Banks Face N100m Penalty for Forex Violations

The Central Bank of Nigeria (CBN) has introduced a N100 million penalty for banks that process foreign exchange transactions without adequate documentation, as part of a revised compliance framework contained in its newly released Foreign Exchange Manual.

The sanction was outlined in the fourth edition of the manual, which serves as a regulatory guide for banks, authorised dealers, exporters, investors, and other participants in Nigeria’s foreign exchange market.

According to the apex bank, authorised dealers found consummating foreign exchange transactions with insufficient documentation will face a N100 million fine in addition to a N10 million penalty for each affected transaction.

The revised manual, released by the CBN’s Trade and Exchange Department in May 2026, represents the first major review of the framework since 2017 and is aimed at strengthening transparency, compliance, and accountability in the foreign exchange market.

Beyond the N100 million sanction, the framework introduces stricter penalties for several categories of violations. Banks that exceed approved Net Open Position limits will face escalating sanctions ranging from warning letters to temporary suspension from the foreign exchange market.

The CBN also tightened reporting requirements, directing banks to submit daily foreign exchange transaction returns by 10 a.m. for the previous day and monthly returns within five working days after month-end.

Failure to comply will attract penalties, including a N500,000 fine for late submission of returns and a minimum N5 million penalty for non-submission, alongside an additional N500,000 daily fine for continuing violations.

The apex bank warned that unauthorised reallocation of foreign exchange funds could result in monetary sanctions, suspension of authorised dealership licences, or outright licence revocation, depending on the severity of the offence.

Importers were also affected by the new measures. The manual requires Exchange Control Documents to be submitted within 90 days of negotiating shipping documents. Defaulters risk restrictions from foreign exchange transactions, with penalties increasing for repeated violations and culminating in a complete market ban after a fourth offence.

For exporters, non-oil export proceeds must be repatriated within 180 days, while oil and gas export proceeds must be received within 90 days. Failure to comply attracts financial penalties for both exporters and banks.

The revised framework also introduces operational reforms, including increasing allowable advance payment for imports from 15 per cent to 30 per cent, removing processing fees for export Form NXP, and simplifying certain remittance procedures.

CBN Governor, Olayemi Cardoso, said the reforms reflect the bank’s commitment to strengthening macroeconomic stability, improving transparency, and modernising Nigeria’s foreign exchange administration.