CBN Investigates Forex Round Tripping in 7 Banks

Oct 6, 2011 – The Central Bank of Nigeria (CBN) has started another round of forensic investigation in seven commercial banks over alleged round tripping of foreign exchange.

Round tripping is the practice of selling foreign exchange sourced from CBN at the black market to make gains.

Sources at the CBN say that the investigation would be the second round of the CBN examination of the banks.

The investigation, which started on Tuesday, October 4, involved First City Monument Bank (FCMB), Sterling Bank, Skye Bank and Equatorial Trust Bank (ETB). Others are Diamond Bank, Fidelity Bank and Ecobank.

The second batch of investigation was alleged to be part of plans by the CBN to sanitise foreign exchange transactions in commercial banks.

The investigation, scheduled to last for three weeks, would pave way for the third and last round of forensic investigation in the remaining banks.

It was learnt that the CBN had already spelt out punishments that would be meted to banks involved in round tripping and other violations of foreign exchange transactions at the end of the exercise.

It also gathered that unlike previous investigations, the CBN intends to publish the outcome of the exercise.

The CBN, had in September, investigated Access Bank, Zenith Bank, GT Bank and First Bank for alleged foreign exchange offences. The others that faced the CBN search light in September were Standard Chartered Bank, Stanbic IBTC Bank and UBA.

Abdulahi Mohammed, CBN Head of Corporate Communications, confirmed the investigation, but declined further comments.

Some stakeholders in the banking industry had early in the year accused commercial banks of wide spread round tripping of foreign exchange. Daily Times