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CBN warns of suspending banks’ operating licences over Forex infractions

*The Bankers’ Bank reiterates the Foregn Exchange (Forex) operation licence(s) of any Nigerian bank or banks that are found culpable in the ongoing investigation would be suspended at least for a year

Isola Moses | ConsumerConnect

Against the backdrop of the reported occurrences in the market lately, the Central Bank of Nigeria (CBN) has reminded banks in the country to desist from all and any form of Foreign Exchange (Forex) malpractices.

ConsumerConnect reports the Bankers’ Bank stated that any Nigerian banks involved in Forex misconducts would have their Foreign Exchange (FX) operation licences suspended for at least a year.

Dr. O.S.  Nnaji, Director of Trade and Exchange Department at CBN, gave this timely warning in a circular, titled: “Observations Of Due Diligence In The Processing Of Foreign Exchange Translations”, dated, signed and issued to the concerned banks Friday, September 10, 2021.

The Bank noted: “In line with the continuing close surveillance of our financial market in general and the FX market in particular, the CBN wishes to remind all banks that it is their responsibility to not only Know their customers but Know their customer business.

“Given these responsibilities, and in view of recent occurrences in the market, the CBN would like to remind banks to desist from all and any form of Forex malpractices.

“We wish to reiterate that the FX operations licence of any bank or banks that are found culpable with the ongoing investigation would be suspended at least for one year.“

Banks enforce CBN’s directive on Forex for consumers

In line with the directive of the Central Bank of Nigeria over the need for banks to not only know their customers but also know their customers’ businesses, some Deposit Money Banks (DMBs) have sent notices to their customers, warning that identities and Bank Verification Numbers (BVN)s of those who contravene the Bank’s latest FX policy on overseas personal and business travels would be published, according to report.

It is noted the CBN had also directed that travellers who buy Foreign Exchange from banks for travel purposes but fail to embark on the trip after two weeks of their scheduled travel dates must return the Forex to their banks.

Likewise, the DMBs in their notices to consumers of their financial products and services, also stated the consequences for those who engage in fraudulent and unethical practices in respect of the purchase of Personal Travel Allowances (PTA) and Business Travel Allowances (BTA) respectively.

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