The Central Bank of Nigeria (CBN) has introduced a N100 million penalty for banks that process foreign exchange transactions with inadequate documentation, as part of a sweeping revision of its foreign exchange regulatory framework aimed at tightening compliance and improving market transparency.
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The sanction is contained in the newly released fourth edition of the Foreign Exchange Manual, which serves as the primary guide for foreign exchange operations in Nigeria.
Under the new rules, authorised dealer banks found guilty of consummating foreign exchange transactions without adequate documentation will pay a N100 million fine in addition to N10 million for each affected transaction.
The manual, issued by the CBN’s Trade and Exchange Department in May 2026, seeks to strengthen enforcement, improve accountability, curb market abuses, and enhance confidence in Nigeria’s foreign exchange market.
What the document says
The CBN classified the offence as “Consummating Foreign Exchange Transactions with inadequate documentation” and stated that “Authorised Dealers shall pay N100 million in addition to N10 million per transaction.”
The revised manual introduces stricter documentation standards across foreign exchange transactions, including spot trades, forward contracts, swap arrangements, imports and exports.
- For customer foreign exchange transactions, banks are required to obtain and verify supporting documents before foreign currency can be delivered.
- The same requirement applies to forward and swap contracts, where underlying transaction documents must be available before settlement.
- The apex bank also retained detailed import documentation requirements, including Form M registration, certificates of origin, invoices, packing lists and shipping documents. Importers are required to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks.
Failure to comply attracts escalating sanctions. First-time offenders face a 90-day restriction from foreign exchange transactions, while second and third violations attract restrictions of 180 days and 360 days respectively. A fourth violation could result in a complete ban from further foreign exchange transactions.
Banks that fail to report such defaults to the CBN also face penalties under the revised framework.
Additional sanctions for market violations
Beyond documentation breaches, the CBN outlined tougher sanctions for other foreign exchange market infractions.
Banks that fail to submit mandatory daily and monthly returns face a penalty of N500,000 for late rendition and a minimum of N5 million for non-rendition, alongside an additional N500,000 for every day the violation continues.
- The regulator also strengthened penalties relating to Net Open Position limits. Banks that exceed approved foreign currency exposure limits will receive a warning on the first offence, face a 10-working-day suspension from the Nigerian Foreign Exchange Market on the second offence, and a 90-day suspension on the third violation.
- For unauthorised reallocation of foreign exchange funds, offending banks risk N10 million sanctions per transaction, in addition to referrals to the Bankers’ Committee ethics framework.
The CBN said the revised manual forms part of broader efforts to build a more transparent, rules-based and efficient foreign exchange market. The regulator noted that the framework is designed to promote consistency in foreign exchange transactions, strengthen documentation standards, support compliance, and improve confidence among investors and market participants.
What you should know
Nairametrics earlier reported that the Central Bank of Nigeria (CBN) launched the 4th Edition of the Foreign Exchange (FX) Manual as part of ongoing reforms aimed at improving transparency, liquidity, and confidence in the Nigerian FX market.
The new manual comes as the apex bank continues reforms aimed at deepening liquidity, improving market discipline and attracting sustainable foreign capital into Nigeria’s foreign exchange market.
