*The Central Bank of Nigeria says the banking sector regulator will collaborate with law enforcement and other regulatory agencies to pursue civil, administrative, or criminal sanctions against indicted individuals and corporates over noted ‘irregularities’, as necessary

Isola Moses | 绿帽献妻

The Central Bank of Nigeria (CBN) has stated that the banking sector regulator will sanction individuals and corporates involved in 鈥渋rregularities鈥� in the country鈥檚 outstanding Foreign Exchange (FX) forward contracts.

绿帽献妻 reports the CBN disclosed the discovery followed a recent audit.

The disclosure is contained in a document titled: “Frequently Asked Questions (FAQ) on the Settlement of Undelivered Forward Contracts”, and published on CBN鈥檚 official Web site Thursday, August 7, 2025.

The Bankers’ Bank also noted that some of the said contracts, which were intended to help in managing the Nigeria’s currency risk, were not legitimate during verifications.

The CBN, therefore, said that it would sanction those responsible for these alleged Forex infractions.

The Bank also said some of the irregularities included mismatches in beneficiary identities.

Other irregularities noted included exaggerated Foreign Exchange requests, incorrect or blank Form M submissions, and approvals for non-permissible imports into Nigeria.

The CBN further stated:聽 鈥淭he Bank will collaborate with law enforcement and regulatory agencies to pursue civil, administrative, or criminal sanctions, as necessary.”

How CBN uncovered Forex contract irregularities

The audit, said to have been conducted by Deloitte from September 2023, reviewed transactions under the retail secondary market intervention sales (RSMIS) window.

The contracts, the Bank stated, involved upfront Naira payments in exchange for promised Dollar delivery on future dates 鈥� 鈥渕any of which went unfulfilled.鈥�

It said: 鈥淭he forensic audit uncovered significant irregularities in the execution of some of the foreign exchange forward contracts.

鈥淓ach finding was based on objective and verifiable data, and all affected counterparties were given an opportunity to respond before final decisions invalidating these contracts were made.鈥�

The CBN noted that the audit indicated that some undelivered forward contracts were found to be invalid for various infractions and reasons, such as the company name on the approved sales result being different from the company name on Form M portal.

The Bank said: 鈥淭he cumulative value of the approved FX Forward Sales on this Forex Form Number from Auction 1 in 2021 to date of this auction exceeds the total value of the forex Form Number.”

According to the bank, these invalid contracts were canceled to prevent rewarding non-compliance and to protect the nation鈥檚 FX reserves.

The CBN confirmed that no payments were made on these contracts since they failed to meet the necessary settlement standards.

It noted: 鈥淪ales Higher Than Demand, Non-permissible Item of Import, Unauthorised Companies Importing Milk, Vague Narration of the Item of Import, Sales Without Demand, Incorrect Forex Form Number, Forex Form not Indicated, Blank Form M.

鈥淩ejected Form A Application on Form A Portal with Approved Sales. Approved Sales Value Higher than the cost of import item on Form A portal.

鈥淎pproved Sales Value Higher than the cost of import item on Form M portal.

The CBN restated the banking sector regulator will not settle any Foreign Exchange contracts that are found to be illegal, fraudulent, or non-compliant with its regulations.

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