Fidelity Bank, FCMB clarify suspension from forex market

Two banks Fidelity Bank Plc and First City Monument Bank (FCMB) Plc have clarified issues relating to their Tuesday’s suspension from the Foreign Exchange Market (FOREX) by the Central Bank of Nigeria (CBN).

The two banks and seven others were sanctioned by the apex bank for non-remittance of Nigerian National Petroleum Corporation/Nigeria Liquefied Natural Gas (NNPC/NLNG) deposits to the Treasury Single Account (TSA).

The bank said that the CBN’s action does not affect the operations of its custom­ers’ domiciliary accounts.

In a statement issued yester­day, the management of Fidelity Bank said that the deposits were reported to the CBN.

The statement read: “You might have read about the re­cent developments in the in­dustry where the Central Bank of Nigeria (CBN) announced a temporary suspension of nine commercial banks from the for­eign exchange market due to the non-remittance of NNPC/NLNG deposits.

“We will like to clarify that these deposits were duly report­ed to the CBN by Fidelity Bank in line with the extant TSA re­quirements contrary to the er­roneous view in certain media reports that the funds were con­cealed from the regulators.

“At the commencement of the Treasury Single Account (TSA) in 2015, Fidelity Bank advised NNPC and the regula­tors with a schedule of repay­ment for the NNPC/NLNG dividend dollar deposits.

“Fidelity Bank has repaid over $288 million of these funds in line with the advised repay­ment schedule.

“Please note that you can continue to operate your dom­iciliary accounts with Fidelity and this development will not affect your deposits/loans (lo­cal and foreign currency), re­mittances, transactional ser­vices and electronic banking services.

“Although the market con­dition remains quite challeng­ing, we will continue to hon­our our obligations and operate with the highest level of corpo­rate governance.

“In the interim, we are en­gaging with the other eight banks involved, stakeholders and the regulators to resolve this issue quickly and ensure our return to the FX market,” the bank said.

In its account, FCMB con­firmed its temporary suspen­sion along with eight other commercial banks from ac­cessing the foreign exchange market.

The management said the CBN’s action was based on the Treasury Single Account Direc­tive, “which stops banks from holding funds on behalf of gov­ernment entities and instead, effect daily remittances to the CBN. “For our bank, this sce­nario is based on our non-pay­ment/transfer of the remaining $125million NNPC fund with us to TSA.

“As a financial institution with strong corporate govern­ance rules, we have always fully disclosed the outstanding TSA funds in our books and have continued to work assiduous­ly to fulfill our outstanding ob­ligations. The members of the NNPC Management Team have been kept fully in the picture on the funds. This development is really because of lack of foreign exchange availability and the prevailing fall in oil prices, rath­er than concealment or willful non-compliance by FCMB. It is actually a widespread indus­try issue.

“In conjunction with the other institutions, we are work­ing closely with the Central Bank of Nigeria for an amica­ble and mutually beneficial res­olution of this scenario.

“As an institution, our fun­damentals remain strong, our franchise is still growing and we remain firmly committed to our professional values,” the bank said.