CBN foreign exchange penalty regime imposes N100m fines, stricter FX rules, and sanctions on banks and exporters in sweeping compliance overhaul

The Central Bank of Nigeria (CBN) has introduced a sweeping enforcement regime imposing a CBN Foreign Exchange Penalty of N100 million on authorised banks that process foreign exchange transactions without adequate documentation in Lagos, Nigeria, on 5 June 2026.

Also read: CBN unveils stronger FX manual to boost market confidence

The directive was contained in the apex bank’s newly released fourth edition of its Foreign Exchange Manual, issued by the Trade and Exchange Department, marking the first major overhaul of Nigeria’s FX rulebook since 2017.

Under the new offences and sanctions framework, authorised dealers will pay N100 million in addition to N10 million per transaction for executing FX deals lacking proper documentation.

The CBN said the measure is designed to strengthen compliance, improve transparency, and curb regulatory abuses in the foreign exchange market.

The CBN Foreign Exchange Penalty forms part of a broader tightening of oversight across Nigeria’s FX ecosystem, targeting both banks and market participants in a bid to enforce stricter discipline.

The revised manual introduces escalating sanctions for banks that breach Net Open Position limits.

First-time offenders will receive warning letters, while repeat violations attract a 10-working-day suspension and, subsequently, a 90-day suspension from the FX market for third offences.

Reporting obligations have also been significantly tightened. Banks are now required to submit daily FX transaction returns by 10 a.m. the following day, alongside monthly returns within five working days after month-end.

Failure to comply attracts penalties ranging from N500,000 for late submissions to a minimum of N5 million for non-rendition, with an additional N500,000 charged daily for continued breaches.

The apex bank further warned that unauthorised reallocation of foreign exchange funds could result in severe sanctions, including monetary fines, suspension of dealership licences for at least six months, or outright revocation depending on the gravity of the violation.

Import documentation rules have also been strengthened. Importers must submit Exchange Control Documents within 90 days of negotiating shipping papers.

Non-compliance will trigger restrictions on accessing FX services, including Form M processing, with penalties escalating from 90-day restrictions to a permanent ban after repeated violations.

Exporters are also affected by the reforms. Non-oil export proceeds must be repatriated within 180 days, while oil and gas proceeds must be received within 90 days.

Failure to comply will attract penalties of 1 per cent of outstanding naira value for exporters, alongside 0.5 per cent fines for banks that fail to enforce compliance.

Beyond sanctions, the manual introduces operational reforms aimed at improving efficiency in the FX market.

These include raising allowable advance payments for imports from 15 per cent to 30 per cent, introducing a ±10 per cent tolerance margin for import declarations, and removing Form NXP processing fees for exporters.

It also expands coverage to include service exports, digital and technology-related remittances, Pan-African Payment and Settlement System transactions, non-resident investment accounts, and tuition payments of up to $25,000 per semester for foreign education.

CBN Governor Olayemi Cardoso said the reforms reflect efforts to modernise Nigeria’s FX framework in response to global economic shifts and domestic reforms.

He described the revised manual as part of a wider push to strengthen macroeconomic stability.

CBN Deputy Governor for Corporate Services, Dr Muhammad Abdullahi, said the overhaul is intended to restore confidence, deepen liquidity, and reduce transaction frictions in the FX market while aligning Nigeria with international best practices.

Also read: CBN absorbs N1.95tn in aggressive liquidity mop-up

The CBN said the CBN Foreign Exchange Penalty regime and wider reforms are expected to improve compliance, reduce bottlenecks, attract investment inflows, and strengthen confidence in Nigeria’s foreign exchange system.