The suspension of nine commercial banks from participating in Nigerian foreign exchange market has resulted in investors selling off their shares in panic at reduced values costing them N8 billion.
A day after the news of the CBN sanction on the banks went viral, in both the social and regular media, chief executives of the 20 banks operating the country resolved to have a crucial meeting with the authorities with the aim of pressing them to revisit the issue.
However, a broker, Mr. Tajudeen Alao, who expressed the alarm over a series of visits and telephone calls from his clients asking him to offload their investments from the system, said the share values have also came down drastically.
“From the look of things, the banking industry may be in for serious trouble unless the regulators can arrest the situation that has seen shareholders, across banks, irrespective of their clean records from the recent clamp down by the central bank dumping their investments in the banks,” he said.
For instance, shares in Diamond Bank fell by 7.32 per cent in early trade, followed by Sterling bank which was down 3.88 per cent. FCMB fell 2.5 per cent; FBN Holdings shed 1.5 per cent, while Skye Bank was down 1.54 per cent.
It will be recalled that the CBN had suspended FCMB, First Bank, United Bank for Africa (UBA), Heritage Bank, Keystone Bank, Skye Bank, Diamond Bank, Sterling Bank, and Fidelity Bank on Tuesday for withholding government dollars from the national treasury account totaling $2.13 billion belonging to NNPC and NLNG.
Though some of the mentioned banks have insisted that they had remitted all their holdings of the named government parastatals, the CBN is yet to delist them from the number, with only UBA being readmitted into the forex market by the apex bank.
Africa’s largest economy, Nigeria, is on the verge of total economic meltdown with dollars scarce hitting all sectors, with both interbank and parallel markets lacking the hard currency to sell, a situation that has been largely responsible for the naira tumbling down to about 300 per cent per dollar.
By Emma Eke…
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