CBN to Sanction Banks Caught Selling Dollars Illegally

Patrick OdeyAugust 13, 2023

1 minute read

The Central Bank of Nigeria (CBN) has warned banks that engage in unlawful sales of foreign exchange (forex) to customers.

The acting Chairman of the CBN, Folashodun Shonubi, said that the apex bank will set up a commission to monitor and sanction such banks.

Shonubi made this disclosure at a lecture titled: “Diaspora Remittances and Nigerian Economic Development” in Abuja. He said that the commission will conduct surprise inspections on banks that are accused of selling dollars at higher rates than the official market.

He said, “We need to name and shame commercial banks involved in such malpractice.”

Shonubi also stressed the need to curb illegal remittances of forex and channel them through formal means to boost economic growth. He said that Nigeria received about $16.7 billion in remittances from the diaspora, but most of the money was outside the legal market.

He noted that Nigeria has the highest cost of transferring money from abroad compared to other countries in Sub-Saharan Africa. He said that 8–9 per cent of every $100 is too much to pay as fees for remittance services.

Shonubi highlighted the importance of using incentives to attract individuals into formal market transactions. However, he admitted that the N5 refund policy as an incentive did not work well.

He said, “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. 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.”