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Why CBN allowed only First Bank to sell Dollar to BDCs

More facts have emerged as to why the Central Bank of Nigeria (CBN), last week banned other commercial banks from selling forex to Bureaux De Change (BDCs) except First Bank Plc.

Investigations revealed that whereas First bank have continued to deliver the services with high level of compliance to laid down rules, other banks (names with held) were shrouded in sharp including using forex allocated to them to sell to Bureaux De Change (BDCs) for other purposes. Another default on the side of other banks is that rather than deal directly with the BDCs, the commercial banks trade with the forex thus starving the BDCs of forex and making it unavailable to persons who besiege the BDCs for the hard currency. Experts call the scam round-tripping of the economy.

Pundits are upbeat that these acts are key factors derailing all efforts of the apex bank in pushing up the fortunes of the naira in the forex market.

This latest development has compelled CBN to suspend all commercial banks in Nigeria except First Bank from selling foreign exchange directly to BDC operators following their failure to comply with the July 22, 2016, directive which mandated them to sell inflows from International Money Transfer Operators (IMTO) to BDCs. The CBN also suspended 195 BDCs from the market following their failure to renew their operating licenses.

According to First Bank, the announcement is coming on the heels of the Bank’s strengthened money transfer services as well as its strict compliance to CBN’s rules and directives on the sale of foreign exchange.

The Bank had consistently sold dollars to over 500 BDCs as directed by the CBN to improve dollar liquidity and strengthen the Naira in line with the new flexible foreign exchange policy.

The bank in a statement described CBN’s pronouncement as a testament to the Bank’s strong financial base and its avowed support to the growth and development of a sustainable national economy.

The Bank’s Chief Financial Officer, Patrick Iyamabo, recently noted that the Bank will continue to strive to maintain its position as the safest and most respected banking franchise in the country.

“We would continue to leverage our unique ability to grow and capitalize the institution – a testament to our solid track record. Our highest priority remains meeting the financing and banking needs of our customers, by providing world class services, knowledge and expertise to support them, even in very difficult times.”

The Bank said it remains committed to corporate governance principles and would continue to ensure that dollars sales to the BDCs continue in a seamless manner for ease of distribution to the end users.

Other banks contacted for comments said they are yet to study the development, saying, it will amount to high level monopoly if the development is allowed to

Besides, the CBN has instead directed the agent banks to sell forex proceeds from diaspora remittances to Travelex, who will then sell directly to the BDC.

By weekend, the naira maintained a steady rise at parallel market closing at N467 from over N500 in the previous week in the parallel market since Travelex commenced the distribution of $15, 000 weekly to BDCs from diaspora remittances as directed by the CBN.

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