Regulatory Alerts2024-03-14 | BSD/DIR/PUB/LAB/017/003Re: Impact of Recent Policy Reforms-Prudential Guidance to the Banking Sector
The Central Bank of Nigeria has issued a letter to all banks, reminding them of the requirement to set aside foreign currency revaluation gains as a buffer against potential negative FX rate movements. Banks are instructed not to use these gains for dividend payments or operational expenses. This guidance aims to ensure the banking sector remains stable and resilient in the face of potential FX rate fluctuations.
Central Bank of Nigeria Banking Supervision Department P.M.B. 12194 Tinubu Square, Lagos.
Email: bsd@cbn.gov.ng Website: www.cbn.gov.ng 09-4623603 Tel: ........................
BSD/DIR/PUB/LAB/017/003 March 14, 2024 LETTER TO ALL BANKS RE: IMPACT OF RECENT FX POLICY REFORMS: PRUDENTIAL GUIDANCE TO THE BANKING SECTOR Further to our letter dated September 11, 2023, referenced BSD/DIR/CON/LAB/16/020 on the above subject, the Central Bank of Nigeria wishes to reiterate that banks are required to exercise utmost prudence and set aside FCY revaluation gains as a counter-cyclical buffer to cushion any adverse movements in the FX rate.
In this regard, banks shall not utilize such FX revaluation gains to pay dividends or meet operating expenses. Please be guided accordingly.
Yours faithfully, DR. ADETONA S. ADEDEJI AG. DIRECTOR, BANKING SUPERVISION DEPARTMENT