CBN suspends all banks except first bank from forex sale to BDCs

The Central Bank of Nigeria (CBN) has suspended all the banks, with the exception of First Bank, from selling dollar proceeds of International Money Transfer Services, (IMTS) to Bureau De Change, BDCs till further notice. The suspension came as a result of none compliance to the directive CBN had given to banks two months ago to sell proceeds of their international money transfer services to BDCs.

This was in a bid to address the steady and continuous depreciation of the naira in the parallel market of which they ignored, preferring to do brisk business with the proceeds. This, however generated several complaints from the BDCs, with the Association of Bureaux De change Operators of Nigeria, ABCON, calling for a review of the policy measure.

According to reports, CBN, after due investigation, which revealed that most of them were either not complying or short-changing DBCs by selling at higher margin, except First Bank, which has been allowed to continue with the business, had decided to sanction them.

Reports also have it that the non-compliant banks have been directed to give up 25% of the dollars received through international money transfer services to DBCs. This development is to help mop-up the held dollar position by non-compliant banks and make it available to all BDCs nationwide soon.

This post first appeared on Linda Ikeji's Blog. Read the original story here.