Suspended banks blame forex scarcity for non-remittance of NNPC funds

•FBN, Fidelity deny concealment, meet CBN  •UBA readmitted to forex trading

Following the suspension of their banks from the foreign exchange market, bank executives on Thursday met with officials of the Central Bank of Nigeria (CBN), even as some of them blamed the development on lack of foreign exchange availability and the prevailing fall in oil prices rather than concealment or willful non-compliance.

Some of the banks had on Wednesday sent emails to their customers to clarify the suspension and how it would affect their bank accounts, as well as steps taken to resolve the impasse.

The suspensions from the interbank market were imposed after the banks failed to remit $2.1 billion which is the government’s share of dividends from Nigerian Liquefied Natural Gas (NLNG) that they were due to pay into the Treasury Single Account at the CBN.

One of the nine banks, First City Monument Bank (FCMB), said it was working with the apex bank to resolve the issue, which was a function of illiquidity in the currency markets and the weak economy rather than willful non-compliance.

A statement issued the FCMB read: “For our bank, this scenario is based on our non-payment/transfer of the remaining $125 million NNPC fund with us to TSA. As a financial institution with strong corporate governance rules, we have always fully disclosed the outstanding TSA funds in our books and have continued to work assiduously to fulfill our outstanding obligations.

“The members of the NNPC management team have been kept fully in the picture on the funds. This development is really because of lack of foreign exchange availability and the prevailing fall in oil prices rather than concealment or willful non-compliance by FCMB.

“It is actually a widespread industry issue. In conjunction with the other institutions, we are working closely with the Central Bank of Nigeria for an amicable and mutually beneficial resolution of this scenario. As an institution, our fundamentals remain strong, our franchise is still growing and we remain firmly committed to our professional values.”

First Bank, on its part said it remits government funds when due but was discussing with the central bank and state-oil firm on ways of retaining the dollars to help solve forex shortages and meet its obligations.

Fidelity Bank said the deposits were duly reported to the CBN in line with the extant TSA requirements contrary to the erroneous view in certain media reports that the funds were concealed from the regulators.

The bank said it had advised NNPC and the regulators with a schedule of repayment for the NNPC/NLNG Dividend dollar deposits, and has repaid over $288 million of the funds in line with the advised repayment schedule.

UBA also denied it had withheld any government funds as its spokesperson, Charles Aigbe said the bank “completely remitted all NNPC and NLNG dollar deposits.”

But the bank, on Wednesday, readmitted into the forex market by the CBN.