CBN Shakes Banking Sector As It Unveils New Forex Rules, Sanctions Banks Over Breaches

The Central Bank of Nigeria (CBN) has introduced a ₦100 million penalty for banks and authorised foreign exchange dealers that process transactions without adequate documentation.....KINDLY READ THE FULL STORY HERE▶

The sanction is contained in the offences and sanctions section of the fourth edition of the CBN Foreign Exchange Manual, released in May 2026 by the apex bank’s Trade and Exchange Department.

Under the new rule, authorised dealers found guilty of such infractions will pay ₦100 million, in addition to ₦10 million for each affected transaction.

The manual states: “Authorised dealers shall pay ₦100m in addition to ₦10m per transaction” for executing forex transactions without proper documentation.

The revised document, which represents the first major update since 2017, is designed to guide banks, exporters, investors, and other participants in Nigeria’s foreign exchange market.

According to the CBN, the updated framework aims to improve transparency in foreign exchange inflows and outflows, strengthen documentation and reporting standards, and enhance regulatory enforcement across the market.

It added that the reforms are intended to ensure foreign exchange is directed toward productive sectors in line with national economic priorities, while also reducing abuse and improving compliance among market participants.

Beyond the ₦100 million fine, the manual introduces additional sanctions for violations of foreign exchange regulations.

Banks that exceed approved Net Open Position limits will face graduated penalties. A first offence attracts a warning, a second leads to a 10-working-day suspension from the forex market, while a third results in a 90-day suspension.

The CBN also tightened reporting requirements, mandating authorised dealers to submit daily forex returns by 10 a.m. the following day, as well as monthly returns within five working days after each month ends. Failure to comply attracts penalties.

Late submission of returns will attract a ₦500,000 fine, while non-submission carries a minimum penalty of ₦5 million, plus ₦500,000 for each additional day of default.

The apex bank warned against unauthorised reallocation of foreign exchange funds, stating that offenders risk monetary penalties, suspension of dealership licences for at least six months, or outright revocation depending on severity.

Importers are also affected by the new rules. They are now required to submit Exchange Control Documents within 90 days of negotiating shipping documents with foreign correspondent banks.

Failure to comply will result in restrictions on accessing foreign exchange services, including Form M processing. First-time offenders face a 90-day restriction, a second breach attracts 180 days, a third 360 days, while a fourth violation results in a full ban from the forex market.

Banks that fail to report such defaults will also be penalised with a warning and a ₦10 million fine per affected transaction.

For exporters, the manual mandates repatriation of proceeds within 180 days for non-oil exports and 90 days for oil and gas exports. Failure to comply attracts a penalty of 1 per cent of the naira value of unremitted funds for exporters, while banks face a 0.5 per cent fine for non-compliance.

The CBN also introduced operational reforms, including an increase in allowable advance payment for imports from 15 per cent to 30 per cent, and a ±10 per cent tolerance margin for import values under Form M.

Processing fees for Form NXP have been removed, while new provisions now cover service exports, digital remittances, PAPSS transactions, non-resident accounts, and tuition payments.

Under the new guidelines, students may now remit up to $25,000 per semester for overseas tuition. The requirement for Form A in certain domiciliary account transactions has also been removed, although banks must still verify the legitimacy of all transfers.

The CBN said the revised manual was developed after consultations with banks, exporters, corporates, regulators, and development partners.

It added that the reforms are aimed at building a transparent, rules-based, and market-driven foreign exchange system that enhances confidence, attracts investment inflows, and improves overall market efficiency.

CBN Governor Olayemi Cardoso said the changes reflect efforts to strengthen macroeconomic stability and modernise Nigeria’s forex framework in response to evolving global and domestic conditions.

Deputy Governor (Corporate Services), Dr. Muhammad Abdullahi, added that the reforms are part of broader initiatives to restore confidence, deepen liquidity, and improve efficiency in the foreign exchange market.

He said the goal is to reduce transaction bottlenecks, enhance processing timelines, and create a more seamless experience for legitimate users of Nigeria’s foreign exchange system.