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Market Digest Nigeria

Finance

CBN Directs Banks to Close IMTOs’ Naira Accounts

The CBN has directed all deposit money banks (DMBs) to close all Naira accounts for International Money Transfer Operators (IMTOs).

This, it stated was to ensure that all diaspora remittances are received by beneficiaries in foreign currency only (cash and/or transfers to domiciliary accounts of recipients).

The CBN stated this in a letter addressed to all deposit money banks, payment service providers (PSPs) and IMTOs, a copy of which was posted on its website.

The circular was titled: “Receipt of Diaspora Remittances: Additional Operational Guidelines – 2”

It stated: “Further to the circular to IMTOs and PSPs on “Receipt of Diaspora Remittances: Additional Operational Guidelines”, referenced PSM/DIR/CON/CWO/16/119 and dated December 16, 2020, the Central Bank of Nigeria further directs as follows:

“DMBs are to close all naira accounts for IMTOs. This is to ensure that all diaspora remittances are received by beneficiaries in foreign currency only (cash and/or transfers to domiciliary accounts of recipients)

“DMBs are permitted to open new OPEX accounts for the purposes of the IMTO operations, such as salary payments and other operating expenses excluding diaspora remittance receipts.

“DMBs must ensure that proper audit of IMTO accounts is done to forestall further use of Naira accounts for diaspora remittance purposes. This takes effect immediately. Please ensure strict compliance and be guided accordingly.”

The CBN recently unveiled a new policy that grants unfettered access to forex from Diaspora and other money transfer remittances.

The policy allows beneficiaries of Diaspora remittances through IMTOs to henceforth receive such inflows in the original foreign currency through the designated bank of their choice.

It had explained that the new regulation was part of efforts to liberalise, simplify and improve the receipt and administration of Diaspora remittances into Nigeria.

With the new policy, recipients of remittances may have the option of receiving such funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.

“These changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of Diaspora remittances into Nigeria,” the central bank had stated.

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