Nigerian banks expose identities of customers with suspicious dollar transactions

Some Nigerian banks have started exposing the identities of customers, who allegedly obtained dollars by false pretense, and traded them for profit at the parallel market.

Customers of some banks in Nigeria have been taking advantage of the lucrative 37 percent differential between the official and black market exchange rates by obtaining the dollar at the official rate of about N416, only to sell in the unauthorised market at a more expensive rate of about N570.

These customers can beat regulations by presenting false travel documents, prompting CBN to direct banks to notify their customers of an impending crackdown on saboteurs in the forex market.

Part of the CBN statement had read: “Consequently, further to the various measures already put in place, all banks are hereby directed to publish on their websites the names and BVN of defaulting customers who present fake travel documents or cancel their tickets and fail to return the purchased PTA/BTA within two weeks as stipulated in the customer declaration form signed by them.”

A report by Bloomberg on Saturday revealed that some banks have started implementing the CBN’s directives by publishing names of clients that were involved in filing suspicious claims for forex transactions on their websites last week.

Zenith Bank Plc, the nation’s biggest lender by market value has published 987 names of customers that have engaged in the illegal practice on its website.

Fidelity Bank Plc has identified 83 customers; First City Monument Bank Plc has listed eight names, while Wema Bank published one name. United Bank for Africa Plc (UBA) is among the banks that have compiled a list of culpable customers.

The apex bank had directed banks to identify such customers and ensure they refund the hard currency. The regulator institution first alerted banks of the shady practice in 2021.

Some deposit money banks acting on the directive of the CBN had sent notices to their customers warning that identities and Bank Verification Number (BVN) of those who contravene the apex bank’s new forex policy on overseas personal and business travels would be published.

The CBN had also directed that travelers who buy foreign exchange from banks for travel purposes but fail to embark on the trip after two weeks of their scheduled travel date must return the forex to the banks.

The banks in their notices also pointed out consequences for those customers who engage in fraudulent and unethical practices with regards to the purchase of Personal Travel Allowances (PTA) and Business Travel Allowances (BTA).

In its notice to customers, one of the Tier 1 banks had said: “We have been directed by the Central Bank of Nigeria to inform all our customers that unethical practices to circumvent the new CBN policy on the sale of forex, such as the presentation of false travel documents, visas, and the cancellation of flight tickets, after purchasing personal travel allowance and business travel allowance, will no longer be tolerated.

“Defaulting customers who present fraudulent travel credentials or cancel their tickets and fail to refund the purchased PTA and BTA within two weeks, as stated in the signed customer declaration form, will have their identities and bank verification numbers published.

“We aim to implement this policy immediately as an organisation that is fully compliant with the Central Bank of Nigeria’s rules and regulations.

“Our bank is committed to partnering with the CBN to ensure a transparent, efficient, and stable FX Market that meets the needs of all legitimate users.”