The Central Bank of Nigeria, CBN has disqualified six commercial banks from participating in a recent retail Dutch Auction
The apex bank auctioned a total sum of $876.26m to 26 qualified banks, who participated in the latest Retail Dutch Auction System undertaken by the apex bank.
The auction process conducted on Tuesday, August 6, 2024, aimed to enhance FX liquidity in the market, alleviate demand pressure, and support price discovery in alignment with the apex bank’s objectives.
The CBN stated this in a statement posted on its website on Wednesday which was signed by the Director, Financial Markets Department, Omolara Omofunde Duke.
Explaining the auction process, the director said a total bid valued at $1.18bn was received from 32 authorized dealers banks while bids valued at $313.69m from six banks were disqualified.
Of the disqualified bids. four banks submitted their bids after the cut-off time of 3:00 pm, while two banks did not provide bids in the template submitted.
The statement read, “A total bid valued at US$1.18bn was received from 32 Authorized Dealers Banks, of which, bids valued at US$876.26m from 26 banks qualified, while bids valued at US$313.69m from six banks were disqualified.”
Last week, the CBN unveiled plans to implement a Retail Dutch Auction System to address the mounting unmet foreign exchange demand from end users.
It said the aim was to alleviate the growing pressure in the FX market and stabilize the naira’s exchange rate.
According to Nairametrics, the disqualified banks are:
1. United Bank Of Africa UBA.
UBA, one of Nigeria’s top financial institutions, saw its $13.21 million bid disqualified due to late submission.
2. First City Monument Bank (FCMB)
FCMB which had the largest disqualified bid at $178.65 million, also missed the deadline, resulting in the invalidation of its bid.
3. Stanbic IBTC
Another major player in Nigeria’s banking sector, had its $57.86 million bid disqualified for the same reason as UBA and FCMB—late submission. This underscores the stringent compliance standards enforced by the CBN.
4. Wema Bank
Wema Bank known for its innovation, particularly with its ALAT digital banking platform, also faced disqualification for late submission, rendering its $21.94 million bid invalid.
5. SunTrust Bank.
A relatively new entrant in Nigeria’s banking industry, had its $7.38 million bid disqualified, not for late submission, but for failing to provide the necessary bid rates.
6. Rand Bank
Rand Bank was disqualified for failing to submit any bids, resulting in no amount being associated with the bank in this auction.
These disqualifications led to the exclusion of $279.04 million from the auction.
