7 February 2018

Nigeria: CBN Scraps Commission On Forex Purchase in Banks

The Central Bank of Nigeria (CBN) has pegged the buying rate of dollars for invisible uses such as school fees, medical bills and travelling allowance at N360 to the dollar whilst removing all bank charges and commissions.

It encouraged customers to patronise banks for their foreign exchange demands.

Speaking at the end of the first Bankers' Committee meeting for the year yesterday, managing director and chief executive of FSDH Merchant Bank, Mrs. Hamda Amber, said customers will get a better rate than what was obtainable at the Bureau de Change and parallel market.

The CBN sells dollars to BDC operators at N360 to the dollar and expect them to sell at between N362 and N363 while it sells to banks at N357 and expects them to sell at N360.

However, banks had been charging commissions on forex bought by customers for invisible transactions.

The Bankers' Committee, which comprises banking industry regulators and chief executives of banks, yesterday scrapped the commissions being charged by banks, and called on customers to report any bank that sells above N360 to the dollar or imposes charges and commissions.

The Bankers' Committee also noted that the period of grace for violators of the repatriation of forex is over as the CBN will commence the sanctioning of defaulters. The CBN had last October said it would begin to sanction exporters who fail to repatriate their proceeds through the bank's system, saying they will be barred from accessing financial services in the country.

CBN director, Banking Supervision, Ahmed Abdullahi, noted that the apex bank wanted to give ample time to warn defaulters before enforcing the strict sanction, adding that sanctions will begin this month, February 2018.

Meanwhile, Abdullahi disclosed that the foreign exchange reserves of the country had risen to $42 billion by yesterday. The 30-day moving average of the reserves, as contained on the website of the CBN as at February 2, 2018, stood at $40.79 billion.

Abdullahi noted that with the growing optimism in the Nigerian economy as well as stable oil price, the reserves were expected to rise further in the coming months.

The Bankers' Committee also agreed to play an active role in the Economic Recovery and Growth Plan (ERGP) of the federal government.

The managing director and chief executive of Stanbic IBTC, Dr. Demola Shogunle, said that banks would play an active role in the three focal areas of power and gas, agriculture and transportation as well as manufacturing and processing identified by the government.

"Bankers' Committee overwhelmingly decided to support those focus areas as part of our responsibility. We will try to be embedded in the programme. The banking community will participate actively to the extent that it will lead to job creation and additional investment in the economy," Shogunle stated.

Nigeria

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