Naira crash: CBN to sanction banks engaged in illegal forex sale

The Central Bank of Nigeria (CBN) has said that it will deal with commercial banks engaged in illegal sale of foreign exchange.

This is coming on the heels of the crash of the naira to over N950/$ at the parallel market even as forex scarcity worsens.

There are also allegations that commercial banks are diverting forex to the unofficial foreign exchange market rather than selling to their customers.

This was made known by the acting CBN governor, Folashodun Shonubi, while delivering a lecture titled, "Diaspora Remittances and Nigerian Economic Development", in Abuja.

Shonubi emphasized the importance of strict steps to restrict illegal remittances and channel them via appropriate means to maximize economic growth.

"We need to name and shame commercial banks involved in such malpractices," he declared.

The acting CBN governor further emphasized the shortcomings of the present remittance system, in which he estimated that the cost of transferring money to Sub-Saharan Africa from the diaspora at about 9 percent of every $100, which is described as the highest in the world.

He, however, noted that Nigeria received about $16.7 billion in remittances, with the vast majority of the money outside the official foreign exchange market.

"We are working hard to encourage individuals to bring money into the formal sector rather than relying on informal channels, which have become difficult to manage," Shonubi added.

The CBN boss noted that despite efforts to induce individuals to engage in formal market transactions by granting a N5 refund through its Naira 4 Dollar scheme, the policy was still ineffective prompting the N5 rebate to be discontinued.

He, however, acknowledged the usefulness of incentives in attracting people to the formal market.