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CBN Suspends 9 Banks From Forex Transactions

The Central Bank of Nigeria has exempted NNPC, Power Holding Company of Nigeria (PHCN),   Bank of Industry (BoI), Nigeria Railway Corporation, Federal Mortgage Bank of Nigeria, Bank of Agriculture, Niger Delta Power Holding Company/National Integrated Power Project, National Communication Satellite Limited, Galaxy Backbone Ltd and Ajaokuta Steel Company Ltd, as well as Urban Development Bank, Nigerian Export-Import Bank and Transcorp Hilton Hotel from forex transactions.

The circular, entitled: ‘Approval to exempt some MDAs in line with the e-collection mop-up exercise,’ read: “Approval is hereby granted to your bank (CBN) to exempt the accounts of 13 MDAs (category six), dated 7th August 2015, as these are profit-oriented government business entities that are to pay their dividends into the Treasury Single Accounts whenever they are declared.” The circular urged the CBN to “note that, in line with the presidential approval, the following should apply: That National Petroleum Investment Management Services (NAPIMS) remains classified as an MDA that is funded from the Federation Account under Category 4 of the Circular, being the NNPC business unit responsible for the management of the Federal Government’s investment in upstream activities and funded from direct proceeds of oil and gas revenue. It also stated that all other NNPC’s commercial/business entities as re-classified as ‘Profit Oriented Public Corporations/Business Enterprises’ under Category   6 of the Circular which requires that only dividends from these entities be paid into the TSA.”

 

When contacted, Mr Ohi Alegbe, the then spokesman for the NNPC, had said the NNPC would continue to remit its accruals into the Federation Account but that the JV cash-call obligations with its partners would use commercial banks and not the CBN. Chinedu Moghalu of NEXIM confirmed that NEXIM had been exempted from the TSA scheme while Shola Adeyemo of Transcorp Hilton Hotel said the firm was “aware of such a directive.”

 

An official of BoI, who pleaded not to be named, said that BoI managed intervention funds on behalf of the CBN, so as a developmental institution, BoI will have to be exempted from the TSA arrangement. It will also be recalled that the NNPC had denied any wrongdoing over its failure to remit about $13.294 billion to the federation account over a nine-year period, stating that the funds were utilized legally in running its operations, while the balance of the funds had been transferred to the CBN.

Photo Credit: 
buzznigeria.com

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