The Central Bank of Nigeria (CBN) yesterday directed all banks to henceforth publish on their websites the names and Bank Verification Numbers (BVN) of unscrupulous customers who indulged in sharp practices to circumvent its new foreign exchange (FX) policy.
The CBN said it was concerned that some customers had taken undue advantage of the policy on sale of FX for overseas personal and business travels, using fake visas as well as cancelling air tickets after purchase of Personal Travel Allowance/Business Travel Allowance.
The apex bank stated these in a circular to all banks dated August 30, and signed by the CBN Director, Banking Supervision Department, Mr. Haruna Mustafa. It said the trend, if not curbed, presented a risk to the integrity and stability of the FX market.
CBN, therefore, directed banks to publish on their websites within two weeks the names and BVN of defaulting customers who presented fake travel documents or cancelled their tickets and failed to return the purchased PTA/BTA, as stipulated in the customer declaration form signed by them.
The CBN had in July resolved to discontinue FX sale to Bureau De Change (BDC) operators in the country. CBN Governor, Mr. Godwin Emefiele, directed all commercial banks to immediately create designated branches for the sale and disposal of FX to customers who deserved it for legitimate purposes.
He said the CBN would no longer process or issue new licences for BDC operations in the country, adding that all licences being currently processed, regardless of the stage, had been suspended.
Following the development, the apex bank had announced that it will commence the immediate refund of capital deposits and licensing fees, where applicable, to BDC promoters who had pending license applications with the bank. It said in arriving at the decision to suspend FX sale to BDC, it had advised banks to ensure that no customer was turned back or refused FX, provided that documentation and all other requirements were met.
The apex bank further warned against undue delays, rationing and diversion of FX, and it directed the banks to establish electronic application and alert systems to update customers on the status of their FX requests.
The CBN further reminded banks that a toll-free line had been set up at the apex bank to enable bank customers to escalate unresolved complaints relating to their FX requests.
The bank added that it would continue to closely monitor banks’ conduct and compliance with the directive in order to ensure an efficient FX market for all legitimate users, adding that any breach of the directive would be severely sanctioned.
Emefiele had said regarding the BDC operators, “They have turned themselves away from their objectives. They are now agents that facilitate graft and corruption in the country. We cannot continue with the bad practices that are happening at the BDC market.”
He added that there was evidence of prevailing ownership of several BDCs by the same promoters to procure multiple FX from the apex bank.
He said, “Several international organisations, embassies, patronise BDC through illegal forex dealers to fund their institutions. We will deal ruthlessly with Nigerian banks that deal with illegal BDCs and we will report foreign organisations patronising them.”
Emefiele had added, “The public should note that once a customer provides basic documentation to purchase FX, all banks must immediately meet that on demand or within a stipulated timeframe sell foreign exchange to the customer.
“Any customer who doesn’t receive FX along these lines must report this to their banks and where they are unsatisfied with the resolution, they are required to contact the CBN on out toll free line 07002255226 or email cbd@cbn.ng to lodge the complaints with details of the bank transaction.”
Shedding more light on the reasons for the stoppage of FX sales to BDCs, Emefiele had explained that the CBN sold over $20,000 to more than 5,500 BDCs per day, adding that the amounts translated to about $110 million per week and $5.72 billion per year.
“The CBN and the government cannot continue to allow this unwholesome practice to continue in Nigeria,” he said.
According to him, “In total disregard for the policies that the CBN introduced to meet its mandate of safeguarding the value of the naira, we have continued to observe that stakeholders in some sectors have not been helpful in this direction.
“In particular, we have noted with disappointment and great concern that our BDC operators have abandoned the original objectives of their establishment, which was to serve retail end users who need $5,000 or less.
“Instead, they have become wholesale dealers dealing in forex to the tune of millions of dollars per transaction. Despite the fact that Nigeria is the only country in the world today where a central bank sells dollar directly to BDC operators.”