Post by Trade Forum on Dec 27, 2020 14:08:38 GMT 1
The Central Bank of Nigeria (CBN) Orders Closure of International Money Transfer Operators’ Naira Accounts
The Central Bank of Nigeria (CBN) has directed the Deposit Money Banks (DMBs) in the country to close all naira accounts of International Money Transfer Operators (IMTO) in the country without delay.
According to the Central Bank of Nigeria (CBN), a Deposit Money Bank ((DMB) is a financial Institution licensed by the regulatory authority to mobilize deposits from the surplus unit and channel the funds through loans to the deficit unit and perform other financial services. Examples of Deposit Money Banks in Nigeria are: Access bank plc, First Bank of Nigeria Plc and Guaranty bank Plc.
While an International Money Transfer operator (IMTO) is a financial company (but not usually a bank) engaged in cross-border transfer of funds using either their internal system or access to another cross-border banking network. Examples of International Money transfer Operators are: AFTAB currency exchange ltd UK, AWS Malta ltd, Malta, eTransact ltd, Nigeria, and First Apple Inc, USA. There are currently 58 fully registered International Money Transfer Operators.
United States of America (USA) sends the most money in the world; India receives the most money, while China has the most even balance sending and receiving money internationally.
This information was disclosed in a circular by the apex bank titled” Receipt of Diaspora remittances: Additional Operational Guidelines 2” addressed to all Deposit Money Banks, Payment Services Providers and International Money Transfer Operators IMTOs).
The Director of Banking Supervision department and Director of Payment Systems Management department signed the circular.
The following is the content of the circular: “Deposit Money Banks (DMBs) are to close all naira accounts of International Money Transfer Operators (IMTOs). This is to ensure that diaspora remittances are received by beneficiaries in foreign currency only (cash and/or transfer to domiciliary accounts).
Deposit Money Banks (DMBs) are permitted to open operational expenses accounts for IMTOs operations, such as salary payments, and other operational expenses, excluding diaspora remittance receipts.
Deposit Money Banks (DMBs) must ensure that proper audit of IMTOs accounts is done to forestall further use of naira accounts for diaspora remittances purposes.
In an earlier circular, the Central Bank of Nigeria (CBN) warned International Money Transfer Operators (IMTOs) against paying recipients of diaspora remittances in local currency. The CBN warned that violators could lose their operational licences if they fail to comply with the guidelines on remittances from the diaspora.
It is at the sole discretion of the recipients to either choose foreign currency cash or have the proceeds deposited into their domiciliary accounts in Nigeria.
The circular also stated that ‘Agent banks (Deposit Money Banks) in Nigeria will be responsible for all payments to beneficiaries/recipients either in foreign currency cash (USD) or into their domiciliary accounts.
These policies were announced closely after the Central Bank of Nigeria (CBN) introduced special bills to support the nation’s economic recovery and to deepen the financial markets.
The CBN explained that the new regulation was made to liberalize, simplify and improve the receipt and administration of Diaspora remittances into Nigeria. The apex bank said that these changes have become necessary to deepen the foreign exchange (Forex) market, provide increased liquidity and create more transparency in the administration of diaspora remittances into the country.
This is a fantastic step taken by the Central Bank of Nigeria’s authorities that will surely bring in positive effects in the country’s financial sector.
When Nigerians and other nationals in diaspora know that when they remit money to their relations in Nigeria, they will get their money in foreign currency, inflow of remittances will improve greatly.
The country needs such radical policies in order to increase transparency in the management of foreign exchange in Nigeria. Foreign exchange is highly needed in the country so that the value of the local currency, the Naira will improve.
The Central Bank of Nigeria (CBN) has directed the Deposit Money Banks (DMBs) in the country to close all naira accounts of International Money Transfer Operators (IMTO) in the country without delay.
According to the Central Bank of Nigeria (CBN), a Deposit Money Bank ((DMB) is a financial Institution licensed by the regulatory authority to mobilize deposits from the surplus unit and channel the funds through loans to the deficit unit and perform other financial services. Examples of Deposit Money Banks in Nigeria are: Access bank plc, First Bank of Nigeria Plc and Guaranty bank Plc.
While an International Money Transfer operator (IMTO) is a financial company (but not usually a bank) engaged in cross-border transfer of funds using either their internal system or access to another cross-border banking network. Examples of International Money transfer Operators are: AFTAB currency exchange ltd UK, AWS Malta ltd, Malta, eTransact ltd, Nigeria, and First Apple Inc, USA. There are currently 58 fully registered International Money Transfer Operators.
United States of America (USA) sends the most money in the world; India receives the most money, while China has the most even balance sending and receiving money internationally.
This information was disclosed in a circular by the apex bank titled” Receipt of Diaspora remittances: Additional Operational Guidelines 2” addressed to all Deposit Money Banks, Payment Services Providers and International Money Transfer Operators IMTOs).
The Director of Banking Supervision department and Director of Payment Systems Management department signed the circular.
The following is the content of the circular: “Deposit Money Banks (DMBs) are to close all naira accounts of International Money Transfer Operators (IMTOs). This is to ensure that diaspora remittances are received by beneficiaries in foreign currency only (cash and/or transfer to domiciliary accounts).
Deposit Money Banks (DMBs) are permitted to open operational expenses accounts for IMTOs operations, such as salary payments, and other operational expenses, excluding diaspora remittance receipts.
Deposit Money Banks (DMBs) must ensure that proper audit of IMTOs accounts is done to forestall further use of naira accounts for diaspora remittances purposes.
In an earlier circular, the Central Bank of Nigeria (CBN) warned International Money Transfer Operators (IMTOs) against paying recipients of diaspora remittances in local currency. The CBN warned that violators could lose their operational licences if they fail to comply with the guidelines on remittances from the diaspora.
It is at the sole discretion of the recipients to either choose foreign currency cash or have the proceeds deposited into their domiciliary accounts in Nigeria.
The circular also stated that ‘Agent banks (Deposit Money Banks) in Nigeria will be responsible for all payments to beneficiaries/recipients either in foreign currency cash (USD) or into their domiciliary accounts.
These policies were announced closely after the Central Bank of Nigeria (CBN) introduced special bills to support the nation’s economic recovery and to deepen the financial markets.
The CBN explained that the new regulation was made to liberalize, simplify and improve the receipt and administration of Diaspora remittances into Nigeria. The apex bank said that these changes have become necessary to deepen the foreign exchange (Forex) market, provide increased liquidity and create more transparency in the administration of diaspora remittances into the country.
This is a fantastic step taken by the Central Bank of Nigeria’s authorities that will surely bring in positive effects in the country’s financial sector.
When Nigerians and other nationals in diaspora know that when they remit money to their relations in Nigeria, they will get their money in foreign currency, inflow of remittances will improve greatly.
The country needs such radical policies in order to increase transparency in the management of foreign exchange in Nigeria. Foreign exchange is highly needed in the country so that the value of the local currency, the Naira will improve.
