Forex Market: Analysts Laud CBN’s Re-instatement Of 8 Banks | Independent Newspapers Limited
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Banking & Finance

Forex Market: Analysts Laud CBN’s Re-instatement Of 8 Banks

Sokoto, CBN; Collateral
Posted: Sep 2, 2016 at 2:46 pm   /   by   /   comments (0)

The decision of the Central Bank of Nigeria (CBN) to re-admit the rest of the hitherto banned Deposit Money Banks (DMBs) to commence dealing in the foreign exchange market has been lauded by financial analysts.

Announcing the reinstatement of the Banks, the CBN Director, Banking Supervision Department, Mrs. Tokunbo Martins stated that the Body of bank CEOs, under the auspices of the Chartered Institute of Bankers of Nigeria (CIBN), met with the Committee of Governors of the CBN and presented a payment plan for all outstanding United States Dollars deposits from the NNPC/NNLG in their possession to the Treasury Single Account (TSA).

They believe that the decision will go a long way at confirming the readiness of the apex bank to remain resolute at resolving issues in the banking sector without rocking the boat.

Emmanuel Alozie, a banker, said the decision to re-instate the bank will assist some of the affected banks regain confidence among investors and customers who were discourage about the earlier decision by the CBN to suspend them.

“What the CBN has done by re-instating the bank is a good development. I was one of those who believed that the apex bank should have deployed a more subtle measure than the ban but I am happy now that the CBN has seen the need to resolve the matter amicably”, Alozie said.

Adeola Olufon, a former Assistant Director with Afribank, said the decision has confirmed that the CBN is a listening regulator who listens to the voice of the people.

His words: “You know that bank’ MDs met with the CBN Governor, Godwin Emefiele, last week and pleaded with him to lift the bank on the affected banks. I am happy that the burden of the ban on the banks has been lifted and they will now concentrate on banking”.

Speaking during the briefing, the President in Council, Chartered Instituted of Bankers of Nigeria (CIBN), Mr. Segun Ajibola stated that  the Body of Bank CEOs in partnership with the CIBN decided to seek for the resolution of the situation in the interest of the Nigerian economy.

It would be recalled that the apex Bank had earlier banned some banks from dealing in the forex market for non-remittance of US Dollars deposits from the NNPC/NLNG in their possession to the Treasury Single Account (TSA), until concerned banks had complied with the directive.

Also in attendance at the briefing was the Managing Director, Access Bank Plc, Mr. Herbert Wigwe, who revealed that the Body of Bank CEOs met with the CBN Committee of Governors in order to resolving the issue.

Earlier in the week, the Lagos Chamber of Commerce and Industry (LCCI) had called on the Central Bank of Nigeria (CBN) to review it decision to ban eight commercial banks from foreign exchange due to non-remittance of NNPC funds to CBN.

LCCI Director-General, Mr. Muda Yusuf, also advised the CBN to be careful of likely effects of its policies, actions and pronouncements, just as he urged the government to moderate inflationary pressures and ease poverty conditions by reviewing import duty regimes and the various trade facilitation issues at the nation’s ports.

A statement by Yusuf in Lagos on Monday said that CBN’s policies, actions and pronouncements could have serious effects on the foreign exchange market.

He spoke against the backdrop of recent decisions by the apex banks.

The CBN barred nine banks from the foreign exchange market on Aug. 23. The affected deposit money banks are; First Bank of Nigeria, Diamond Bank, Sterling Bank, Skye Bank Plc, Fidelity Bank, Keystone Bank, First City Monument Bank (FCMB) and Heritage Bank.

The United Bank for Africa (UBA), initially listed among the suspended banks, was readmitted into the foreign exchange market on Aug. 25 after clearance of its outstanding remittances.