CBN orders banks to process retail forex demand within 24 hours

Image result for emefiele



The Central Bank of Nigeria (CBN) yesterday ordered banks to process foreign exchange demand for Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) in all their branches within 24 hours.


The CBN gave this order in a circular to all banks signed by the Director, Financial Markets Developments, Mr. Alvan Ikoku.

Titled, “Update to Foreign Exchange Directives”, the circular stated: “In view of the CBN’s willingness, capability, and determination to meet FX demand in the market, and in order to further increase foreign exchange availability to all end-users and ensure that a fair and verifiable exchange rate operates in the market, all banks are hereby directed as follows:

“Open a teller point for all retail FX transactions, including buying and selling, in all locations in order to ensure access to foreign exchange by their customers and other users, without any hindrance;

“All banks must have an electronic display board in all their branches, showing rates of all trading currencies, and customers must insist on processing FX transactions based on the displayed rates;

“Banks are mandated to process and meet the demand for travel allowances (PTA/BTA) by end-users within 24 hours of such application, as long as the end-users meet basic requirements already outlined in earlier directives; and banks are mandated to process and meet demands for school fees and medical bills within 48 hours of such application.

“Please note that this directive is effective immediately and non-compliance would attract sanctions including but not limited to being barred from all future CBN exchange intervention”.

In another development, the CBN has accused Other Financial Institutions (OFIS), namely microfinance banks, mortgage banks and envelopment financial institutions, of disregarding recommendations of examination reports.

This accusation was contained in letter to all other financial institutions by the Director, Other Financial Institutions Supervision Department, CBN, Mrs. Tokunbo Martins.

Titled: “Immediate adoption of examiners’ recommended provision and audit adjustments by the OFIs,” stated: “Upon the receipt of the Routine Examination Report from the Central bank of Nigeria (CBN) or the Nigeria Deposit Insurance Corporation (NDIC) by the OFl, it is required that the board of each OFI deliberates upon the Report and give an undertaking that the recommendations therein will be implemented. A similar treatment is expected for audit adjustments emanating from annual audit exercise following consideration and approval of the Audited Accounts by the Board.

“We have, however, observed that most of the OFls neither adopt the Examiners’ recommended provision for loan losses and other known losses nor pass the audit adjustments in their books, thus causing a discrepancy between the provisions in the Examination Report, the Monthly/Quarterly Returns rendered to the CBN and the Audited Accounts.

“The major effect of this practice is that data is distorted as the shareholders’ funds unimpaired by losses in the Returns are consequently higher than the computed figure in the Examination Report and the approved Audited Accounts giving a misleading impression of the true state of affairs of the OFI.

“Furthermore, reliance on this inaccurate data inhibits the ability of the Central Bank in effective policy formulation and decision making for the OFI sector. To address this unwholesome practice, all OFIs are directed to: Immediately pass all necessary entries i.e. audit adjustments and/or Examiners’ recommended provision in the latest Examination Report. These entries should be passed into their ledgers and should also be reflected in the next monthly returns to be sent to the CBN;

“Ensure that subsequent audit adjustments (if any) and Examiners’ recommended provisions in future Examination Reports are adopted immediately the Reports are received and deliberated upon by the board of the OFI and reflected in the next Returns after the receipt of the Report. Note that failure to comply with the above directives will attract appropriate sanction as applicable to the type of the OFI. Please be guided accordingly.”

-Vanguard

Comments

Popular posts from this blog

Pastor Paul Adefarasin's teaching on Tithing That Led To The Shutting Down Of Daddy Freeze IG Account

INNOSON VS GTB: Detailed Analysis Of The Saga Between Innoson Motors and GTBank/EFCC.......