CBN Uncovers Forex Violations in 34 Banks, Mandates Penalties Following 2025 Annual Review

The Central Bank of Nigeria (CBN) has identified significant foreign exchange (FX) infractions among authorised dealers, following a comprehensive review of 34 financial institutions as detailed in its 2025 Annual Report. While the majority of banks demonstrated broad compliance with existing FX regulations, the apex bank’s supervisory activities uncovered specific violations, prompting recommendations for appropriate penalties.

The examination, which assessed compliance from April 1, 2024, to March 31, 2025, scrutinised how banks adhered to FX regulations, the eligibility of transactions for foreign exchange, and the flow of funds from major sources. This rigorous oversight is a cornerstone of the CBN’s risk-based supervisory framework, designed to fortify the stability and integrity of Nigeria’s financial system.

In parallel with its FX-specific examinations, the CBN, in collaboration with the Nigeria Deposit Insurance Corporation (NDIC), conducted extensive joint examinations. These included a Joint Risk Assets Assessment Examination in February 2025, covering all banks to evaluate the quality of loan portfolios and the adequacy of loan loss provisions for 2024 financial statements. Furthermore, between August and September 2025, the CBN and NDIC undertook Risk-Based Examinations of 17 banks with “Moderate” and “Low” composite risk ratings, alongside three financial holding companies, using June 30, 2025, ratings as the basis for selection.

To enhance its supervisory capabilities, the CBN has also invested in upgrading its technological infrastructure. The Credit Assessment and Analysis System (CAAS) was upgraded to an enterprise version, significantly improving data processing speed, report generation, and the capacity to handle large datasets. This enhanced system was deployed during the 2025 Risk-Based and Risk Assets examinations. Additionally, the launch of the Licensing and Other Requests Approval Portal (LARP) on October 6, 2025, has automated key approval processes, including staff clearances and senior management appointments, thereby increasing transparency and strengthening governance.

These findings and regulatory actions underscore the CBN’s commitment to enforcing compliance and maintaining a robust financial sector. For legal professionals, compliance officers, and corporate executives, these developments highlight the critical importance of meticulous adherence to FX regulations and the potential for significant penalties in cases of non-compliance. The enhanced supervisory tools also signal a more proactive and data-driven approach by the CBN, demanding greater diligence from all regulated entities.

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