The Central Bank of Nigeria has fined Standard Chartered Bank N2billion for foreign exchange infraction, an authoritative source told Thisday wednesday.
The bank, according to the source, drew the apex bank’s anger for buying $25million at the official rate and selling same way above the inter-bank market rate.
Apart from the hefty fine, the commercial bank’s treasurer is also said to have been suspended by the apex bank that has been battling to rein in unwholesome banking industry practises that have engendered a huge differential between the inter-bank and parallel market rates.
As part of its efforts to bridge the wide gap between the interbank and the Bureau De Change (BDC) segments of the foreign exchange (FX) market, the apex bank, the State Security Service (SSS), the Nigeria Police Force (NPF) and the Bureau De Change Operators (BDCs) also met yesterday over the need for the BDCs to adhere to the rules governing foreign exchange transactions.
A reliable source, who attended the closed-door meeting, said the federal government was concerned about the disparity in the FX rate among the three markets.
According to the source, the CBN and the security agencies present at the meeting made the BDC operators to understand that a lot of foreign investors are not comfortable with the wide gap between the three arms of the FX market and would only come in if the situation is addressed.
Therefore, it is anticipated that the initiative would encourage the inflow of FX from foreign portfolio investors.
The President, Association of Bureau De Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, who confirmed the development in a phone interview yesterday, said his members had pledged to cooperate with the government.
He explained: “We were told to follow the rules and make sure we cooperate with them. We have agreed to carry our members along on that, in ensuring that compliance is strictly observed. We have been sensitising our members and we have been holding meetings.
“We want to have same regulation that is happening within the banking industry for BDCs. If you go to any bank, you see the FX rates written boldly. So, we have promised the government that we would adhere to the rules. So, we are looking at a rate between N390/$ and N400/$. That is, we buy at N390/$ and sell at N400 to retail customers.”
He said the initiative was to make the parallel market unattractive.
“We already have a Rate Regulation Committee and we have an Enforcement and Surveillance Committee as well as a Sensitisation Committee. So, our business is now under strict surveillance by the security agencies and we have to protect it,” the ABCON president added.
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