Some of the banks barred from the foreign exchange market over non-remittance of the Nigerian National Petroleum Corporation/Nigeria Liquefied Natural Gas foreign currency in their possession to the Treasury Single Account (TSA), have offered explanations.
Nine banks were on Tuesday barred from the forex market by the Central Bank of Nigeria (CBN). UBA, which was one of them, has been readmitted after CBN confirmed that the bank had paid its own part of the NNPC/NLNG dollar funds to the TSA.
The banks currently offering explanations to their customers via texts and emails include: First Bank Limited, Fidelity Bank Plc, First City Monument Bank, Keystone Plc and Heritage Bank Plc.
FirstBank, in a statement, said the referenced NNPC dollar accounts were fully disclosed to the CBN.
It said the accounts were being operated in line with the regulatory requirements.
The bank also said tripartite documented discussions had been ongoing among the CBN, NNPC and the bank on the need for domestic retention of those balances.
It said that was as part of measures to ameliorate challenges posed by the lack of FX availability and customers’ inability to source FX to fund their trade finance obligations to the bank.
The bank reassured all its stakeholders that the issue was not a function of concealment or willful non-compliance by the bank.
The bank added: “We are confident in our ability to meet and honour all our obligations as at when due and are currently in talks with the CBN and other relevant bodies and are positive of an amicable resolution soonest”
Fidelity Bank said it had repaid over $288 million of those funds in line with the advised repayment schedule.
Its statement reads: “We will like to clarify that these deposits were duly reported to the CBN by Fidelity Bank in line with the extant TSA requirements contrary to the erroneous view in certain media reports that the funds were concealed from the regulators.
“At the commencement of the Treasury Single Account (TSA) in 2015, Fidelity bank advised NNPC and the regulators with a schedule of repayment for the NNPC/NLNG dividend dollar deposits.
“Please note that you can continue to operate your domiciliary account with Fidelity and this development will not affect your deposits/loans (local and foreign currency), remittances, transactional services and electronic banking services.
“Although the market condition remains quite challenging, we will continue to honour our obligations and operate with the highest level of corporate governance.”
The bank said it was also engaging with the other banks involved, stakeholders and the regulators to resolve the issue quickly and ensure its return to the forex market.
Keystone Bank, in its own statement it had engaged in efforts to resolve the issues, adding that it understood the importance of sourcing foreign exchange for its customers’ needs to support economic growth.
The bank said the development did not adversely affect customers’ existing transactions with it except that there would be constraints in establishing new letters of credit until the issue was resolved.
Heritage Bank said the CBN’s announcement of temporary suspension was a systemic challenge to the banking industry that cut across most banks.
It said the bank would continue to treat forex transfer, remittance from domiciliary accounts, establishment of non-valid for FX form Ms and establishment of Letter of Credit on the bank’s offshore lines.
FCMB, in a statement on Wednesday, said: “Yesterday, the Central Bank of Nigeria announced a temporary suspension of FCMB along with eight other commercial banks from access to the foreign exchange market. This suspension is based on the Treasury Single Account Directive, which stops banks from holding funds on behalf of government entities and instead, effect daily remittances to the CBN. For our bank, this suspension is based on our non-payment/transfer of the remaining $125 million NNPC fund with us to TSA.
“As a financial institution with strong corporate governance rules, we have always fully disclosed the outstanding TSA funds in our books and have continued to work assiduously to fulfill our outstanding obligations. The members of the NNPC Management Team have been kept fully in the picture on the funds. This scenario is really because of lack of foreign exchange availability and the prevailing fall in oil prices rather than concealment or wilful non-compliance by FCMB. It is actually a widespread industry issue.
“We also think it is very important to proactively reach out to our customers and explain what this means for them, and hence, this mail for you.
“This development will have no impact on most of our customers. While there might be minimal impact on the establishment of new lines of trade through the foreign exchange market, your relationship officer will be able to provide guidance on this. This scenario will not affect your deposits, both local and those in foreign currency. Transactional services such as payments, local and international will continue seamlessly wherever and whenever they are initiated.
“Remittance services will not be hindered in any way and you can continue to transact in any part of the world, at any time, either on our mobile application platform or via internet banking.
“As an institution, our fundamentals remain strong, our franchise is still growing and we remain firmly committed to our professional values.
“We have started to execute a strategy to ensure a rapid and mutually beneficial outcome of this situation. We fully understand the importance of unfettered access to the FX market and its link to growth for the country’s economy.
“Across all spheres of banking, the onus is on us to ensure that we continue to meet your financial needs, whatever they might be.