Lawmakers To Probe Banks Over Non-Compliance With CBN Forex Directives

The Nigerian House of Representatives has directed its spotlight onto the banking sector’s handling of foreign exchange, issuing a directive to scrutinize compliance with Central Bank directives.

This initiative, spearheaded by Committees on Banking Regulations and Banking Institutions, comes amid growing concerns over commercial banks and financial institutions’ adherence to the Central Bank of Nigeria’s (CBN) regulations on Net Open Position Limits (NOP).

Speaker Tajudeen Abbas, presiding over the plenary session, emphasized the urgency of the matter, citing the critical importance of enforcing CBN policies aimed at curbing speculative activities and ensuring financial stability.

Member representing Ikorodu Federal Constituency, Babajimi Benson, delivered a compelling argument for action, highlighting the adverse effects of banks’ reluctance to adhere to CBN directives.

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“In the performance of this duty, the CBN is empowered to make regulations and give directives for commercial banks and certain financial institutions to implement,” Benson asserted, underscoring the regulatory authority vested in the central bank.

The House’s decision to convene an investigative hearing underscores a concerted effort to address the root causes of Nigeria’s economic challenges, particularly the rampant speculation and hoarding of foreign exchange by financial institutions. Benson’s call for legislative intervention resonated strongly, as he warned of dire economic consequences if banks continue to flout CBN directives.

“This astronomical rise has been caused by diverse market forces and certain economic policies adopted by the government, including the liberalization of the dollar,” Benson remarked, pointing to broader economic factors exacerbating the situation.

With the House’s unanimous endorsement of the motion and the mandate given to the Committee on Legislative Compliance to ensure full implementation, a clear message has been sent to the banking sector: compliance with CBN regulations is non-negotiable.

As Nigeria navigates its economic challenges, the spotlight on banking practices reflects a commitment to accountability and stability in financial markets.