Nigeria Lifts Forex Ban On Nine Banks: Official

LAGOS, (UrduPoint / Pakistan Point News -1st Sep,2016) - The Central Bank of Nigeria (CBN) has lifted a suspension of nine banks from foreign exchange trading for failing to remit some oil money to the government, an official said Thursday.

"The erring banks have been readmitted into the inter-bank foreign exchange market after they presented their plans to pay back the money," the CBN official told AFP. The CBN suspended the nine banks last week for withholding $2.12 billion belonging to the Nigerian National Petroleum Corporation (NNPC) and the Nigeria Liquified Natural Gas (NLNG) contrary to a government regulation.

On coming to power in May last year on an anti-graft ticket, President Mohammadu Buhari ordered all government revenues to be paid into Treasury Single Account (TSA) at the CBN to prevent fraud.

While government agencies and ministries previously maintained multiple accounts at local banks, Buhari instituted the TSA to ensure that all government funds were pooled. The decision was to instill more accountability in monitoring government revenue and to eliminate opacity in government. Last week's ban created tension in the financial system, triggering a crash in the stocks of most of the indicted lenders on the Nigeria Stock Exchange.

The foreign exchange market also reacted negatively with the naira Currency slumping further on the parallel market to close at 420 to the Dollar on Wednesday against 396 before the suspension. Industry experts had appealed for leniency to avoid causing a run on the banks.