How Keystone, GTBank, others returned to forex market

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Four of the 14 banks barred from dealing in the Small and Medium Enterprises (SME) wholesale Forex window by the Central Bank of Nigeria (CBN) have been readmitted into the market.

The banks, Keystone Bank, GTBank, First Bank and the United Bank for Africa (UBA) were readmitted following their provision of evidence of compliance.

The 14 banks were barred, following persistent complaints that some Deposit Money Banks (DMBs) deliberately frustrate efforts by many SMEs to access forex from the new window created by CBN.

CBN spokesman, Mr. Isaac Okorafor, said the financial regulator took the decision to bar the erring banks based on field reports, which revealed that only eight banks out of 22 had sold forex to the SMEs segment since the inception of the new window.

However Keystone Bank and the other three banks were at the weekend readmitted into the spot and wholesale forwards segment of the foreign exchange market by the Central Bank of Nigeria (CBN) sequel to the provision of evidence of sales of forex to Small and Medium scale Enterprises (SME) since the introduction of the special window for small businesses.

According to the CBN, the banks were sanctioned for not adhering to the FX supply policy to SMEs thereby frustrating the efforts of small businesses that needed forex. The eight banks that were not affected by the suspension order include; Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Heritage Bank Plc, Jaiz Bank, Sterling Bank Plc, Unity Bank Plc and Zenith Bank Plc.

A source from the CBN stated that; the sale of FX to SMEs has become the “gold standard” for participating in the forex market and the CBN would not hesitate to sanction any bank and its officials who circumvent the rules. The informed The Authority that the other 10 banks suspended were also in the process of providing verifiable proof of compliance and once they do so, they would be readmitted.

The forex supply policy to SMEs was introduced as a means to provide small scale businesses with a lifeline as findings showed that they were being crowded out by larger scale firms in the FX market. Under this special arrangement, companies with staff strength of between 10 to 199 and an asset base of N5 million to N500 million were offered the opportunity to import eligible items within the approved threshold.

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