Business
UBA, Wema, four others disqualified from CBN FX auction
Six prominent banks, including United Bank for Africa (UBA), Wema Bank, and Stanbic IBTC, were disqualified from a recent retail Dutch auction by the Central Bank of Nigeria (CBN).
The CBN auctioned $876.26 million to 26 qualified banks as part of its strategy to ease demand pressure in the foreign exchange (FX) market and promote price discovery.
The auction, one of the most significant FX interventions under Governor Yemi Cardoso, saw a total of $1.18 billion in bids from 32 banks.
However, $279.04 million in bids from six banks were disqualified for various reasons, including late submission and failure to provide bid rates.
UBA’s $13.21 million bid and First City Monument Bank’s (FCMB) $178.65 million bid were invalidated due to late submissions.
Stanbic IBTC, which submitted a bid of $57.86 million, faced a similar disqualification. Wema Bank’s $21.94 million bid was also invalidated for the same reason.
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SunTrust Bank’s $7.38 million bid was disqualified for not providing bid rates, while Rand Bank failed to submit any bids.
The disqualifications underline the CBN’s strict regulatory standards to ensure transparency and efficiency in the FX market. The successful bids were settled on August 8, 2024, as part of the T+2 settlement process.
According to the CBN, a total of $1.18 billion was submitted in bids by 32 banks. However, bids amounting to $279.04 million from six banks were disqualified for various reasons.
In total, these disqualifications resulted in the exclusion of $279.04 million from the auction.
The CBN’s retail Dutch auction, which was conducted on August 6, 2024, aimed to distribute FX to end-users, including those with trade-backed demands, as part of its strategy to stabilize the naira.
The successful bids were settled on August 8, 2024, as part of the T+2 settlement process.
This disqualification of major banks like UBA, Wema, and Stanbic highlights the strict regulatory requirements imposed by the CBN in its efforts to maintain transparency and efficiency in the FX market.
It also highlights the importance of adherence to submission deadlines and the accurate completion of bid templates for future auctions.