New foreign exchange rules introduce tougher penalties, stricter reporting requirements and reforms aimed at boosting transparency and investor confidence…..
The Central Bank of Nigeria (CBN) has unveiled a sweeping compliance framework for the foreign exchange market, introducing a N100 million penalty for banks that process foreign exchange transactions without proper documentation.
The sanction, contained in the newly released fourth edition of the Foreign Exchange Manual, marks one of the toughest regulatory measures introduced by the apex bank as it moves to strengthen oversight of Nigeria’s forex market and curb abuses by authorised dealers.
Under the revised guidelines, banks found guilty of consummating foreign exchange transactions without adequate supporting documents will face a N100 million fine, in addition to a N10 million penalty for every affected transaction.
The updated manual, issued by the CBN’s Trade and Exchange Department in May 2026, represents the first comprehensive review of Nigeria’s foreign exchange operating framework since 2017.
According to the apex bank, the revised rules are designed to improve transparency, tighten compliance standards, strengthen reporting obligations and ensure that foreign exchange resources are directed toward productive sectors of the economy.
Tougher Sanctions for Market Violations
Beyond documentation breaches, the CBN introduced a range of sanctions targeting violations across the Nigerian Foreign Exchange Market.
Banks that exceed approved Net Open Position limits will face escalating disciplinary measures. A first violation will attract a warning, while a second offence could lead to a 10-working-day suspension from participating in the forex market. A third breach may result in a 90-day suspension.
The regulator also intensified reporting requirements for authorised dealers.
Under the new framework, banks must submit daily reports on foreign exchange transactions by 10 a.m. on the following business day, while monthly returns must be filed within five working days after month-end.
Failure to comply carries significant financial consequences. Late submission of returns will attract a N500,000 fine, while failure to render returns will result in a minimum penalty of N5 million, alongside an additional N500,000 for every day the violation remains unresolved.
Importers, Exporters Face Stricter Compliance Rules
Import-related transactions received increased regulatory attention in the revised manual.
Importers are now required to submit Exchange Control Documents within 90 days of negotiating shipping documents with overseas correspondent banks. Failure to meet this deadline could result in restrictions on access to foreign exchange services, including the processing of Form M applications.
The penalties become progressively stricter for repeat offenders. A first violation attracts a 90-day restriction, while second, third and fourth offences could lead to restrictions lasting 180 days, 360 days and ultimately a complete ban from the forex market.
Banks that fail to report such infractions may also face sanctions, including a N10 million penalty for each affected transaction.
Exporters are equally subject to tighter obligations.
The manual requires non-oil export proceeds to be repatriated within 180 days of shipment, while proceeds from oil and gas exports must be received within 90 days.
Exporters who fail to repatriate earnings within the stipulated period will be required to pay a penalty equivalent to one per cent of the naira value of the outstanding proceeds. Banks that fail to enforce compliance will be fined 0.5 per cent of the outstanding amount.
Key Reforms Introduced
Alongside the sanctions, the CBN announced several reforms aimed at improving efficiency and reducing transaction bottlenecks within the forex market.
Among the major changes is an increase in allowable advance payment for imports from 15 per cent to 30 per cent.
The regulator also introduced a permissible import shortfall or excess margin of plus or minus 10 per cent of the Cost and Freight value on Form M and eliminated processing fees for Form NXP used in export transactions.
The revised framework further provides guidance for service exports, technology-related remittances, Pan-African Payment and Settlement System transactions, non-resident investment accounts and tuition fee remittances of up to $25,000 per semester for students studying abroad.
In another significant adjustment, the CBN removed the mandatory requirement for Form A in remittances funded through ordinary domiciliary accounts, although banks are still expected to verify the legitimacy and purpose of such transactions.
CBN: Reforms Will Strengthen Market Confidence
The apex bank said the revised manual was developed following extensive consultations with financial institutions, exporters, corporate organisations, regulators and development partners.
According to the CBN, the new framework is expected to improve compliance levels, reduce operational bottlenecks, attract investment inflows and enhance confidence in Nigeria’s foreign exchange market.
CBN Governor Olayemi Cardoso said the review reflects the bank’s commitment to strengthening macroeconomic stability and modernising foreign exchange administration in line with changing economic realities.
Similarly, Deputy Governor for Corporate Services, Dr Muhammad Abdullahi, noted that the reforms are part of broader efforts to improve transparency, deepen market liquidity and align Nigeria’s forex system with international best practices.
“Our goal is to reduce transaction frictions, improve processing timelines, deepen market confidence, encourage formal market participation and create a more seamless experience for legitimate users of Nigeria’s foreign exchange market,” he said.
With the introduction of tougher sanctions and expanded compliance requirements, the CBN appears determined to enforce stricter discipline across the forex market while laying the groundwork for a more transparent and efficient foreign exchange system.
