The Central Bank of Nigeria on Tuesday wielded the big stick on 16 Deposit Money Banks as it stopped them from participating in the Small and Medium-scale Enterprises window of the foreign exchange market.
The apex bank said this in a statement issued by its Acting Director, Corporate Communications Department, Mr. Isaac Okorafor.
He said the decision to stop the banks from participating in the SME wholesale window of the Forex market was taken following series of complaints that some of them were deliberately frustrating efforts by many SMEs to access Forex from the window.
The apex bank had last month created the SME wholesale window to make it easier for small-scale businesses to access Forex to import critical materials for their operations.
The banks are Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank Plc.
The CBN said all the other 16 banks that had refused to sell forex to small businesses after accessing over $300m offered to the SMEs’ wholesale forex window since its creation last month would be sanctioned accordingly.
Some of the banks to be sanctioned are First City Monument Bank Plc, United Bank for Africa Plc, Citibank, Ecobank Nigeria, First Bank of Nigeria Limited, Guaranty Trust Bank Plc, Keystone Bank Limited, Skye Bank, Stanbic IBTC Bank, Union Bank Plc and Wema Bank Plc.
Okorafor, however, stated that the sanction would be lifted immediately any of the affected banks showed evidence of significant utilization of the funds allocated to them under the SME window.
As an incentive, he said banks that had utilized their SME funds were allocated all of the $100m sold at Tuesday’s wholesale auction.
He urged all stakeholders to play by the rules for the benefit of the entire country and its economy.
The statement read in part, “Following persistent complaints that some Deposit Money Banks have deliberately frustrated efforts by many SMEs to access forex from the new window created by the CBN, the apex bank on Tuesday, May 2, 2017, barred all but eight banks from dealing in the SME wholesale forex window.
“The financial regulator took the decision to bar the erring 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 frowned at the action of banks that declined to sell foreign exchange to the SMEs to enable them to import eligible finished and semi-finished items despite the availability of Forex from the CBN wholesale intervention window.
“The banks not barred include Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank.”
The CBN in the statement warned that it would “not sit back and allow any form of instability in the inter-bank Forex market through the actions of institutions or individuals.”
SOURCE: http://punchng.com/forex-cbn-bars-16-banks-from-sme-window/
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