By Elizabeth Chukwuma
Between August and now, Godwin Emefiele led Central Bank of Nigeria, have beamed its search light on the Banks, BDCs and MFBs, over the sale of Foreign Exchange, thus coming out with policies that would give it an opportunity to effectively control, these Financial Institutions in the sale of forex, across the country.
The latest of such forex policies was the directive to the Money deposit Banks, MDBs ‘’to publish to publish the names of customers and their BVN, who had had violated the rules of purchasing Personal Travelling Allowance, PTA and Basic Travelling Allowance, BTA. Note that he first of such forex policy measures was the ban on the sale of forex to the Bureau de Change, BDCs, operators .this was quickly followed by a warning to the Microfinance, Banks, MFBs, operators, to stop selling, forex to customers.
The three forex policy measures appear to have made business unusual for the travelling public and Companies because of the difficulties being encountered in the recent time to purchase PTA and BTA. The most worrisome of such forex policy measures of the CBN, was the directive to the Banks to publish the names of the customers and their BVN, on their website who had defaulted on the rules of the forex purchase on their website, for public consumption. This appear to have put fear on the Banks and thetheir customers that the Apex Bank might sanction them if they circumvent the rules in forex transactions. This may have forced the Banks to further block all the loopholes that have been exploited by Customers over the years to purchase PTA/BTA forex.
It is instructive to note that worried by the continued depreciation of the local currency, the naira, against the North American country of the United States, US, dollar, United Kingdom, UK, pounds sterling and the European, EURO, in the forex market and the need to stop the rot, the apex bank gave the money deposit banks, MDBs, a matching order to the Banks ‘’to publish the names and the BVN, of the fraudulent Customers on their website for failing to return the unused forex purchased from them.
The CBN circular on Tuesday, August 31, 2021, may have sent jitters down the spines of the bank officials and their PTA/ BTA, customers, who many believe actually use fake visas and cancel air tickets after getting forex for their trip. The circular titled ‘’Publishing of names of defaulters of CBN policy on the sale of Forex for PTA/BTA which was addressed to the banks was said to have been signed by one Haruna Mustafa, a CBN Director, in-charge of Supervision Department.
Indeed, the Apex Bank may have been forced to take the harsh decision because of the news making the rounds and which may have filtered to the ear of the officials about the sharp practices being perpetuated by some of these unscrupulous Bank Customers who had repeatedly circumvented the Bank policy on the Sale of Forex by diverting such funds to other Area instead of using for the purpose it was purchased from the Banks for: PTA and BTA.
Given an insider information on such fraudulent practices, Mustafa, the CBN Director who signed the circular, that was sent to the Banks on the latest Apex Bank forex policy,, had identified ‘’ the use of fake visas and cancellation of air tickets, after purchase of PTA/BTA’’ as a big fraud in the nation’s banking sector’’.
An aggrieved Mustafa, who may have spoken the mind of Emefiele, the CBN governor, had said that ‘’the trend if not curbed portends risk to the integrity and stability of the forex market’’. This may have informed why the Emefiele led Bank had said that in addition to the various measures already put in place to control the forex market, which include ‘’the banks are publishing on their website the names and BVN, of the defaulting customers who present such fake travel documents and cancel their air tickets but fail to return the purchased PTA and BTA, to do so within two weeks as stipulated in the customer declaration form that was said to have been signed by them’’. The bank further noted that ‘’publishing the names of the defaulting customers engaged in unwholesome practices will ‘’curb conducts aimed at circumventing the country’s forex policy’’.
Kingsley Uzoka, Group Managing Director, GMD, of the United Bank of Africa, popular, Pan African Bank, according to informed sources was the first of the Bank Chief Executives, CEO, to ensure that the Bank keep to its promise of updating its customers of the CBN directive to Banks ‘’to publish a list of PTA and BTA , defaulters on their website’’.
The Pan African Bank was said to have made the customers understand that those involved in fraudulent practices such as presenting fake visas or cancelling airline tickets after receiving PTA/BTA, and failing to return the funds received to the Bank within two weeks would have their details, which include their names and BVN, published to their website. The Bank, which put customers first, in its operations, was said’’ to have encouraged them ‘’to please adhere to all the Apex Bank guidelines as directed to avoid sanctions’’.
The Bank , has made it clear to those that cares to listen that it will continue to implement the CBN , forex policy to the later , noting that ‘’it is committed to partnering with the apex bank to ensure a transparent , efficient and stable forex market that meets the needs of all legitimate users’’.
The message was very clear to customers.’’ If you fail to return the unused PTA/BTA, to the bank as directed by the CBN, you will face sanctions’’. The sanctions, according to informed sources include being barred from the processing forex from the official market in the future, restrictions on their bank Accounts for such periods as may be determined by the apex bank as well as possible criminal prosecution.
‘‘False application and use of fake documents to purchase PTA/BTA is strictly prohibited and is a financial crime punishable under the relevant laws in Nigeria’, the CBN had said. The Value News sighted some of the customers who had failed to return their used PTA/BTA, purchased at the Bank Headquarters, Marina, Lagos, last Friday who may have come make further inquiries on how to go about the payment to escape the CBN sanctions. Some of them, who may have put the PTA/BTA, purchased from the Banks into the BDC, business, were said to have returned it to the Bank, to avoid their names and BVN, being made public as forex defaulters.
The CBN, new forex policy, may have forced the Zenith Bank, under the close watch of Ebenezer Onyeagwu to have urged urged’’ individuals and Business Representatives to walk into any of the bank branches across the country to purchase their PTA or BTA, at the following exchange rates, USD at N358 /$, EUR at N405.1/ EUR and GBP at N468..78/#’’. Many of the customers were said to complied to Onyeagqwu, the Bank’s CEO, advice to walk into any of the Bank branches , across the country, particular, the major cities, to buy their PTA /BTA, forex.
Last August, the Apex Bank, had banned Microfinance Banks from dealing on forex transactions as part of the policy measures to stabilise the nation’s forex market. Ibrahim Tukur, the Bank Director, Financial Policy and Regulation Department who was said to have broken the news in a circular titled , ‘’ Cessation of Non-Permissible activities by Microfinance Banks had threatened ‘’to punish MFBs that fail to heed the warning’’.
Tukur, the CBN Director, had made the MFBs, operators to know that some of them have gone beyond the permit of their operating Licenses by engaging in Non-Permissible activities, particular, forex transations, which is the exclusive responsibility of the money deposit Banks. He had said that given the low Capitalisation of the MFBs, dealing in forex transactions was a significant risk with dire Consequences for the country’s financial system stability.
The BDC, Operators were not spared. The BDCs, have also been banned from participating in the official forex market that would have given the operators the opportunity to buy forex directly from the CBN d, and sell to their customers.
Describing them as greedy, Emefiele, the CBN, governor, was said that the apex Bank, will no longer sell forex to the BDCs. He noted the BDCs, have suddenly become wholesale dealers in forex to the tune of millions of dollars per transaction. His major worry was that the BDCs, to cover over up their frauds, use ‘’fake documentations like passport numbers, BVN, Boarding Passes and flight tickets to render weekly returns to the CBN.
Many believe that the BDCs, may have taken advantage that the apex Bank sells Forex directly to them to grow in lips and bounds.. The CBN, governor, may have shocked Nigerians when he disclosed that the BDCs had risen from 74 operators in 2005 to ,3000, as at 2020, with about 150 new BDCs applications coming to the Bank every month, seeking approval with the same promoter owning multiple BDC outlets.
Until the Apex Bank banned the sale of forex to the BDCs, an informed source told The Value News the CBN sells $60,000 to each BDC per week, which translates to $6167 million per week and 8.6 billion per annum. The forex sale to each BDC, was said to have been reduced to $10,000 per week because of the depletion of forex made available for sale per week because of the drop of oil price in the International oil market which translates to about $28.4 million per week or $476 million , per year, before it was finally stopped. The Apex Bank, expects the BDCs, to source their forex, for sale to their Customers from the autonomous market.