CBN begins probe of banks' forex deals today, Friday, 13 Apr 2012  
 

 

(The Nation)   The Central Bank of Nigeria (CBN) will today launch an investigation into banks' foreign exchange transactions.The Nation learnt that the probe, expected to last for one month, involves all the 20 banks in the country.  The investigation, which is routine, according to sources, is in line with the apex bank's Risk-based Supervision and will involve only the officials of the CBN.The  system is intended to be pro-active as the previous compliance-based examination does not have the capacity to detect risk-based issues.It was originally part of the 13-point agenda of the former governor of CBN, Prof Chukwuma Soludo, but it was not implemented before he left office.Under the arrangement of the exercise, the examiners are expected to work closely with banks to understand the nature of their businesses and categorise the risks associated with it.In banking parlance, routine examination is conducted twice a year by the CBN in collaboration with the Nigeria Deposit Insurance Corporation (NDIC).

Other types include special or target exams, which are meant for a specific purpose and maiden examination, which is conducted six months after a new bank, has been established. The banking watchdog had launched a special examination into banks' foreign exchange transactions late last year to verify their huge demands at the forex market. The results of the audit, according to sources,  had since two weeks ago been made available to the Managing Directors of the respective banks and those that contravened   have been sanctioned by the CBN. Twenty-one banks were examined. In the first batch were banks that are top foreign exchange players. These are Stanbic IBTC, CityBank, Standard Chartered Bank, Guaranty Bank, Zenith Bank, United Bank for Africa (UBA) and Access Bank. The other 14 banks were examined in the second and third phases of the plan. The three nationalised banks (Keystone, Mainstream and Enterprise) are excluded because they were new in the system.

 

 
     
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