CBN to Prosecute FX Violators After Forensic Audit Uncovers Widespread Breaches

The Central Bank of Nigeria (CBN) has concluded a forensic audit of foreign exchange (FX) forward transactions and is now considering civil and criminal charges against individuals and institutions found to have violated regulatory guidelines. The audit, conducted by Deloitte since September 2023, focused on FX forward contracts processed under the Retail Secondary Market Intervention Sales (RSMIS) window. Findings revealed serious infractions, including documentation irregularities, inflated transaction values, approvals for non-eligible imports, and allocations without legitimate FX demand. In a statement released on Thursday, August 7, 2025, the CBN confirmed that while verified and legitimate contracts have been settled, all invalid contracts were canceled and associated naira deposits refunded without any foreign exchange disbursement. According to the apex bank, many contracts failed to meet compliance requirements, with discrepancies such as mismatched beneficiary names, blank or improper Form M submissions, and instances of FX requests exceeding the value of declared imports. The CBN said these actions rendered the affected contracts void under Nigerian law. The bank stated that it is now reviewing appropriate legal steps, which could include administrative penalties, civil suits, or criminal prosecution. It also confirmed its readiness to collaborate with law enforcement and other regulatory agencies to hold violators accountable. The CBN emphasized that the audit process was independent and allowed affected dealers and clients an opportunity to provide explanations. It described the process as fair and transparent, adding that the matter is now closed and not subject to appeal. The apex bank noted that settling ineligible contracts would have depleted national FX reserves and undermined regulatory authority, stressing its commitment to restoring order and confidence in the FX market. This development is part of the CBN’s broader reform agenda under Governor Olayemi Cardoso, aimed at enhancing transparency, strengthening compliance, and stabilizing Nigeria’s foreign exchange system.