ABUJA, Nigeria (VOICE OF NAIJA)-The Central Bank of Nigeria has introduced a N100m penalty for banks that process foreign exchange transactions without sufficient documentation, as part of a comprehensive compliance framework contained in its newly released Foreign Exchange Manual.
Under the offences and sanctions provisions of the fourth edition of the manual, the apex bank stated, “Authorised dealers shall pay N100m in addition to N10m per transaction” for completing foreign exchange transactions with inadequate documentation.
The measure is part of a wider effort to strengthen oversight of Nigeria’s foreign exchange market, improve compliance standards, and curb infractions by authorised dealers and other participants.
Issued by the CBN’s Trade and Exchange Department in May 2026, the revised manual marks the first major review since 2017 and serves as a regulatory guide for banks, authorised buyers, exporters, investors, and members of the public involved in foreign exchange transactions.
READ ALSO:CBN Cuts Interest Rate To 26.50%
The apex bank said the updated framework is intended to enhance transparency in foreign exchange inflows and outflows, provide clear documentation and reporting requirements, reinforce enforcement mechanisms, and ensure foreign exchange resources support productive economic activities.
In addition to the N100m sanction, the manual outlines a series of penalties for breaches within the Nigerian Foreign Exchange Market.
Banks that exceed approved Net Open Position limits will face graduated sanctions.
A first offence will attract a warning letter, a second violation will result in a 10-working-day suspension from the foreign exchange market, while a third offence will lead to a 90-day suspension.
The CBN also strengthened reporting requirements for authorised dealers, mandating the submission of daily foreign exchange transaction returns by 10 a.m. for the previous day and monthly returns within five working days after the end of each month.
Failure to meet these obligations will attract penalties. Late submission of returns carries a N500,000 fine, while non-submission attracts a minimum penalty of N5m, alongside an additional N500,000 for each day the violation persists.
The apex bank further warned against the reallocation of foreign exchange funds without regulatory approval, noting that such violations could lead to monetary penalties, suspension of authorised dealership licences for at least six months, or outright revocation of licences depending on the severity of the offence.
The revised framework also introduces stricter measures for import-related transactions.
Importers are required to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks.
Defaulters will be barred from undertaking valid and non-valid foreign exchange transactions, including the processing of Form M applications.
First-time offenders will face a 90-day restriction, which will increase to 180 days for a second offence and 360 days for a third. A fourth violation will result in a complete ban from the foreign exchange market.
Banks that fail to report such defaults risk sanctions, including a warning and a N10m fine for every affected transaction.
Exporters are also subject to tighter obligations under the manual. Proceeds from non-oil exports must be repatriated and credited to exporters’ domiciliary accounts within 180 days of shipment, while proceeds from oil and gas exports must be received within 90 days.
Exporters who fail to repatriate proceeds within the stipulated timeframe will pay a penalty equivalent to one per cent of the naira value of the outstanding proceeds.
Banks that fail to enforce compliance will be fined 0.5 per cent of the outstanding amount.
The manual also authorises the CBN to sanction banks for delays in approving export documentation, failure to remit export supervision levies, and failure to submit returns on export proceeds.
Alongside the sanctions, the revised framework introduces several operational changes aimed at improving efficiency in the foreign exchange market.
Key reforms include increasing the allowable advance payment for imports from 15 per cent to 30 per cent, introducing a permissible import shortfall or excess margin of plus or minus 10 per cent of the Cost and Freight value on Form M, and eliminating processing fees for Form NXP used in export transactions.
The apex bank also incorporated provisions for service exports, technology-related remittances, transactions under the Pan-African Payment and Settlement System, non-resident investment accounts, and tuition fee remittances of up to $25,000 per semester for undergraduate and postgraduate studies abroad.
In addition, the manual removes the compulsory use of Form A for remittances funded through ordinary domiciliary accounts, although banks remain responsible for verifying the legitimacy and purpose of such transactions.
According to the CBN, the reforms were developed following extensive consultations with banks, exporters, corporates, regulators, and development partners, with the objective of promoting a transparent, rules-based, and market-oriented foreign exchange system.
The apex bank said the revised manual is expected to boost compliance, reduce transaction bottlenecks, deepen market confidence, attract investment inflows, and strengthen the integrity of Nigeria’s foreign exchange market.
CBN Governor, Olayemi Cardoso, had earlier said the initiative demonstrates the bank’s commitment to strengthening macroeconomic stability and modernising foreign exchange administration in Nigeria.
He noted that the review became necessary in response to changing global economic conditions, domestic structural adjustments, and ongoing reforms within the foreign exchange market.
The CBN’s Deputy Governor for Corporate Services, Muhammad Abdullahi, said the revised manual forms part of broader reforms introduced under Cardoso’s leadership to restore confidence, improve transparency, deepen liquidity, and enhance market efficiency.
He added that the review was designed to align Nigeria’s foreign exchange framework with current market realities and international best practices.
“Our goal is to reduce transaction frictions, improve processing timelines, deepen market confidence, encourage formal market participation, and create a more seamless and efficient experience for legitimate users of Nigeria’s foreign exchange market,” he said.