The House of Representatives has uncovered that five major banks in Nigeria are withholding over $5 billion in foreign exchange reserves. This is contributing to the instability in the forex market.
The House also directed its Banking Committees to investigate why banks are not complying with Central Bank of Nigeria (CBN) directives on Net Open Position Limits – which measure how much foreign currency banks can hold versus what they owe.
The resolution followed the adoption of a motion on a Matter of Urgent National Importance regarding the need for banks to implement CBN’s policies on holding excess long foreign exchange and net open position limits, sponsored by Chairman of the House Committee on Defence, Babajimi Benson.
According to Benson, GTBank, Zenith Bank, UBA, and First Bank have over $5 billion in excess forex holdings as of January 2024.
Only Stanbic IBTC is fully compliant, making all its forex reserves available to customers.
The House expressed concerns that banks obtain forex from CBN at official rates, but hoard and sell it at higher rates for extra profit – a speculative practice exacerbating Nigeria’s harsh economic situation.