CBN sets to clamp down on bank customers withdrawing naira to buy dollar

Mr Godwin Elefiele, Governor of the Central Bank of Nigeria (CBN), has cautioned bank customers, particularly politicians and high-profile individuals, to refrain from withdrawing Naira for the sole purpose of converting them into US dollars.

He labelled the conduct as illegal and said it had the potential to devastate the country’s economy as the country makes every attempt to resolve the ongoing foreign exchange (forex) crisis, which is rapidly depleting the value of the Naira against the greenback in the currency market.

Mr Emefiele told reporters in Abuja on Tuesday that the top bank will put in place a strong surveillance system to detect unlawful conversions of Naira to Dollar in the Nigerian financial system.

Mr Emefiele told reporters in Abuja on Tuesday that the top bank will put in place a strong surveillance system to detect unlawful conversions of Naira to Dollar in the Nigerian financial system.

According to him, anyone caught up in this would be barred from utilizing the country’s financial system, as a Post no Debit would be placed on the delinquent customer’s bank account.

He further stated that any bank found to be assisting in this illegal behaviour would face sanctions from the country’s banking industry authority.

Mr Emefiele stated that this caution is important as the country enters election season and political actors want to sweep up FX from the system to prosecute the 2023 general elections, forcing the native currency to weaken further.

There are fears that the Nigerian currency will plummet to N700 before the elections next year, and the CBN, likely sensing this, will take actions to prevent this from happening as it could bring the economy to a halt.

“As far as we are concerned, we check subsystem liquidity.” We will utilize our authorities to seize cash, and people who take money from banks to acquire dollars are breaking the law. If the security authorities arrest you, you will understand the implications,” Mr Emefiele declared yesterday.

He went on to say, “We are watching customers and banks, and any bank involved will be sanctioned.” We shall place a Post no Debit on the account of the defaulting consumer. It is a highly harmful weapon for preventing unlawful flows of either domestic or international funds. We will undertake investigations, have documentation, and you will be unable to conduct transactions in any Nigerian bank.”

He cautioned politicians and high-profile individuals to refrain from withdrawing Naira for the sole aim of converting them into US dollars.

This action, according to Emefiele, is illegal and has the potential to devastate the country’s economy as the country takes every attempt to resolve the ongoing foreign exchange (forex) scarcity, which is rapidly depleting the value of the Naira versus the greenback in the currency market.