CBN Tightens FX Rules, Slaps N100 Million Fine on Banks Over Non-Compliant Transactions
The Central Bank of Nigeria (CBN) has rolled out a major overhaul of its foreign exchange regulations, introducing a tough new penalty regime that includes a N100 million fine for banks that process FX transactions without proper documentation. The update, contained in the newly released Fourth Edition of the Foreign Exchange Manual, marks the first comprehensive revision in nearly a decade.
According to the apex bank, the reforms are aimed at restoring confidence in Nigeria’s foreign exchange market by improving transparency, tightening oversight, and ensuring that FX flows are properly tracked. The CBN also introduced an additional penalty of N10 million for every affected transaction linked to non-compliance, signaling a stricter enforcement era for financial institutions.
Beyond fines, the updated framework places stronger obligations on banks, including mandatory daily reporting of FX transactions, stricter verification of customer documentation, and compliance with net open position limits. Institutions that exceed approved exposure levels may face escalating sanctions, including suspension from the Nigerian Foreign Exchange Market after repeated violations.
The rules also significantly affect importers and exporters. Importers must now process Form M through authorised banks and submit complete documentation within 90 days, while repeated violations could lead to FX access restrictions ranging from 90 days to a full ban. Exporters are also required to repatriate proceeds within 90 to 180 days depending on the sector, reinforcing tighter capital flow controls.
In addition to enforcement measures, the CBN introduced operational reforms such as increasing allowable advance payments for imports to 30% of FOB value and removing charges for Form NXP processing. The bank says the updated manual is designed to align Nigeria’s FX system with global standards, reduce market abuse, and support long-term economic stability.
source: The Guardian