May 15, 2024
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CBN to Impose Tough Sanctions on Banks

The Central Bank of Nigeria (CBN) has announced that it will impose tough sanctions on banks that violate its regulations on foreign exchange and anti-money laundering.

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CBN to impose tough sanctions on banksThe Central Bank of Nigeria (CBN) has announced that it will impose tough sanctions on banks that violate its regulations on foreign exchange and anti-money laundering. The CBN Governor, Olayemi Cardoso, said this on Tuesday in Abuja at the Monetary Policy Committee meeting, the first since he assumed office in September 2023.

According to Cardoso, the CBN is collaborating with law enforcement agencies to investigate and prosecute banks that are involved in infractions, such as aiding arbitrage, non-compliance with documentation, and failure to verify customer identity. He said the CBN is moving to a “very aggressive regulatory environment” where tolerance for non-compliance is zero.

Cardoso also revealed that the CBN has fined five major banks, namely Guaranty Trust Holding Company Plc, United Bank for Africa Plc, Access Bank Plc, Stanbic IBTC Holdings Plc and Fidelity Bank Plc, a total of N1.46bn for various infractions committed between January 2013 and July 2020.

Cardoso said the CBN’s actions are aimed at ensuring the stability and integrity of the banking system and the foreign exchange market, as well as combating money laundering and terrorism financing. He said the CBN will continue to make the market more liquid and transparent for genuine and compliant customers.

Cardoso also stated that the CBN’s foreign reserves increased to $34bn as of February 20, up by $2bn from the $32.23bn recorded at the end of January. He attributed the improvement to reforms in the foreign exchange market and an increase in oil production among other factors.

The naira has depreciated to an all-time low since the new administration floated the currency and unified the exchange rate windows. The Nigerian currency weakened from over N700/$1 in May 2023 to over N1,500/$1 on Tuesday. However, Cardoso said the CBN is confident that the naira will recover as the economy improves and the demand and supply of forex stabilizes.

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