In response to mounting concerns over banks’ failure to adhere to CBN directives regarding foreign exchange (forex) operations, the House of Representatives has taken decisive action by resolving to conduct an investigative hearing.
A decisive step has been taken to conduct an investigative hearing to tackle the consistent disregard by banks and financial institutions for the CBN’s guidelines on Net Open Position Limits concerning forex transactions.
The resolution, which stemmed from a motion of urgent national importance tabled by Hon. Babajimi Benson during Wednesday’s plenary session, underscores the critical need for banks to implement CBN policies effectively. Benson highlighted the statutory mandate of the CBN to regulate monetary policies in the country and expressed dismay over the continuous rise in the Dollar-to-Naira exchange rate, reaching as high as N1,520 in recent weeks.
The lawmaker attributed the escalating exchange rate to various market forces and economic policies, including the liberalization of the Dollar. He raised concerns regarding the hoarding of forex by commercial banks and financial institutions instead of facilitating lending to customers, exacerbating economic challenges and hindering legitimate businesses’ access to forex for transactions.
Benson emphasized the importance of enforcing CBN’s monetary measures, such as Net Open Position Limits and restrictions on holding excess long foreign exchange, to curb speculative activities by banks. He warned of dire economic consequences if decisive legislative actions are not taken to ensure compliance with CBN directives.
Consequently, the House resolved to empower the Committees on Banking Regulations and Banking Institutions to conduct an in-depth investigative hearing on banks’ non-compliance with CBN directives. Additionally, the Committee on Legislative Compliance has been tasked with ensuring the full implementation of the resolution.
