IMTOs to access Naira from CBN for settlement of diaspora remittances

IN a new measure aimed at enhancing local currency liquidity for settlement of diaspora remittances, the Central Bank of Nigeria (CBN) has said that International Money Transfer Operators (IMTOs) can henceforth access the CBN window directly or through their Authorized Dealer Banks (ADBs) to execute transactions for the sale of foreign exchange in the market.

In a circular to all Deposit Money Banks and IMTOs on Monday, signed by the Acting Director, Trade and Exchange Department CBN, Dr. W. J. Kenya, the apex bank noted that this is part of its commitment to the smooth functioning of the Foreign Exchange Markets and enabling greater remittance flows through formal channels.

“The Bank has implemented measures that will enable eligible International Money Transfer Operators (IMTOs) to access NGN liquidity at the CBN window. “These measures are aimed at widening access to local currency liquidity for the settlement of diaspora remittances, “ it read in part.

To guide this process, the CBN said this circular sets the following for compliance: Same day settlement will be available for transactions executed before 12 noon on a trading date; the pricing on the CBN portal will be reflective of NAFEX traded rates observable on an acceptable market benchmark; the operation of this market segment follows the existing arrangement in place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions; regulatory returns to be submitted to the CBN by all participants on a daily basis, are mandatory and this is expected to contain all the relevant information on the sources of funds; participants in this segment are the IMTOs, Authorized Dealer Banks and CBN.

“This circular is with immediate effect, “ the Central Bank of Nigeria stated.

It should be recalled that  the CBN on January 31, issued revised guidelines for International Money Transfer Operators whereby Operators and banks in the country halted the payment of dollars to their customers.

Consequently, banks immediately informed their customers that they would no longer be able to receive dollars from family and friends in the diaspora.

The circular issued by the Central Bank of Nigeria dated January 31, 2024, stipulates that all in-bound money transfers to Nigeria (via the above-mentioned IMTOS) will be paid only in naira through a bank account or in cash at the prevailing rate in the Nigerian Foreign Exchange Market.

Furthermore, transfers exceeding the naira equivalent of $200 must be credited to the recipient’s bank account.

Naira cash payment equivalent amounts below $200 will require an acceptable means of identification. The acceptable means of identification is any of the following: international passport, Driver’s licence, National identity card and INEC Permanent Voters Card.

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