The Central Bank of Nigeria (CBN) has imposed a ₦100 million penalty on banks and other authorised dealers that process foreign exchange transactions without adequate supporting documentation, marking one of the toughest compliance measures introduced under its revised foreign exchange regulatory framework.
The sanction is contained in the fourth edition of the Foreign Exchange Manual, released in May 2026 by the CBN's Trade and Exchange Department. The updated manual, the first major review since 2017, introduces stricter compliance requirements and tougher penalties aimed at enhancing transparency, accountability, and discipline in Nigeria's foreign exchange market.
Under the new rules, authorised dealers that execute foreign exchange transactions backed by insufficient documentation will pay a ₦100 million fine in addition to ₦10 million for each affected transaction.
The CBN said the revised manual seeks to strengthen oversight of foreign exchange inflows and outflows, improve reporting standards, reinforce enforcement mechanisms, and ensure that foreign exchange resources are deployed toward productive sectors of the economy.
Tougher Oversight of Banks
The new framework introduces a range of sanctions for violations within the Nigerian Foreign Exchange Market.
Banks that exceed approved Net Open Position limits will face escalating penalties. A first breach will attract a written warning, while a second violation will result in a 10-working-day suspension from the foreign exchange market. A third offence will lead to a 90-day suspension.
The apex bank also tightened reporting requirements for authorised dealers. Financial institutions are required to submit daily foreign exchange transaction returns by 10:00 a.m. on the following business day and file monthly returns within five working days after the end of each month.
Late submission of returns will attract a ₦500,000 penalty, while failure to submit returns will result in a minimum fine of ₦5 million, with an additional ₦500,000 charged for each day the violation remains unresolved.
In addition, banks have been warned against diverting foreign exchange allocations from their approved purposes without prior regulatory approval. Violators risk monetary sanctions, suspension of their authorised dealer licence for a minimum of six months, or outright revocation of the licence, depending on the severity of the offence.
Importers, Exporters Face Stricter Compliance Rules
The revised manual also introduces tighter controls for import and export transactions.
Importers are now required to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks. Failure to meet the deadline will result in restrictions on access to foreign exchange transactions, including the processing of Form M applications.
A first default will attract a 90-day restriction, increasing to 180 days for a second violation and 360 days for a third. A fourth offence will result in a permanent exclusion from the foreign exchange market.
Banks that fail to report importer defaults will face sanctions ranging from warnings to fines of ₦10 million per transaction.
For exporters, the CBN maintained strict repatriation requirements. Proceeds from non-oil exports must be repatriated and credited to the exporter's domiciliary account within 180 days of shipment, while proceeds from oil and gas exports must be returned within 90 days.
Exporters that fail to repatriate proceeds within the stipulated period will be penalised one per cent of the naira value of the outstanding amount. Banks that fail to enforce compliance among their customers will be fined 0.5 per cent of the outstanding proceeds.
The apex bank also reserved the right to sanction banks for delays in processing export documentation, non-payment of export supervision levies, and failure to submit required export-related returns.
Reforms to Improve Market Efficiency
Alongside the stricter enforcement measures, the revised manual introduces several operational reforms designed to improve efficiency in the foreign exchange market.
Among the changes, the allowable advance payment for imports has been increased from 15 per cent to 30 per cent. The CBN also approved a permissible variation of up to ±10 per cent in the Cost and Freight value declared on Form M and removed processing fees for Form NXP used in export declarations.
The updated framework further incorporates provisions covering service exports, technology-related remittances, transactions conducted through the Pan-African Payment and Settlement System, non-resident investment accounts, and tuition remittances of up to $25,000 per semester for students studying abroad.
The manual also removes the previously mandatory Form A requirement for remittances funded through ordinary domiciliary accounts, although banks will remain responsible for verifying the authenticity and purpose of such transactions.
Building Confidence in the Forex Market
According to the CBN, the revised Foreign Exchange Manual emerged from extensive consultations with banks, exporters, corporate organisations, regulators, and development partners.
The central bank said the reforms are intended to promote a transparent, rules-based and market-driven foreign exchange system, reduce transaction bottlenecks, strengthen compliance, boost investor confidence, and attract capital inflows.
CBN Governor Olayemi Cardoso described the review as part of the apex bank's commitment to strengthening macroeconomic stability and modernising Nigeria's foreign exchange administration. He noted that the update reflects evolving global economic conditions, domestic structural adjustments, and ongoing reforms in the country's foreign exchange market.
Deputy Governor, Corporate Services Directorate, Muhammad Abdullahi, said the revised manual forms part of broader reforms aimed at rebuilding trust, improving transparency, deepening market liquidity, and enhancing market efficiency.
"Our goal is to reduce transaction frictions, improve processing timelines, deepen market confidence, encourage formal market participation, and create a more seamless and efficient experience for legitimate users of Nigeria's foreign exchange market," Abdullahi said.
