CBN Fines Four Banks N5.87bn over Illegal Forex Deals
The Central Bank of Nigeria, CBN has disclosed that it has placed sanction on four banks for N5.87 billion for “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006”
The banks affected are Standard Chartered Bank N2, 470, 604, 767.13, Stanbic IBTC Nigeria was fined the sum of N1, 885, 852, 847.45, Citibank was slammed with the sum of N1, 265, 541, 562.31 and lastly, Diamond Bank was ordered to pay the least, N250m.
This was disclosed by the Apex Bank on Wednesday in a statement by the CBN Director, Corporate Communications, Isaac Okorafor.
He said that “the actions of the apex bank became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.”
“The CBN has therefore asked the Managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria.”
In a further disclosure, the CBN spokesman explained that the decision was made after a thorough investigation into the allegation, adding that the bank had directed the affected banks to refund the money back to the Apex Bank immediately.
He said further: “the investigations revealed that the sum of $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs. Similarly, he said the sums of $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively during the period 2007 and 2015.”
The CBN said its investigation further revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest-free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the company.
Mr. Okorafor advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations of Nigeria in their foreign exchange transactions.
He warned that failure by the management of banks and companies to abide by the existing guidelines would be appropriately sanctioned, which sanctions may include denial of access to the Nigerian foreign exchange market.