The move, it was gathered from a very reliable central bank source, is targeted at reducing growing pressure on the country’s foreign reserves, which have fallen in the past few weeks in lockstep with the exchange rate of the naira at the parallel market.
Nigeria’s foreign reserves stood at $29.597 billion on December 7, according to data on the central bank’s website.
In place of cash, the central bank is considering introducing prepaid electronic cards that will stem the sale of cash by currency dealers to their customers, the source disclosed yesterday.
The CBN last week suspended about 1,600 BDC operators from participating in its weekly forex auction. The regulator’s hammer fell on the currency dealers over their failure to render appropriate returns on the sale of dollars.
The CBN recently warned banks and the forex dealers to ensure that they render proper returns on the dollars purchased from its official window or they would be sanctioned. Most of those affected were firms that gave false bank verification numbers (BVN) of their customers.
Finding showed that the central bank also shut out a lot of operators from its auction this week. Presently, there are over 2,900 BDCs in the country.
“We are not selling dollar cash to a lot of BDCs because of the malpractices we observed and it might continue like that next week. But I must tell you that we are planning to reform the sector by introducing prepaid electronic cards.The CBN, in a recent circular, stated that it had observed that a number of the BDCs purchased foreign exchange from the CBN without rendering returns on its utilisation.
“So when they (BDCs) apply for dollars and have shown evidence of the BVN, the CBN through its auction, would transfer the foreign currency to the BDC’s account, but they won’t be able to withdraw cash.
“Effectively, if a customer applies for dollars, the BDCs would transfer the cash to the customer’s prepaid card,” the source explained.
Consequently, it gave pre-conditions to the BDCs before they could access forex from the CBN window.
It directed that the BDCs must produce rendition of returns on purchases from a preceding week through e-FASS and render physical returns on utilisation of the forex.
It revealed that the introduction of the BVN as a prerequisite for the purchase of forex by retail buyers had helped to check illegal transactions.
The CBN Governor, Mr. Godwin Ifeanyi Emefiele, recently confirmed that since the enforcement of the BVN rule on November 1, the number of BDCs seeking forex from the CBN for sale to retail buyers had crashed by 32 per cent. This, he said, was because the misapplication of forex and illegal transactions were no longer easy to perpetuate.
Credit: ThisDay
“In addition, all BDCs that purchased forex on November 25 without submitting their returns for the previous week ending November 20 should return the total amount purchased for the week to the Bank not later than November 26, 2015, failing which appropriate sanctions will be imposed,” the CBN said.The central bank has since the introduction of the BVN, as a requirement for dollar sales by BDCs last month, increased its searchlight on the sub-sector.
It revealed that the introduction of the BVN as a prerequisite for the purchase of forex by retail buyers had helped to check illegal transactions.
The CBN Governor, Mr. Godwin Ifeanyi Emefiele, recently confirmed that since the enforcement of the BVN rule on November 1, the number of BDCs seeking forex from the CBN for sale to retail buyers had crashed by 32 per cent. This, he said, was because the misapplication of forex and illegal transactions were no longer easy to perpetuate.
Credit: ThisDay
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