#breaking: Central Bank Expels At Least 14 Banks From Wholesale Forex Window Over Infractions

BEVERLY HILLS, May 2, (THEWILL) – The Central Bank of Nigeria (CBN) has banned over a dozen commercial banks in Nigeria from the highly lucrative Wholesale FX window for deliberately frustrating efforts by small and medium scale enterprises (SMEs) to access foreign exchange from the new forex window created by the regulator on April 11, 2017.

On the list of the suspended banks according to multiple authoritative sources with knowledge of the development are some of the biggest banks in land – GTB, Citi Bank, FCMB, Ecobank, Standard Chartered Bank and Union Bank amongst others.

THEWILL gathered that the ban is effective immediately.

The sources told THEWILL that only eight (8) banks were not affected by the ban, which was approved by Governor Godwin Emefiele on Tuesday. The banks are Access Bank, Zenith Bank, Fidelity Bank, Diamond Bank, Sterling Bank, Unity Bank, Jaiz Bank and Heritage Bank.

The sources said the CBN took the drastic decision based on field reports, which revealed that only the eight banks spared had sold forex to the SMEs segment since the inception of the new window. One source said the apex bank frowned at the action of the banks that declined to sell forex to SMEs to enable them import their materials despite availability of forex from the CBN Wholesale Intervention window.

“Of the US$400 million the CBN has allocated to commercial banks in this SME Window, reliable reports indicate that commercial banks have only sold less than 10 percent to small-scale users and traders, a situation that has forced these users to remain in the black market,” one source said, warning that the CBN will not condone any actions from banks or groups that could undermine the stability of the forex market.

Confirming the development, the CBN Acting Director, Corporate Communications, Isaac Okorafor, said the CBN management decided to bar banks that were yet to utilize any portion of the funds allocated by the CBN under the SME window, since the inception of the window last month, from participating in the weekly wholesale spot and forward interventions.

He, however, disclosed that the action will be lifted immediately any of the affected banks show evidence of significant utilization of the fund allocated to them under the SME window.

As an incentive, Okorafor said banks that had utilized their SME funds were allocated all of the $100 million sold at the Tuesday's wholesale auction.

He therefore urged all stakeholders to play by the rules for the benefit of the entire country and its economy.

Meanwhile, the CBN continued its massive intervention in the foreign exchange segment of the financial market by injecting a total of $196.2 million into the various segments of the Forex market on Tuesday, May 2, 2017.

According to Okorafor, the apex Bank offered the sum of the $100 million to authorized dealers at Tuesday's FOREX wholesale auction. A breakdown of the other interventions indicate that the CBN made available the sum of $52 million to the Small and Medium Enterprises (SMEs) segment, while invisibles such Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), Medicals and tuition received $44.2

million.
Okorafor also announced interventions in the retail auction window, which he said would be computed when the Bank receives requests made by customers to the CBN through their respective banks.

He also disclosed that the Bank will continue its weekly sale of $20,000 to dealers in the Bureau de Change (BDC) segment this week.

The spokesman expressed confidence that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns.