The Central Bank of Nigeria (CBN) has introduced a N100 million penalty for banks that process foreign exchange (FX) transactions without adequate documentation, according to the newly released fourth edition of its Foreign Exchange Manual issued in May 2026.
The manual, unveiled by the apex bank and reported on June 6, 2026, stipulates that authorised dealers found guilty of consummating foreign exchange transactions with insufficient documentation will pay a N100 million fine in addition to N10 million for each affected transaction.
The sanction is part of a broader compliance framework designed to strengthen oversight of Nigeria’s foreign exchange market, improve regulatory compliance, and curb abuses among authorised dealers and other market participants.
The revised manual marks the first major review of the country’s foreign exchange guidelines since 2017 and serves as a regulatory guide for banks, authorised buyers, exporters, investors, and members of the public involved in FX transactions.
According to the CBN, the updated framework aims to improve transparency in foreign exchange inflows and outflows, establish clearer documentation and reporting requirements, strengthen enforcement mechanisms, and ensure foreign exchange resources are channelled into productive sectors of the economy.
Stricter Sanctions for Violations
Under the new guidelines, banks that exceed their approved Net Open Position limits will face escalating penalties. A first violation will attract a warning letter, a second offence will result in a 10-working-day suspension from the foreign exchange market, while a third breach will attract a 90-day suspension.
The CBN also tightened reporting obligations for authorised dealers. Banks are required to submit daily returns on foreign exchange transactions by 10 a.m. for the preceding day and monthly returns within five working days after the end of each month.
Late submission of returns will attract a N500,000 fine, while failure to render returns will result in a minimum penalty of N5 million, plus an additional N500,000 for every day the violation persists.
The apex bank further warned against the unauthorised reallocation of foreign exchange funds, stating that offenders could face monetary sanctions, suspension of authorised dealership licences for at least six months, or outright licence revocation depending on the severity of the breach.
Importers, Exporters Under Tighter Rules
The revised manual requires importers to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks.
Importers who fail to comply will face restrictions on foreign exchange transactions and Form M processing. First-time offenders will be barred for 90 days, while second and third offences will attract restrictions of 180 and 360 days respectively. A fourth violation will lead to a complete ban from the foreign exchange market.
Banks that fail to report such defaults risk sanctions, including a warning and a N10 million fine for each affected transaction.
For exporters, proceeds from non-oil exports must be repatriated and credited to domiciliary accounts within 180 days of shipment, while oil and gas export earnings must be received within 90 days.
Exporters that fail to repatriate proceeds within the stipulated period will pay a penalty equivalent to one per cent of the naira value of the outstanding proceeds, while banks that fail to ensure compliance will be fined 0.5 per cent of the outstanding amount.
Operational Reforms Introduced
The CBN also announced several reforms aimed at improving market efficiency. These 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 ±10 per cent of the Cost and Freight value on Form M, and removing processing fees for Form NXP used in export transactions.
The revised framework further covers 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.
Additionally, the apex bank removed the mandatory requirement for Form A in remittances funded through ordinary domiciliary accounts, although banks must still verify the legitimacy and purpose of such transactions.
The CBN said the reforms were developed following extensive consultations with banks, exporters, corporate organisations, regulators, and development partners, and are expected to improve compliance, reduce transaction bottlenecks, deepen market confidence, attract investment inflows, and strengthen the integrity of Nigeria’s foreign exchange market.
Earlier, CBN Governor, Olayemi Cardoso, said the review became necessary in response to evolving global economic conditions, domestic structural adjustments, and ongoing reforms in Nigeria’s foreign exchange market.
Also speaking, Muhammad Abdullahi said the revised manual forms part of broader reforms aimed at restoring confidence, improving transparency, deepening liquidity, and enhancing efficiency in the foreign exchange market.