CBN Introduces N100m Penalty for Forex Transactions with Inadequate Paperwork

The Central Bank of Nigeria (CBN) has introduced a N100 million penalty for financial institutions that engage in foreign exchange transactions without adequate supporting documentation, according to the newly released fourth edition of its Foreign Exchange Manual.

Under the section outlining offences and punishments, the apex bank stated that authorised dealers will pay N100m in addition to N10m per transaction for completing forex deals backed by insufficient paperwork. The penalty is part of broader efforts to sharpen oversight of the foreign currency market, raise compliance standards, and curb misconduct by authorised dealers and other market participants.

The updated manual, released by the CBN's Trade and Exchange Department in May 2026, marks the first major revision in nearly a decade, with the previous edition dating back to 2017. It serves as a regulatory roadmap for banks, licensed buyers, exporters, investors, and ordinary Nigerians involved in foreign exchange transactions.

According to the central bank, the manual aims to improve transparency in foreign currency inflows and outflows, set clear documentation and reporting guidelines, reinforce enforcement mechanisms, and support national economic priorities by ensuring forex is directed toward productive activities.

Beyond the N100 million fine, the manual outlines escalating penalties for various infractions. Banks that exceed their approved Net Open Position limits will face progressively harsher consequences: a first violation triggers a written warning, a second results in a ten-working-day suspension from the forex market, and a third leads to a 90-day suspension. The CBN has also tightened reporting rules for authorised dealers.