Nigeria: CBN Disqualifies Six Banks in Latest Retail Dutch Auction

The Central Bank of Nigeria (CBN) has disqualified six prominent banks from participating in its most recent Retail Dutch Auction System (rDAS) held on August 6.

According to Omolara Duke, Director of the Financial Markets Department at the CBN, the disqualified bids, totaling $279 million, were rejected due to compliance issues such as late submissions and invalid forms.

The auction, which aimed to provide foreign exchange (FX) to end users through authorized dealer banks, initially attracted bids amounting to $1.19 billion. However, after a thorough evaluation, only $815.36 million worth of bids met the CBN’s compliance criteria and were approved.

“The call for bids was in the Naira/US Dollar (N/US$) currency pair for unmet FX demand supported by verifiable Forms A and M only. All bids were to be password protected and submitted through the dedicated email address provided by the CBN between 9:00 AM and 3:00 PM. Bids received after the 3:00 PM deadline were disqualified. Passwords for the bids were sent after the auction closed. The total bids received were valued at $1,191,071,651.59,” the statement noted.

The Banks

The CBN reported that the majority of disqualified bids resulted from late submissions. Notable banks such as United Bank for Africa (UBA), First City Monument Bank (FCMB), Stanbic Bank, and Wema Bank were penalized for missing the 3:00 PM submission deadline. Additionally, Suntrust and Rand were disqualified for not adhering to the required bid format.

The CBN underscored the importance of strict adherence to submission guidelines, emphasizing that all bids must be submitted within the specified timeframe and comply with the approved template to be considered valid.

The auction is part of the CBN’s ongoing efforts to manage liquidity in the FX market, enhance exchange rate stability, and improve price discovery amid rising demand. The central bank announced that successful bids, ranging between N1,495/US$ and N1,650/US$, would be settled on August 8. Accounts not funded by this date will forfeit their FX allocation.

Successful Bids

Zenith Bank emerged as the leading recipient, securing over $267 million from a total of $876.26 million allocated to 26 approved bids. Union Bank followed, securing $82 million, while Guaranty Trust Bank (GTB) also performed well, receiving over $29 million.

The CBN continues to monitor and manage the auction process to ensure transparency and compliance with its regulatory standards.