The Central Bank of Nigeria has introduced a N100 million penalty for banks that process foreign exchange transactions without adequate documentation, as part of a sweeping compliance regime unveiled in its newly released Foreign Exchange Manual.
Under the offences and sanctions section of the fourth edition of the manual, the apex bank stated, “Authorised dealers shall pay N100m in addition to N10m per transaction” for consummating foreign exchange transactions with inadequate documentation.
The sanction forms part of a broader framework aimed at tightening oversight of Nigeria’s foreign exchange market, strengthening compliance standards, and curbing abuses among authorised dealers and other market participants.
The revised manual, issued by the CBN’s Trade and Exchange Department in May 2026, is the first major update since 2018. It serves as a regulatory guide for banks, authorised buyers, exporters, investors, and members of the public participating in foreign exchange transactions.
According to the CBN, the manual seeks to promote transparency in foreign exchange inflows and outflows, establish clear documentation and reporting requirements, strengthen enforcement mechanisms, and support national economic priorities by ensuring foreign exchange is channelled to productive uses.
Beyond the N100 million sanction, the manual introduces a range of penalties for violations in the Nigerian Foreign Exchange Market.
Banks face suspension for exceeding limits
Banks that exceed their approved Net Open Position limits face escalating punishments. A first offender will receive a warning letter, while a second offence attracts a 10-working-day suspension from the foreign exchange market. A third violation will result in a 90-day suspension from the market.
The apex bank also tightened reporting obligations for authorised dealers. Banks are required to submit daily returns on foreign exchange transactions by 10 a.m. for the preceding day and monthly returns within five working days after month-end.
Under the new rules, late rendition of returns will attract a penalty of N500,000, while non-rendition carries a minimum fine of N5 million and an additional N500,000 for every day the violation continues.
The CBN further warned banks against reallocating foreign exchange funds without regulatory approval, stating that such actions could attract monetary fines, suspension of authorised dealership licences for at least six months, or outright licence revocation, depending on the severity of the breach.
Importers, exporters also targeted
Import-related transactions also received significant attention in the revised framework. The manual requires importers to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks. Importers who fail to comply will be restricted from conducting valid and non-valid foreign exchange transactions, including the processing of Form M applications.
First-time offenders will face a 90-day restriction, rising to 180 days for a second offence and 360 days for a third. A fourth violation will attract a complete ban from the foreign exchange market.
Where banks fail to report such defaults, they risk sanctions, including a warning and a N10 million penalty for each affected transaction.
For non-oil exports, proceeds must be repatriated and credited to exporters’ domiciliary accounts within 180 days of shipment, while oil and gas export proceeds must be received within 90 days. Exporters that fail to comply will pay a penalty equivalent to one per cent of the naira value of the outstanding proceeds, while banks that fail to ensure compliance will be fined 0.5 per cent of the outstanding amount.
CBN introduces operational reforms
In addition to the sanctions, the revised framework introduces several operational reforms designed to improve market efficiency. These include an increase in allowable advance payment for imports from 15 per cent to 30 per cent, the introduction of a permissible import shortfall or excess margin of plus or minus 10 per cent of the Cost and Freight value on Form M, and the removal of processing fees for Form NXP used for exports.
The CBN also introduced provisions covering service exports, technology-related remittances, Pan-African Payment and Settlement System transactions, non-resident investment accounts, and tuition fee remittances of up to $25,000 per semester for undergraduate and postgraduate studies abroad.
The apex bank said the reforms were developed after extensive consultations with banks, exporters, corporates, regulators, and development partners and are intended to support a transparent, rules-based, and market-oriented foreign exchange system.
According to the CBN, the revised manual is expected to improve compliance, reduce transaction bottlenecks, deepen market confidence, attract investment inflows, and strengthen the integrity of Nigeria’s foreign exchange market.
CBN Governor, Mr Olayemi Cardoso, earlier said the initiative reflected the apex bank’s commitment to strengthening macroeconomic stability and modernising Nigeria’s foreign exchange administration.
He said the revised manual became necessary following evolving global economic conditions, domestic structural adjustments, and ongoing reforms in Nigeria’s foreign exchange market.
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