According to Hon. Babajimi Benson (APC, Lagos) who raised the issue in a motion at plenary on Wednesday, commercial banks and certain financial institutions in Nigeria withhold a large part of forex.
By Ife Osemedua
365Daily – The House of Representatives on Wednesday mandated its committees on Banking Regulations and Banking Institutions to conduct an investigation into banks and financial institutions over failure to comply with the Central Bank of Nigeria (CBN)’s directives on Net Open Position (NOP) limits.
According to Hon. Babajimi Benson (APC, Lagos) who raised the issue in a motion at plenary on Wednesday, commercial banks and certain financial institutions in Nigeria withhold a large part of forex obtained either through purchase, borrowing or allocation from the CBN.
Moving the motion, Hon. Benson noted the steady rise in the rate of the dollar in comparison to the naira, which he attributed to diverse market forces and certain economic policies adopted by the government, including the liberalisation of the dollar.
He added that the situation was aggravated by banks and other financial who, rather than make the dollars available to their customers, withhold i in order to sell when the exchange rate is high.
This speculative activity, he continued, has led to difficulty by legitimate businesses to obtain forex for their business transactions, while further worsening the economy.
The Lawmaker noted that the CBN had intervened by introducing new monetary policies to check the rise in the rate of dollar, including the net open position limits and holding excess long foreign exchange.
However, he lamented, commercial banks and certain financial institutions were reluctant to implement the monetary measures put in place by CBN to check such unwholesome practices by banks and other financial institutions in the country.