Banks Have Been Given Four-Weeks Ultimatum to Open Fx Teller Points By CBN - eritvnews

Banks Have Been Given Four-Weeks Ultimatum to Open Fx Teller Points By CBN

Piqued by the failure of the banks to comply with an earlier directive asking them to open teller points for retail foreign exchange (FX) transactions at various locations, the Central Bank of Nigeria (CBN) has issued a four-week deadline for them to comply or face stiff sanctions.

Banks that fail to comply with the directive before October 13, would among other severe sanctions be barred from all future CBN FX interventions.

The central bank stated this in a circular signed by its Director, Banking Supervision Department, Ahmad Abdullahi, a copy of which was obtained by THISDAY yesterday.

In a bid to ensure that FX was easily accessibly by travellers, the central bank had directed all banks to open FX outlets to sell dollars and other hard currencies at major airports.

The CBN had explained that the initiative would also ensure that transactions were settled at much more competitive exchange rates.

However, the circular revealed that most banks were in breach of the directive.

It said: "The attention of all banks is drawn to the CBN Circular dated March 3, 2017 with reference number: FMD/DIR/CIR/GEN/08/006 wherein all authorised FX dealers were directed to, among others:

"Open a teller point for retail FX transactions (PTA/BTA and SME) including buying and selling, in all locations in order to ensure access to foreign exchange by their customers and other users, without any hindrance," it read.

In addition, the banks were expected to have an electronic display board at all their branches, showing rates of all trading currencies, and customers must insist on processing FX transactions (for all the above windows) based on a display rate.

Continuing, the circular added: "The objective is to create awareness among members of the public regarding the availability of such facilities in branches of the banks at clearly disclosed prices.

"Unfortunately, our observation has been that most Deposit Money Banks are in breach of the above directives.

"You are, therefore, given a period of four weeks up to October 13 to fully comply with the above directives or face stiff regulatory sanctions, including but not limited to being barred from all future CBN foreign exchange interventions."

Since February, the CBN has sustained its intervention in the interbank FX market, which has helped in eliminating currency speculators and pushed FX demand away from the parallel market.

CBN spokesman, Mr. Isaac Okoroafor recently said the CBN had taken measures to check the activities of speculators and shield the currency from attacks, while also maintaining the value of the naira.

Okorafor maintained that authorised dealers have enough funds to meet the FX needs of customers and urged all to adhere to the extant guidelines on the sale of FX in the market.

He advised those in genuine need of FX to continue to approach their respective banks for purchase, adding that the CBN remained optimistic that the Nigerian currency will fare strongly against other convertible currencies.

In this regard, the CBN yesterday sustained its interventions in various segments of the interbank FX market with the injection of $545 million, the largest weekly injection by the central bank in recent weeks.

Giving a breakdown of the Bank's latest intervention, Okorafor said the retail Secondary Market Intervention Sales (SMIS) got the largest intervention of $285 million.

Other components of the released figures included $100 million offered for Wholesale SMIS, $90 million for the small and medium enterprises (SMEs) window and $70 million for invisibles such as basic travel allowances, tuition fees and medical payments.

According to Okorafor, yesterday's intervention underscored the CBN's avowed commitment to ensure a liquid interbank FX market where all genuine requests will be met in line with extant FX guidelines.

He expressed optimism that with the accretion in the nation's foreign reserve, the Bank would continue to fulfil its mandate of safeguarding the international value of the naira.

He further disclosed that the Bank's management also remained optimistic about achieving a convergence between the forex rates at both the inter-bank and BDC segments of the market.

Source: ThisDay


Post a Comment