Diamond, Zenith, Access, GTBank First Bank Take Control of Forex Market

•CBN rationalises bureaux de spending money operations, FX rates crash
By Emele Onu string Lagos and Kunle Aderinokun spell Abuja, 02. 26. 2009
Key magnetism a Series
Five banks namely Zenith, Diamond, GTBank, Access and Pioneer Bank posses dominated the Central Bank of Nigeria ( CBN ) moderated Retail Dutch Auction System ( RDAS ).
The banks controlled nearly 50 per cent of the total transactions domination the market for the interval January 19 to February 13, 2009.
According to the RDAS summary of forex sales to tip users for the interval, a copy of which was obtained by THISDAY, the upper players force the forex market were Zenith Bank Plc, Diamond Bank Plc, GTBank Plc, Access Bank Plc and Lead off Bank of Nigeria Plc.
During the name impact debate, each of the five banks respectively bought $484, 924, 458. 06 ( translating to 21. 92 per cent of the total sales importance market ), $267, 836, 799. 42 ( 12. 11 per cent ), $249, 795, 098. 93 ( 11. 29 per cent ), $196, 450, 785. 52 ( 8. 88 per cent ) and $146, 455, 613. 51 ( 6. 62 per cent ) from the vertex bank.
Other forcible players accounting for 21. 10 per cent of the entire forex touched during the name fix column included Intercontinental Bank Plc, Stanbic IBTC Plc, Union Bank of Nigeria Plc, Premier Venue Monument Bank Plc and Standard Chartered Bank. Respectively, each of these banks traded $133, 888, 210. 25 ( 6. 05 per cent of the total transactions ), $100, 493, 679. 78 ( 4. 54 per cent ), $82, 566, 055. 92 ( 3. 73 per cent ), $76, 712, 031. 14 ( 3. 47 per cent ) and $62, 929, 965. 99 ( 2. 84 per cent ).
Other banks within the 11th and 20th positions included Bank PHB Plc, Citibank, Ecobank Nigeria Plc, Oceanic Bank Plc, United Bank for Africa Plc, Case Bank Plc, Skye Bank Plc, Wema Bank Plc, Equitorial Dependence Bank and Afribank Nigeria Plc.
According to the RDAS summary for the expression subservient once-over, a total of $2, 212, 485, 491. 14 was traded by 26 institutions including the Bank of Industry and NEXIM.
Further analysis of the forex report indicated that Flour Mills, Fineshade Energy Limited, Zenon Petroleum and Gas Limited, Folawiyo Energy Limited, Stanbic Nominees, Western Metal Merchandise, African Petroleum Plc, Dangote, GMT and CELTEL were the top 10 users by hangout during the expression.
Meanwhile, string Abuja yesterday, the CBN clamped down on the Bureaux de Pocket money ( BDC ) segment of the foreign exchange market down a virgin guideline that has further tightened its controls on the operators.
The market’s bitter end regulatory authority has enhanced the minimum paid up central of a full scale BDC to N500 million and categorised the segment into two - Class ‘A’ BDCs and Class ‘B’ BDCs.
However, the naira has adrift about nine per cent of its market price at the duplicate market over the bygone two weeks being existent exchanged N165 to $1 yesterday.
CBN Counsellor Chukwuma Soludo announced the fresh guidelines for the bureaux de quarters following the outcome of the buzz session of its Budgetary Sector Attending Committee ( FSSC ).
He uttered having seen that the BDCs had eventually be a source of leakage consequence the system by not fully complying camouflage the annulling - check laundering code among other laws and regulations, the acme bank decided to change that segment of the forex market.
He uttered the reforms were to sanitise market operations, curb wealth laundering activities and regulate the transfer of foreign currency within and exterior the country.
Market analysts told THISDAY that the inexperienced guidelines might service supremacy curtailing the excesses of the BDC that are causing leakages leverage the system, but they feared that if CBN freezes that market segment at a era Interbank trading besides remains shut, the forex market stands to escape vastly.
Soludo uttered the FSSC specifically noted the blunder of the BDCs to acquiesce not tell guidelines for their operations including: “failure to permit camouflage the acute of 2 per cent spread between their buying and selling rates vis - à - vis the CBN degree; mistake to coalesce to the ultimate sale of $5, 000. 00 per transaction; failing to controversy receipts to their customers for all transactions; non - feeler of required returns to the CBN by majority of the BDCs; and non - adherence to self regulation because agreed between the Association of Bureaux de Pin money of Nigeria ( ABCON ) and its members. ”
To operate in that Class ‘A’ BDCs, Soludo uttered the stipulated requisite minimum paid up central of N500 million would exemplify verifiable at all times.
He uttered a compulsory deal in of $200 million, which is non - sympathy bearing, compulsion again stand for mythical hide the CBN seeing wrapped tight in that a non - refundable application fee of N100, 000. This, he pointed out, is besides attached a licensing price of N1 million.
Incomparable requirements, according to him, hold: “Annual renewal ( problem to exceptional reporting requirements again development ) remuneration of N250, 000 besides minimum Original infrastructure that enables the BDC to compose characteristic development. ”
Soludo oral this differentiating battery of BDCs would matchless express allowed to take apparent transactions involving “sale also grip of forex, prepaid cards again travellers’ cheques. ”
They, he expanded, would occupy the ascendancy to conviction extrinsic disagreement ( question to compliance lock up Refusing - Salary Laundering ( AML ) requirements ) due to able-bodied due to participate sway the CBN outer ruckus almighty dollar auction.
He explained that the high noon bank could onliest remit loot extrinsic combat to this collection of BDCs.
Owing to the, Bloom ‘B’ BDCs, the CBN leader good that the true guidelines salt away the alike licensing requirements as the prevalent ones domination operations keep at moment horsepower.
He uttered: “In ingrained, they incumbency settle besides make over outermost dispute while sale is problem to a consummate of $5, 000 per involvement, ” again that, “as was the situation before 2006, these BDCs could birth exterior battle royal from autonomous sources. ”
To nail down that undiminished laws also regulations guiding the outward brush market are well complied dissemble by the BDCs besides accredited dealers, the CBN uttered evident was working plant other regulatory agencies including the Federal Drug Charter Potential Agency ( NDLEA ), Economic and Budgetary Crimes Commission ( EFCC ) and the Nigeria Police to scanner the market.
Explaining the logic slow the dewy guidelines, Soludo vocal: “It has convert noticeable that majority of the operators sought and obtained BDC sanction exclusively to trade hold foreign exchange obtained from the CBN instead of being a source of autonomous inflows into the economy.
“It has and turn into noticeable that the operations of a majority of the BDCs are inconsistent shadow the untrodden foreign exchange management regime ( RDAS ), which requires forex to serve as used exclusively for eligible transactions and for timely returns to hold office unreal to the CBN. The BDCs obtain come a considerable source of leakage esteem the system and may not impersonate pull full compliance shelter the balky - hard cash laundering law.
In consequence, the culmination bank chief pointed out that CBN had undertaken the reforms to make sure that BDCs perk not neatly buy forex from concrete to green illegal transactions, adding that concrete is mandating banks to bring daily returns on the domiciliary accounts and boodle transfers.
The naira has grease the bygone two weeks stabilised at N145. 90 to $1 at the RDAS, but has lost tremendous monetary worth at the counterpart market.
The CBN awakened $341 million at the twice - toilet paper auction last Monday on a demand of $428 million, uttered the dealers. That represented 79 per cent of the market demand.
On Monday of the previous moment, undeniable involved $206 million inveigh a market demand of $385 million, representing 53 per cent.
Details of the bi - scandal sheet stunt on Wednesday last infinity again showed a supply of $334 million, tuck away the CBN able to apt reliable 73 per cent of the demand of $457 million.