A former Deputy Governor of the Central Bank of Nigeria, Dr. Obadiah Mailafia, says commercial banks in the country cannot be trusted with forex sales, adding that they will “corner” the dollars and only release whatever that is left after satisfying their interest.

He spoke on Wednesday while featuring on PUNCH Online interview programme, The Roundtable.

The PUNCH had earlier reported that CBN Governor, Godwin Emefiele, on Tuesday, said Bureau de Change Operators in the country are greedy and make abnormal profit from forex sales.

Emefiele also announced the discontinuation of and new licence approval after the Monetary Policy Committee two-day meeting in Abuja.

The CBN had been supplying each licensed BDCs $20,000 per week at the rate of N393 with the instruction that they should sell with a margin of N2 but some of them sell as high as N505, making over N100 on every dollar sold.

According to Emefiele, BDC operators in the country continue to abuse the privilege, hence, the need to stop forex sales to them.
The CBN governor said commercial banks would be monitored to provide forex for the legitimate use of Nigerians.

But Mailafia said commercial banks cannot be trusted and would sell the dollar at any rate they wish.

“How can you totally trust these commercial banks because most of them will want to corner the dollar for themselves and whatever is left, then they can now share with the market at a rate they want?” he queried on PUNCH Roundtable.

The former deputy governor of the apex bank also said, “On the naira, it is not just the underlying economic fundamentals that matters like interest rate, inflation and so on, these things matter and the level of debt affect it but there are the non-quantifiable elements like violence, instability, rural banditry and terrorism, those things undermine the productive capacity of the economy. They also destroy social capital, the trust that holds the community together to do businesses together.

“If we are not careful, that decision will actually worsen the naira value because the BDCs, you could walk into any of them anywhere and within five minutes, they will attend to you but the banks, you have to drive to your nearest bank, you have to queue most of the time.
The CBN has not told us the rate, the banks will want to make a profit over the official rate, we don’t know whether they will make a decent profit or they will profiteer. Bankers were the biggest experts in round-tripping. Old habits, I don’t think they change. Leopards are very unlikely to change their spots.

“So, we may end up in a scenario where there is scarcity and the simple economics of demand and supply tells you that where there is increase scarcity, price is likely to shoot up.

“If bank bureaucracy makes it difficult for people to access dollar, what it means is that the bureaucracies, obstacles and bottlenecks are likely to put pressure on supply and pressure on supply may mean an increase in demand for the dollar and greater fall of the naira, if we don’t play the cards well.”

Source: https://punchng.com/bdcs-banks-cant-be-trusted-will-hoard-dollars-says-mailafia/

I agreed with Mailafia.
1. Being a former CBN staff, he understands the game;
2. From personal experience, I can't trust DMBs. It will interest you to know that DMBs hoard mints and resale to their own people

This man is always speaking the truth!

Nigeria banks are not much different from the so called BDC. They will hoard the dollars and recommend you buy from a Malam

Then stop dollar being a legal tender on Nigeria soil. Naira is our own currency and that should be the currency for local transactions. When it comes to foreign transactions, there should be electronic conversion via commercial banks ( through individual account that is domiciled in a commercial banks) and this does not involve physical touch of Dollars . Our leaders know what to do but there is no political will to do it
Can you go to United States and find Naira being moved physically ? Or China ?

Ceenachi:
Then stop dollar being a legal tender on Nigeria soil. Naira is our own currency and that should be the currency for local transactions. When it comes to foreign transactions, there should be electronic conversion via commercial banks ( through individual account that is domiciled in a commercial banks) and this does not involve physical touch of Dollars . Our leaders know what to do but there is no political will to do it

Can you go to United States and find Naira being moved physically ? Or China ?

This is always what I have thought to be a good solution to this dollar issue.

Let the DMBs sell e-dollars for FCY remittance. and for BTA they can issue a travelers cheque or visa/master card with higher daily withdrawal limit. This way nobody needs cash dollars.

For those wanting dollar to pay school fee in Nigerian school, same e-dollar bought at counter and transferred to the schools dormicilliary account.

Why can’t we just find a simple easy way for those dollar issue. This cbn’s back and forth with BDC is just creating problems for the economy. Dollar is now 525... expect another uptick in the price of goods, and eventually price of service; meanwhile salary for the employed remains the same, creating need for the employed to find a “short-cut” means to make up for the deficiencies in their personal finance. Of course, expect more corruption! More agbero harassing truckers and commercial buses, more cases of police extortion, more bureaucracy at government office, and many more.

Why is it so hard for our policy makers / administrators in this country to make / implement the best policy for our numerous problems?

Why do they always put their interest above the people?

Why is everything so hard and difficult in this country?

Why?

Take “inner” city roads as an example:
Since they can not build “inner” city roads, why can’t they initiate a policy that would encourage home owners to interlock the half portion of road in front their building, and waive some of the land use charge. By so doing, we can have better inner city roads.

Lol

Forget about dollars, banks can't be trusted generally.

That was how a client paid me via Western Union, and the same client started receiving strange calls from Nigeria.

I never exposed our transaction to a third party, but this same client started getting unsolicited phone calls from Nigerians with fake accents.

Thanks to Pay Pal!

Ok

The CBN and DMB's are amongst the most deadly hostilities existing, against we the people and against the principles and form of our Constitution. Ignorance is bliss.

Of course, as long as the head and managers of the bank are Nigerians, they will surely engage in nefarious activities, since 99% of Nigerians are corrupt.

The CBN will continue to closely monitor banks conduct and compliance with this directive in order to ensure an efficient FX market for all legitimate users.

Note that any breach of the directive by any banks will be severely sanctioned.

Simplythebest:
Bank don't withhold dollars. Have u ever go to bank to collect western union and the told u no dollar? Or have u requested for PTA and the bank told u no dollar. I think this the best decision CBN has made so far. They can control and checkmate the bank not not those BDC

True that.

post=104206763:
Reading

Drop the trash

Very true

That's the gospel truth

You all will learn the hard way.
At times I wonder if that Emefiele really earned his degrees, because I have never seen a CBN governor as clueless and stupid as he is.
When 1 dollar hits 700naira or 900naira we will all be here.

Time for banks to cash out big time,this is the real time to be a banker.crypto is the real way to go,nobody can hoard,only the market decides.

War

This is sad. So CBN sells $20,000 to BDC every week at the rate of ₦393 and these guys resells to us at the rate of ₦500+. We are our own problem.

Bank don't withhold dollars. Have u ever go to bank to collect western union and the told u no dollar? Or have u requested for PTA and the bank told u no dollar. I think this the best decision CBN has made so far. They can control and checkmate the bank not not those BDC

Moferere:
I agreed with Mailafia.
1. Being a former CBN staff, he understands the game;
2. From personal experience, I can't trust DMBs. It will interest you to know that DMBs hoard mints and resale to their own people

He's right, criminal bank staff will arrange dollars for BDC mallams to make quick bucks too.

Dollar will get N800... mark it !!!

In a corrupt country like Nigeria there is no fucking way this CBN policy will work. Are they all dumb in that CBN. Whether they sell it to BDC or banks, it is still same thing. Those items and services you think you will restrict from accessing fx are the one ready to pay top margins to get the dollar and you think there is a way you will restrict any institution or person from finding the back door to sell with top margin in a fantastically corrupt country like Nigeria. CBN should just hands down and allow market forces determine the exchange rate while other regulatory agencies step up their efforts in checkmating importation of banned goids

This is FALSE.

Banks are the most organized institutions we have in Nigeria today. That's simply because of stringent regulations. What we need is laws to get them to do the needful.

If this government decides to shut down most BDC, lots of northerners will become jobless because they apparently control that space.

I have never gone to my bank to withdraw funds and I was told they don't have money. Sometimes, when their USD gets exhausted, they refer you to the next branch.

owagbeba:


[b]This is always what I have thought to be a good solution to this dollar issue.

Let the DMBs sell e-dollars for FCY remittance. and for BTA they can issue a travelers cheque or visa/master card with higher daily withdrawal limit. This way nobody needs cash dollars.

For those wanting dollar to pay school fee in Nigerian school, same e-dollar bought at counter and transferred to the schools dormicilliary account.

Why can’t we just find a simple easy way for those dollar issue. This cbn’s back and forth with BDC is just creating problems for the economy. Dollar is now 525... expect another uptick in the price of goods, and eventually price of service; meanwhile salary for the employed remains the same, creating need for the employed to find a “short-cut” means to make up for the deficiencies in their personal finance. Of course, expect more corruption! More agbero harassing truckers and commercial buses, more cases of police extortion, more bureaucracy at government office, and many more.[/b]

.


CBN representative on Nairaland, I hope you're seeing this?



.

Rogues everywhere

Directionless government

.what he is saying is the real truth