Sixteen Deposit Money Banks have been barred from dealing in the Small and Medium-scale Enterprises window of the foreign exchange(Forex) market by the Central Bank of Nigeria(CBN).
In a statement released on Tuesday by its Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, the apex bank said the decision to sanction the banks was taken after it received complaints that most of the banks were deliberately frustrating efforts by many SMEs to access forex through the new window.
Based on field reports, only eight banks had sold forex to the SMEs segment since the introduction of the new window, the apex bank said.
The statement reads “Following persistent complaints that some Deposit Money Banks have deliberately frustrated efforts by many SMEs to access forex from the new window created by the CBN, the apex bank on Tuesday, May 2, 2017, barred all but eight banks from dealing in the SME wholesale forex window.
“The financial regulator took the decision to bar the erring banks based on field reports, which revealed that only eight banks had sold forex to the SMEs segment since the inception of the new window.
“The CBN frowned at the action of banks that declined to sell foreign exchange to the SMEs to enable them to import eligible finished and semi-finished items despite the availability of forex from the CBN wholesale intervention window.
“The banks not barred include Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank.”
The banks sanctioned are First Bank of Nigeria Limited, Guaranty Trust Bank Plc, First City Monument Bank Plc, United Bank for Africa Plc, Citibank, Ecobank Nigeria, Keystone Bank Limited, Skye Bank, Stanbic IBTC Bank, Union Bank Plc and Wema Bank Plc.
The 16 banks, according to CBN, had refused to sell forex to SMEs after accessing over $300m offered to the SMEs’ wholesale forex window.
The sanction would be lifted immediately they showed evidence of significant utilisation of the funds allocated to them under the SME window.
The apex bank said said banks that utilised their SME funds were allocated all of the $100m sold at Tuesday’s wholesale auction.
The CBN said that it would “not sit back and allow any form of instability in the interbank forex market through the actions of institutions or individuals.”