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Banks Expose Clients with Suspicious Dollar Transactions

In line with the resolve of the Central Bank of Nigeria (CBN) to halt a regime of arbitrage in the foreign exchange market, some Nigerian banks have started exposing the identities of customers, who allegedly obtained dollars by false pretence, and traded them at a profit in the parallel market.

This is coming as the aggregate broad money supply, M3 Money, which represents the amount of money circulating in the economy, rose to N44.56 trillion in January, representing a 1.70 per cent growth year-to-date, a report by the CBN, has shown.

Some bank customers have been taking advantage of the lucrative 37 per cent differential between the official and black market exchange rates by obtaining the dollar at the official rate of about N416, only to subsequently sell in the unauthorised market at a more expensive average rate of about N570.

These customers can beat regulations by presenting false travel documents, prompting the apex bank to direct banks to notify their customers of an impending crackdown on saboteurs in the forex market.

However, a report by Bloomberg yesterday revealed that some banks have begun to implement the CBN’s directives by publishing the names of clients found to have filed suspicious claims for forex transactions on their websites last week.

For instance, Zenith Bank Plc, the nation’s biggest lender by market value, has published 987 names of customers engaging in the illegal practice on its website, Fidelity Bank Plc identified 83 customers; First City Monument Bank Plc listed eight names so far, while Wema Bank published one name. The list of banks that complied also included the United Bank for Africa Plc.

The apex bank had directed banks to identify such customers and ensure they refund the hard currency. The regulator first alerted banks of the ongoing practice last year.

The CBN had said: “Consequently, further to the various measures already put in place, all banks are hereby directed to publish on their websites the names and BVN of defaulting customers who present fake travel documents or cancel their tickets and fail to return the purchased PTA/BTA within two weeks as stipulated in the customer declaration form signed by them.”

Some deposit money banks acting on the directive of the CBN had sent notices to their customers warning that identities and Bank Verification Number (BVN) of those who contravene the apex bank’s new forex policy on overseas personal and business travels would be published.

The CBN had also directed that travellers who buy foreign exchange from banks for travel purposes but fail to embark on the trip after two weeks of their scheduled travel date must return the forex to the banks.

The banks in their notices also pointed out consequences for those customers who engage in fraudulent and unethical practices with regards to the purchase of Personal Travel Allowances (PTA) and Business Travel Allowances (BTA).

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