The Central Bank of Nigeria (CBN) has unveiled stricter compliance measures in the foreign exchange market, introducing a N100 million penalty for banks that process foreign exchange transactions without adequate documentation.
The directive is contained in the newly released Fourth Edition of the Foreign Exchange Manual, which serves as the regulatory framework guiding foreign exchange operations in Nigeria.
Under the revised guidelines, authorised dealer banks found to have completed foreign exchange transactions without proper supporting documents will face a N100 million fine, in addition to a N10 million penalty for each affected transaction.
According to the CBN, the updated manual is designed to strengthen regulatory oversight, improve accountability, curb market abuses, and enhance transparency and confidence in Nigeria’s foreign exchange market.
The new framework imposes stricter documentation requirements across a broad range of transactions, including spot trades, forward contracts, swap arrangements, imports, and exports. Banks are now required to verify and retain all relevant supporting documents before processing customer foreign exchange requests.
For import transactions, the manual maintains requirements such as Form M registration, certificates of origin, invoices, packing lists, and shipping documents. Importers are also expected to submit Exchange Control Documents within 90 days of negotiating shipping documents through overseas correspondent banks.
The CBN further outlined escalating sanctions for non-compliance. First-time offenders may face a 90-day restriction from participating in foreign exchange transactions, while repeated violations could attract restrictions of up to 360 days. A fourth breach may result in a complete ban from foreign exchange dealings.
In addition, banks that fail to report documentation defaults to the apex bank will be sanctioned under the revised regulatory framework.
The manual also introduces tougher penalties for other market infractions. Institutions that fail to submit mandatory daily or monthly returns risk fines ranging from N500,000 for late submissions to a minimum of N5 million for non-submission, with additional daily penalties for continued violations.
Banks that exceed approved Net Open Position limits will face progressive disciplinary measures, including warnings and temporary suspension from the Nigerian Foreign Exchange Market.
The CBN stated that the revised manual forms part of its broader strategy to create a more transparent, efficient, and rules-based foreign exchange market capable of attracting sustainable investment and strengthening market confidence.
