Emma Ujah, Abuja Bureau Chief

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has issued a strong warning to banks, stating that any institution found guilty of foreign exchange (FX) infractions under the newly introduced FX Code will face prompt and severe penalties.

Speaking at the launch of the Code in Abuja, Cardoso emphasized the need for bank board chairpersons and management teams to lead by example in adhering to the principles of ethical and transparent FX transactions for authorized dealers.

He declared an end to unethical practices that have historically exploited the Nigerian economy and its citizens.

“We must not forget where we are coming from. The era of multiple exchange rates, which created privileges for a select few at the expense of most Nigerians, severely undermined market integrity,” Cardoso stated.

He disclosed that the verification of $7 billion in FX backlogs, which had taken over 12 months, revealed numerous unethical and illegal practices. “The forensic verification process is near completion, and final settlements will be processed accordingly,” he said.

Cardoso also criticized the excessive reliance on ways-and-means financing, which he noted had inflicted significant damage on the economy, contributing to inflation, currency depreciation, and diminished public confidence.

“These practices must never return. The FX Code is a firm rejection of such distortions and a strong commitment to a future defined by fairness, trust, and market-driven principles,” he added.

The governor urged bank leaders, including Board Chairs, Managing Directors, and Chief Compliance Officers, to embed the new standards in their organizations.

“Let me reiterate: the era of opaque practices is over. We will not hesitate to act against any institution or individual that undermines the integrity of our financial markets,” he warned.

Cardoso concluded by describing the FX Code as a binding commitment to accountability and transparency, urging all stakeholders to play their part in upholding its principles.