CBN deploys mystery shoppers to check FX abuse in banks

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The Central Bank of Nigeria (CBN) has deployed mystery shoppers to commercial banks to guard against foreign exchange abuse by the lenders.
The CBN, Fidelity Bank Plc Managing Director Nnamdi Okonkwo said yesterday, is particular about ensuring that banks disburse funds meant for Business Travel Allowances (BTAs) and Personal Travel Allowances (PTAs), and school fees payment abroad to genuine foreign exchange end-users.
Many of the lenders, it was learnt, were are aware of the moves by the apex bank to punish any operator that violates the new forex rules.
The CBN has in the past two weeks pumped $1.2 billion into the foreign exchange market to stem liquidity challenges faced by businesses and individuals. Last Thursday, the regulator pumped $170 million into the foreign exchange market, as foreign reserves hit $30 billion. The bank offered $100,000,000 as wholesale interventions.
It gave $70,000,000 to meet requests for business and personal travel allowances.
Okonkwo, who spoke at a news conference organised by the Chartered Institute of Bankers’ of Nigeria (CIBN) ahead of the World Conference of Banking Institutes (WCBI) holding from April 24 to 28 in Lagos, said he was personally called by CBN Governor Godwin Emefiele when a customer reported one of his bank’s branches to the regulator. “I got a call from the CBN Governor, reporting a branch that failed to pay PTA to a customer. I quickly contacted the branch and was informed that the customer came with fake documents,” he narrated.
He said the CBN is doing everything possible to ensure that there are more dollar liquidity in the system and that all genuine forex demands were met.
Mystery shoppers are used by watchdog organisations to perform specific tasks such as purchasing a product, asking questions, registering complaints or behaving in a certain way, and then provide detailed reports or feedback about their experiences to the regulator.
Okonkwo said that banks have cleared backlog of school fees, PTA, BTA and medicals after the CBN channeled huge dollar disbursements to the lenders.
When contacted, CBN Spokesman, Isaac Okorafor, said he would not comment on discussions between CBN Governor and Fidelity Bank chief, but disclosed that the apex bank was effectively monitoring dealers and participants in the forex market. He said that any dealer or market participant caught undermining the forex process and policies will be severely sanctioned.
He said that in line with CBN’s objective to continuously and to vigorously pursue a transparent, liquid, and efficient forex market, it would neither tolerate unscrupulous actions nor hesitate to bring serious sanctions on offenders, be they banks or their employees.
He therefore urged market participants to assist in ensuring that these new measures engender the preservation of our external reserves, stability of our financial system and growth of our economy to the benefit of all Nigerians.
Okorafor also cautioned dealers in foreign exchange not to engage in any unwholesome practice that is detrimental to smooth operations in the market, warning that the CBN would impose heavy sanctions on any organization or official involved in such act.
A statement earlier sent by the CBN said: “Having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, the CBN would immediately begin to provide foreign exchange to all commercial banks to meet the needs of both personal travel allowances (PTA) and business travel allowances (BTA) for onward sale to customers.
“All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.”
According to the CBN, the needs of parents, guardians and sponsors to make payments of school and educational fees for their children and wards would be met under the new dispensation. It, however, stated that such payments must be made by commercial banks directly to the institution specified by the customer.
The CBN has promised to ensure that the process is as smooth as possible and that as many customers as possible get the foreign exchange on genuine demands.
In order to further increase the availability of forex to all end-users, the CBN has decided to significantly reduce the tenor of its forward sales from the current maximum cycle of 180 days to 60 days from the date of transaction.
In order to further ease travellers’ burden and ensure that transactions are settled at much more competitive exchange rates, the CBN also directed all banks to open forex retail outlets at major airports as soon as logistics permit.
Okorafor said the apex bank has started the implementation of its articulated programme to clear all the unfilled orders in the interbank forex market. He said that given CBN’s plan to meet all unfilled orders, “provision of forex to the manufacturing sector would remain the CBN’s strong priority. We will no longer impose allocation/utilisation rules on commercial banks, and also implement an effective intervention programme to support the inter-bank market to ensure adequate liquidity necessary to deliver an efficient forex market.”

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