CBN introduces special bills, further amends remittances rules

As part of efforts to deepen the financial markets and avail the monetary authority with an additional liquidity management tool, Central Bank of Nigeria (CBN), on Wednesday, announced the introduction of Special Bills.

Also, on Wednesday, the apex bank further amended its new rules, which allows diaspora remittances to either collect their cash in naira or lodge it as a hard currency into their domiciliary accounts.

In a circular BSD/DlR/GEN/LAB/131086, signed by Director of Banking Supervision, Bello Hassan, CBN gave features of the CBN Special Bills to include a tenor of 90 days; zero-coupon, applicable yield at issuance will be determined by the CBN.

It added that the instrument will be tradable amongst banks, retail and institutional investors; while the instrument shall not be accepted for repurchase agreement transactions with the CBN and shall not be discountable at the CBN window; and that the instrument will qualify as liquid assets in the computation of liquidity ratio for deposit money banks.

Hassan explains that CBN will continue to ensure optimal regulation of systemic liquidity and promote efficient financial markets in support of economic recovery and sustained growth.

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In the circular amending procedures for receipt of diaspora remittances addressed to authorised dealers and the general public, the apex bank warned international money transfer operators (IMTOs) to ensure that all funds in favour of beneficiaries/recipients in Nigeria be deposited into the Agent Banks’ correspondent account.

In the circular titled RE: AMENDMENT TO PROCEDURES FOR RECEIPT OF DIASPORA REMITTANCES made further to the Circular Ref. No. TED/FEM/FPC/GEN/OI/OII of November 30, 2020, director of trade and exchange, Samuel Nnaji, reiterated and clarified also disclosed that all agent banks (Deposit Money Banks) in Nigeria will be responsible for final payment to beneficiaries/recipients either in foreign currency cash (USD) or into the beneficiaries’/recipients’ domiciliary account in Nigeria.

In addition, CBN said the mode of payment either in cash or transfer is at the sole discretion of the beneficiaries/recipients.

CBN had, on Monday, first amended the procedures for receipt of diaspora remittances as part of its efforts to boost the foreign exchange market.

Part of the circular read, “These changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of diaspora remittances in Nigeria.

“In addition, these changes would help finance streams of investment opportunities for Nigerians in the diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows.

“All authorised dealers and the general public should note that beneficiaries shall have unfettered access and utilisation to such foreign currency proceeds, either in cash and/or in their domiciliary accounts, in line with our circular TED/FEM/FPC/GEN/01/010.”

NIGERIAN TRIBUNE