CBN Fines Standard Chartered Bank N2bn for FX Infraction

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  •  Meets BDCs over rates convergence

Obinna Chima

The Central Bank of Nigeria has fined Standard Chartered Bank N2billion for foreign exchange infraction, an authoritative source told Thisday wednesday.

The bank, according to the source, drew the apex bank’s anger for buying $25million at the official rate and selling same way above the inter-bank market rate.

Apart from the hefty fine, the commercial bank’s treasurer is also said to have been suspended by the apex bank that has been battling to rein in unwholesome banking industry practises that have engendered a huge differential between the inter-bank and parallel market rates.

As part of its efforts to bridge the wide gap between the interbank and the Bureau De Change (BDC) segments of the foreign exchange (FX) market, the apex bank, the State Security Service (SSS), the Nigeria Police Force (NPF) and the Bureau De Change Operators (BDCs) also met yesterday over the need for the BDCs to adhere to the rules governing foreign exchange transactions.

A reliable source, who attended the closed-door meeting, said the federal government was concerned about the disparity in the FX rate among the three markets.

According to the source, the CBN and the security agencies present at the meeting made the BDC operators to understand that a lot of foreign investors are not comfortable with the wide gap between the three arms of the FX market and would only come in if the situation is addressed.

Therefore, it is anticipated that the initiative would encourage the inflow of FX from foreign portfolio investors.

The President, Association of Bureau De Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, who confirmed the development in a phone interview yesterday, said his members had pledged to cooperate with the government.

He explained: “We were told to follow the rules and make sure we cooperate with them. We have agreed to carry our members along on that, in ensuring that compliance is strictly observed. We have been sensitising our members and we have been holding meetings.

“We want to have same regulation that is happening within the banking industry for BDCs. If you go to any bank, you see the FX rates written boldly. So, we have promised the government that we would adhere to the rules. So, we are looking at a rate between N390/$ and N400/$. That is, we buy at N390/$ and sell at N400 to retail customers.”

He said the initiative was to make the parallel market unattractive.

“We already have a Rate Regulation Committee and we have an Enforcement and Surveillance Committee as well as a Sensitisation Committee. So, our business is now under strict surveillance by the security agencies and we have to protect it,” the ABCON president added.

THISDAY, however, learnt last night that some BDC operators who were caught selling FX above the stipulated limit were arrested by security agencies, both in Lagos and Abuja. Those arrested would be prosecuted in order to discourage others from flouting the FX regulations as well as the federal government’s objective.

A top executive of ABCON, who said he was not aware of the arrest, declined to comment on the exact number of BDC operators arrested.

Meanwhile, the naira reacted positively to the development on the parallel market as it appreciated to N460 to the dollar yesterday, stronger than the N465 to the dollar it closed the previous say. On the interbank FX market, the spot rate of the naira closed at N307.76 to the dollar yesterday, just as it went for N385 to the dollar on the BDC segment.

In a related development, the stock market reacted negatively to the news of Donald Trump’s election as US president. Specifically, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 0.72 per cent to 26,173.69, while market capitalisation shed N65.6 billion to close at N9.0 trillion.

Although the market has been bearish in the past six trading days, operators said the surprising victory of Trump must have further dampened investors’ confidence.

“We acknowledge the possibility that the surprise victory of Trump in the US presidential election could potentially further dampen sentiments, as investors weigh the potential impact on the country given the close trade relationship between Nigeria and the US,” analysts at Meristem Securities Limited said.

The global markets were calm as the S&P 500, Dow Jones, and Nasdaq stock indexes in the US were little changed after the first hour of trading.

The pre-open future markets forecast dramatic sell-offs when Trump’s lead became clear overnight.

Share traders had expected Hillary Clinton to beat Mr. Trump to become the next US president on the back of polling forecasts.

UK and European stock markets have made early losses, with money flowing into safe haven stocks, gold and currencies including the yen.

The UK’s FTSE 100 index initially dropped two per cent before recovering its losses to show a gain of 0.8 per cent in afternoon trading.

France’s Cac index and Germany’s Dax were back in positive territory after erasing losses of more than two per cent.

  • vic

    CONGRATULATIONS MR CBN GOVERNOR, GODWIN EMEFIELE, FOR RANDOM AND PERHAP, SELECTIVE SPOTTING OF THE STANDARD CHARTERED BANK FOR THIS KIND OF FOREX FRAUD WHICH, WITHOUT ANY EXCEPTION, IS THE HALLMARK OF ALL COMMERCIAL BANKS IN NIGERIA UNDER YOUR SO-CALLED SUPERVISION.

    MR EMEFIELE, TAKE YOUR CBN RESPONSIBILITIES SERIOUSLY AS A CBN GOVERNOR AND AND INVESTIGATE EACH AND EVERY COMMERCIAL BANK IN NIGERIA INCLUDING THE FIRST BANK OF NIGERIA WHO ARE COMMITTING THE SAME KIND OF FOREX FRAUD. THEY ARE ALL GUILTY WITHOUT EXCEPTION AND I HAVE A BLACK AND WHITE PROOF OF THIS WITH WHICH I WILL EXPOSE YOU, MR EMEFIELE.

    FOR YOUR OWN SECURITY, HURRY UP TO INVESTIGATE EVERY COMMERCIAL BANK IN NIGERIA AND MAKE YOUR FOREX FRAUD INVESTIGATIONS PUBLIC FOR US TO VERIFY.

  • vic

    IN NIGERIA, ALL COMMERCIAL BANKS ARE FOREX FRAUDULENT WITH FIRST BANK OF NIGERIA AT THE TOP OF THE LIST AND MR GODWIN EMEFIELE THE CBN GOVERNOR KNOWS IT WELL. THESE COMMERCIAL BANKS COMMIT FOREX FRAUD UNDER HIS WATCH AND SUPERVISION AND WITH HIS BLESSINGS.

    UNDER THE CIRCUMSTANCE, EITHER GODWIN EMEFIELE IS AIDING AND ABETTING FOREX FRAUD, OR IS SIMPLY STUPID OR JUST INCOMPETENT TO HANDLE THE FOREX FRAUD IN THESE BANKS. HE DESERVES BOOTING OUT FROM THE CBN AND REPLACED BY A WELL QUALIFIED AND EXPERIENCED ECONOMIST WHO KNOWS HOW TO MANAGE AND DIRECT THE ECONOMIC AFFAIRS OF THIS COUNTRY. THIS FOREX FRAUDSTER IS THE FOREX HOUSEBOY OF BUHARI WHO IS KEEPING HIM IN THE CBN AS A GOVERNOR FOR THE CONVENIENCE OF HIS OWN FOREX LOOTING AND NOTHING MORE.

  • vic

    ELSE SO BDCS, YOU WILL YOURSELF, BECOME A PARALLEL MARKET (BLACK MARKET) BY ADOPTING THE FOREX RATE OF THE PARALLEL MARKET???

    WHAT IS THE DIFFERENCE THEN BETWEEN YOU AND THE PARALLEL MARKET??? ARE YOUR FOREX RATES THEN DRIVEN BY THE BLACK MARKET??? WHY???? WHY IS IT CONVENIENT FOR YOU TO ATTACH YOURSELVES WITH THE BLACK MARKET IF NOT TO IRRESPONSIBLY MAXIMISE YOUR FOREX GAINS BY LOOTING YOUR UNSUSPECTING CUSTOMERS???

    YOU MUST NOT CHARGE YOUR CUSTOMERS MORE THAN PLUS MINUS 10 NAIRA FROM THE INTER-BANK RATE OF N300 OR THEREABOUT TO A DOLLAR

    IT IS CLEAR FROM THIS THAT IT IS THESE BDCS WHICH ARE A CENTER OF FOREX FRAUD IN NIGERIA TODAY, IN AGREEMENT WITH THE ECONOMIC ILLITERATE CBN GOVERNOR, GODWIN EMEFIELE. MR EMEFIELE HAS LOST ALL CONTROL AND DIRECTION OVER THE FOREX ACTIVITIES OF THE COMMERCIAL BANKS AND BDS IN NIGERIA DESPITE COLOSSAL AMOUNTS OF DOLLARS TO THE TUNE OF 20 BILLION DOLLARS BEING REMITTED TO NIGERIA BY THE DIASPORA.

    SO LONG AS THIS CBN GOVERNOR REMAINS THE GOVERNOR OF THE CENTRAL BANK, THERE IS NO HOPE IN HELL THAT FOREX PROBLEMS FOR THE DIASPORA MAINLY CREATED BY HIM THROUGH HIS LAXITY AND LACK OF PROPER SUPERVISION AND CONTROL OVER FOREX POLICIES WILL DIMINISH ANYTIME SOON. UNDER THE CIRCUMSTANCE, THE NATIONAL ECONOMY AND THE VALUE OF OUR NATIONAL CURRENCY , NAIRA, WILL CONTINUE TO GO DOWN INTO THE DRAIN.

    CBN GOVERNOR, GODWIN EMEFIELE MUST BE SACKED DUE HIS INCOMPETENCE TO HANDLE FOREX POLICIES PROPERLY CAUSING IMMENSE HARDSHIP TO NIGERIANS IN DIASPORA WHO , CURRENTLY, ARE NOT BEING ALLOWED TO USE THEIR INTERNATIONAL NAIRA DEBIT CARDS IN FOREIGN COUNTRIES TO PAY THEIR SCHOOL FEES AND OTHER NECESSARY EXPENSES.

    CLEARLY, TODAY, CBN GOVERNOR, GODWIN EMIFIELE, REMAINS AT THE CENTER OF FOREX FRAUD AND EVERYTHING THAT IS WRONG WITH OUR ECONOMIC AND FOREX POLICIES IN NIGERIA.

    MR EMIFIELE, MUST BE SACKED HENCEFORTH TO PREVENT ANY FURTHER ECONOMIC AND FOREX DISASTER FOR NIGERIA AND NIGERIANS.

  • Wikileaks

    Standard Chartered Bank is a fraudulent bank. I closed my domiciliary account with them (Ajose Adeogun V.I. Branch) six years ago because of illegal and fraudulent deductions from my account. They promised to refund my money illegally deducted, but they never did and even continued to make wrongful and illegal deductions. It is a fraudulent bank.

  • Republican in VI

    This should have been done a year ago.