CBN slaps N100m fine on banks for undocumented forex transactions
By Aboki Forex —
The Central Bank of Nigeria has introduced a N100 million fine on banks that process foreign exchange transactions without proper documentation. The penalty is part of the fourth edition of the Forex Manual released by the CBN last week. This is the first major update to the framework since 2017.
CBN Governor Olayemi Cardoso said the review was necessary to align Nigeria's forex administration with current economic reforms and market dynamics. Under the new rules, authorised dealers that complete forex deals without required documents will pay N100 million per undocumented transaction. An additional N10 million penalty applies for each impacted transaction.
Stricter penalties for limit breaches
The updated framework also imposes tougher penalties on banks that violate the prescribed Net Open Position Limits. First-time offenders get a warning letter. A second breach leads to a 10-day suspension from the forex market. A third infraction results in a 90-day suspension.
Banks must now submit daily returns on forex transactions between 9:00 AM and 10:00 AM the next working day. Weekly returns are due within five working days after month end. Failure to comply attracts a N500,000 penalty for late daily returns. For weekly returns, the fine starts at N5 million plus N500,000 per day the violation continues.
New rules for importers and exporters
Importers must present their Exchange Control Documents within 90 days of negotiation with overseas correspondents. Exporters face restrictions on forex market participation for at least 360 days. A fourth infraction can lead to indefinite exclusion from the forex market.
For oil and gas exporters, all earnings must be repatriated within 90 days of shipment. Non-oil exporters have 180 days. Failure to repatriate attracts a penalty of 1% of the naira value of the un-repatriated amount, according to Punch reports.
The advance payment for imports has been raised to 30% of the invoice value, up from 15%. Technology-based payments and Form NXP processing fees for exports have been waived. New provisions cover service exports, technology-based payments, and transactions on the Pan African Payment and Settlement System.
The CBN said the revised framework aims to bring transparency to forex inflows and outflows, enforce better documentation, and ensure efficient channelling of forex resources to key sectors. The naira weakened slightly to N1,373.87/$1 in the official market, down 17 kobo from the previous session.