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Tuesday, June 25, 2024

Nigeria: CBN Reiterates Directive to Banks On Utilisation of Foreign exchange Positive factors

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Banks shall not make the most of such FX revaluation positive aspects to pay dividends or meet working bills.

The Central Financial institution of Nigeria (CBN) has reaffirmed its directive to banks relating to the utilisation of overseas forex (FCY) revaluation positive aspects.

In a round launched by the financial institution on Thursday and signed by the Performing Director of the Banking Supervision Division, Adetona Adedeji, the CBN suggested banks towards enterprise such actions.

Within the round, referencing a letter dated 11 September 2023, the CBN emphasised the necessity for banks to train utmost prudence in dealing with these positive aspects.

In line with the directive, banks are required to put aside FCY revaluation positive aspects as a counter-cyclical buffer to mitigate any opposed actions within the overseas alternate (FX) charge. It specified that banks shouldn’t use such positive aspects to pay dividends or cowl working bills.

“Additional to our letter dated September 11, 2023, referenced BSD/DIR/CON/LAB/16/020 on the above topic, the Central Financial institution of Nigeria needs to reiterate that banks are required to train utmost prudence and put aside FCY revaluation positive aspects as a counter-cyclical buffer to cushion any opposed actions within the FX charge.

“On this regard, banks shall not make the most of such FX revaluation positive aspects to pay dividends or meet working bills. Please be guided accordingly,” it mentioned.

“Banks and monetary establishments are suggested to pay attention to this directive and comply accordingly to keep away from any sanctions or regulatory actions from the CBN.”