CBN Unveils Tougher Forex Compliance Rules

The Central Bank of Nigeria (CBN) has introduced stricter penalties for breaches in the country’s foreign exchange market, including a N100m forex penalty for banks that process foreign exchange transactions without the required documentation.

Under the fourth edition of its newly released Foreign Exchange Manual, authorised dealers that complete foreign exchange transactions with inadequate records will face a N100m fine alongside an additional N10m charge for each affected transaction. The N100m forex penalty forms part of a wider effort to strengthen oversight, improve transparency and enforce compliance across the market.

The updated manual, released by the CBN’s Trade and Exchange Department in May 2026, marks the first major revision since 2017. It provides guidance for banks, exporters, investors, authorised buyers and other participants in foreign exchange activities.

The regulator also introduced tougher sanctions for banks that exceed approved Net Open Position limits. While a first offence attracts a warning, repeated violations could lead to suspensions ranging from 10 working days to 90 days from the foreign exchange market.

Reporting requirements have also become more stringent. Banks must submit daily foreign exchange transaction reports by 10 a.m. for the previous day and monthly returns within five working days after each month ends. Late submissions will attract a N500,000 fine, while non-compliance carries a minimum penalty of N5m plus an additional N500,000 for every day the breach continues.

The N100m forex penalty is one of several measures aimed at improving accountability. The manual also imposes stricter rules on importers and exporters, including deadlines for submitting documentation and repatriating export proceeds. Violators face restrictions, financial penalties and possible exclusion from the market.

Alongside the enforcement measures, the CBN introduced reforms designed to improve efficiency. These include raising the allowable advance payment for imports from 15 per cent to 30 per cent, removing processing fees for export-related Form NXP applications and simplifying certain remittance procedures.

According to the apex bank, the reforms support a transparent and market-driven foreign exchange system. The N100m forex penalty and other compliance measures are expected to boost confidence, encourage investment inflows and strengthen the integrity of Nigeria’s foreign exchange market.

Do you think stricter penalties will improve compliance and stability in Nigeria’s foreign exchange market?