CBN Bans Banks, Fintechs from International Money Transfer

The Central Bank of Nigeria has banned banks and financial technology companies (fintechs) from international money transfer services but stated that they can act as agents.

In a statement made available on its website which was signed by Hassan Mahmud, the Director of Trade and Exchange Department, and released on the 31st of January, 2024, it banned individuals from managing, shareholding, or being officers of a bank.

“All banks are prohibited from operating International Money Transfer services but can act as agents.

“Also, Financial Technology Companies are not allowed to obtain approval for IMTO.

“The provisions of BOFIA 2020 on the prohibition of employment of certain persons in banks shall also apply to IMTOS.”

The CBN further increased the application fee for IMTO license from N500,000 in 2014 to N10 million in the revised guidelines and advised IMTO’s intending to operate in Nigeria to submit their application with the following document to the Director, Trade and Exchange Department.

“A non-refundable application fee of N10,000,000.00 (Ten Million Naira only) or such other amount that the Bank may specify from time to time; payable to the CBN through electronic transfer or bank draft.

“Approval to operate in other jurisdictions or agency agreements (for all IMTOs).

“Evidence of tax clearance and incorporation documents in Nigeria (for indigenous IMTOS) to include Memorandum and Articles of Association (Certified True Copy), of which the primary object clause shall indicate the provision of money transfer services.”

According to Sahara Reporters, there is an annual renewal fee of N10 million naira which is paid to the CBN and a renewal of IMTO approval shall be done within the first quarter of every year.

Where an IMTO fails to avail its agent bank of a copy of the CBN renewal of its IMTO approval for that year within the first quarter of the year, the bank should cease any further transaction with the IMTO.

Also, the apex bank in another circular with Ref: TED/FEM/FPC/GEN/001/003, dated Jan. 31 and addressed to All Authorised Dealers, IMTOS, and the general public, titled: “Removal Of Allowable Limit Of Exchange Rate Quoted By The International Money Transfer Operators,” directed International Money Transfer Operators to quote exchange rates for naira payout to beneficiaries based on the prevailing market rates at the Nigerian Foreign Exchange Market on a willing seller, willing buyer basis.

Also, the apex bank issued another circular with Ref: TED/FEM/FPC/GEN/001/003 which was released on Thursday and addressed to All Authorised Dealers, IMTOS, and the general public, titled: “Removal Of Allowable Limit Of Exchange Rate Quoted By The International Money Transfer Operators.”

It directed International Money Transfer Operators to quote exchange rates for naira payout to beneficiaries based on the prevailing market rates at the Nigerian Foreign Exchange Market on a willing seller, willing buyer basis.

Signed by Director, Trade & Exchange Department, Dr Hassan Mahmud, the document reads:

“The circular with reference TED/FEM/PUB/FPC/001/009 dated September 13, 2023 states that International Money Transfer Operators are required to quote rates within an allowable limit of 2.5% to +2.5% around the previous day’s closing rate of the Nigerian Foreign Exchange Market.

“However, in line with the CBN’s commitment to liberalize the Nigerian Foreign Exchange Market, IMTOs are hereby allowed to quote exchange rates for naira payout to beneficiaries based on the prevailing market rates at the Nigerian Foreign Exchange Market on a willing seller, willing buyer basis.

“For the avoidance of doubt, by this circular, the cap on the allowable limit of -25% to +2.5% around the previous day’s closing rate of the Nigerian Foreign Exchange Market is hereby removed.

“Therefore, this circular supersedes the circular with reference TED/FEM/PUB/FPC/001/009 dated September 13, 2023.”

“Authorized Dealers, International Money Transfer Operators, and the General Public are hereby informed to note and comply accordingly,” it also says.

Source:  SaharaReporters