forex to the manufacturers and other key players in the economy was meant to enable it keep its promise to strengthen the real sector of the economy by ensuring that 60 per cent of available forex is used to procure industrial inputs, such as raw materials, machine spare-parts, telecom equipment, plastic raw materials, agricultural machines and pre-payment meters, amongst others.

The CBN has also expressed its commitment to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage are able to get LCs to import materials for their businesses.

The exercise, the CBN insists, will provide a new lease of life in the manufacturing sub-sector, and also boost industrial output and employment.

The regulator said it will continue to support and facilitate hitch-free procurement of industrial inputs to sustain production in the manufacturing sector. The gesture, the CBN said, buttresses its commitment to rejuvenate and sustain industrial activities and keeping jobs.



Benue News,376,Biafra,5,Business News,72,Celebrities,92,Crime And Offence,45,Culture,25,Download,5,Education,57,Entertainment,152,Fashion,4,Foreign News,44,Ghana News,5,Health,36,Jobs/Recruitements,20,Nigerian News,823,Politics,305,Relationship,78,Slider,5,Sports,34,Taraba News,12,Technology,15,
Benue Blog Portal: 5 Nigerian Banks Under Fire For Manipulating Forex Rates
5 Nigerian Banks Under Fire For Manipulating Forex Rates
Benue Blog Portal
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete Posted By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy