CBN IMPOSES N100M PENALTY ON BANKS FOR IMPROPER FOREX DOCUMENTATION IN NEW FX MANUAL
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By Aishat Momoh. O.
The Central Bank of Nigeria (CBN) has introduced a N100 million penalty for banks and authorised dealers that process foreign exchange transactions without adequate documentation, as part of a comprehensive compliance and enforcement framework contained in its newly released Foreign Exchange Manual.
The sanction was outlined in the offences and sanctions section of the fourth edition of the manual issued by the CBN’s Trade and Exchange Department in May 2026.
According to the apex bank, authorised dealers found culpable of processing inadequately documented foreign exchange transactions will pay a N100 million fine in addition to N10 million per transaction involved.
The revised manual, which represents the first major update since 2017, serves as a regulatory guide for banks, authorised buyers, exporters, investors and other participants in Nigeria’s foreign exchange market.
The CBN said the review was designed to strengthen transparency in foreign exchange inflows and outflows, establish clearer reporting obligations, tighten enforcement mechanisms and ensure foreign exchange resources support productive economic activities.
Under the new framework, banks that exceed approved Net Open Position limits will face progressively stricter sanctions. A first violation will attract a warning letter, a second offence will result in a 10-working-day suspension from the foreign exchange market, while a third violation will attract a 90-day suspension.
The apex bank also reinforced reporting requirements for authorised dealers, mandating daily returns on foreign exchange transactions by 10:00 a.m. for the preceding day and monthly returns within five working days after month-end.
Failure to comply with reporting obligations will attract penalties ranging from N500,000 for late submission to a minimum of N5 million for non-rendition, with an additional N500,000 charged for every day the breach continues.
The manual further prohibits banks from reallocating foreign exchange funds without regulatory approval, warning that such actions may attract monetary penalties, suspension of authorised dealership licences for at least six months, or outright licence revocation depending on the severity of the infraction.
Import transactions also received stricter regulatory attention. Importers are now required to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks.
Failure to comply will attract restrictions from conducting foreign exchange transactions, including processing Form M applications. First-time offenders will face a 90-day restriction, which increases to 180 days for a second violation and 360 days for a third offence, while a fourth violation will result in a complete ban from the foreign exchange market.
Banks that fail to report importer defaults risk additional sanctions, including a N10 million penalty for each affected transaction.
For exporters, the CBN maintained strict repatriation timelines, requiring non-oil export proceeds to be credited to exporters’ domiciliary accounts within 180 days of shipment, while oil and gas export proceeds must be repatriated within 90 days.
Exporters who fail to comply will pay a penalty equivalent to one per cent of the naira value of outstanding proceeds, while banks that fail to enforce compliance will be fined 0.5 per cent of the outstanding amount.
The revised manual also introduced reforms aimed at improving market efficiency, including increasing allowable advance payment for imports from 15 per cent to 30 per cent, introducing a permissible import variance margin of plus or minus 10 per cent of Cost and Freight value on Form M, and removing processing fees for Form NXP used in export transactions.
Additional provisions cover service exports, technology-related remittances, Pan-African Payment and Settlement System transactions, non-resident investment accounts, and tuition remittances of up to $25,000 per semester for students studying abroad.
The CBN also removed the mandatory requirement for Form A for remittances funded through ordinary domiciliary accounts, although banks are still required to verify the legitimacy and purpose of such transactions.
According to the apex bank, the reforms followed extensive consultations with financial institutions, exporters, regulators and development partners and are expected to improve compliance, reduce transaction bottlenecks, deepen investor confidence and strengthen the integrity of Nigeria’s foreign exchange market.
CBN Governor, Olayemi Cardoso, said the initiative reflects the bank’s commitment to strengthening macroeconomic stability and modernising foreign exchange administration in line with evolving global and domestic realities.
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