The Central Bank of Nigeria (CBN) has barred all but eight banks from participating in the weekly SME wholesale spot and forward intervention with effect from Tuesday, May 2, 2017.
This follows persistent complaints that some deposit money banks (DMBs) have deliberately frustrated efforts by many small and medium enterprises (SMEs) to access forex from the new window created by the apex bank.
Among the erring banks are Ecobank, First City Monument Bank, Guaranty Trust Bank, Skye Bank, Union Bank and Wema Bank.
Sources at the CBN disclosed that the financial regulator took the decision to bar banks based on field reports, which revealed that only eight banks had sold forex to the SMEs segment since the inception of the new window.
The CBN condemned at the action of banks that declined to sell foreign exchange to SMEs to enable them import eligible finished and semi-finished items despite the availability of forex from the CBN Wholesale intervention window.
Confirming the decision, the CBN Acting Director, Corporate Communications, Isaac Okorafor, said the CBN management decided to bar banks that were yet to utilize any portion of the funds allocated by the CBN under the SME window, since the inception of the window last month, from participating in the weekly wholesale spot and forward interventions.
He listed the banks not barred to include Access Bank, Diamond Bank, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank, warning that the CBN would not sit back and allow any form of instability in the interbank forex market through the actions of institutions or individuals.
He, however, disclosed that the action will be lifted immediately any of the affected banks show evidence of significant utilization of the fund allocated to them under the SME window.
As an incentive, Okorafor said banks that had utilised their SME funds were allocated all of the $100 million sold at the Tuesday’s wholesale auction.
He therefore urged all stakeholders to play by the rules for the benefit of the entire country and its economy.
Meanwhile, the CBN continued its massive intervention in the foreign exchange segment of the financial market by injecting a total of $196.2 million into the various segments of the Forex market on Tuesday.
