CBN readmits FBN, Sterling, 6 others back to FX market

By Odunewu Segun

The eight remaining banks suspended by the Central Bank of Nigeria from the interbank currency market over their failure to remit about $2.1 billion in deposits belonging to the Nigerian National Petroleum Corporation (NNPC) to the Treasury Single Account (TSA) have been reinstated.

According to the apex bank, their reinstatement into the interbank currency market was as result of their submission of a credible repayment plan on how the outstanding money would be paid.

Announcing the reinstatement on Wednesday, CBN Director of Banking Supervision, Tokunbo Martins said the eight banks had submitted a “credible repayment plan” to remit the outstanding money. “As a result of that, all those banks have be reinstated in to the foreign exchange market,” she said.

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Recall that nine banks were suspended by the CBN, but the suspension of United Bank for Africa was later suspended following the bank’s prompt payment of $350 million, the NNPC deposit it had.

Others whose suspension have now been suspended are: First Bank of Nigeria (FBN) $469m; Diamond Bank Plc ($287m); Sterling Bank Plc ($269m); Skye Bank Plc ($221m); Fidelity Bank ($209m); Keystone Bank ($139); First City Monument Bank (FCMB) $125m; and Heritage Bank ($85m).

The decision of the CBN to tighten restrictions on the flow of dollars to domestic lenders in March this year had forced the banks to delay hard-currency loan and trade repayments and increased their risk of default.