CBN Considers Withdrawing Forex License of Banks Over Diaspora Remittances
- The Central bank of Nigeria is dissatisfied with how commercial banks and international money transfer operators handle diaspora remittances.
- The CBN is particularly upset that license operators decided to pay Nigerians who received the money in USD in Naira.
- In Nigeria, there are 47 licensed International Money Transfer Operators in charge of diaspora remittances.
The Central Bank of Nigeria, CBN, has threatened to revoke banks' foreign exchange dealership licenses if they work with International Money Transfer Operators, IMTOs, in violation of its rule that recipients of diaspora remittances be paid in their preferred currency.
CBN gave the warning in a circular signed by the Director, of the Trade and Exchange Department, Ozoemena Nnaji, and published on Monday.
In a bid to boost diaspora remittances, especially through the banking system, the CBN, in November 2020 circular to banks, had directed that beneficiaries of such remittances should be paid in dollars through the designated banks of their choice.
Source: Getty Images
The Vanguard reports that the apex bank noted that some IMTOs engage in illegal activities through banks in violation of this directive, by paying diaspora remittances in Naira
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The circular reads:
“The attention of the CBN has been drawn to the increasing illegal activities by Money Transfer Operators in Nigeria, through banks, by terminating payments in Naira contrary to extant regulations.
“This unwholesome practice has some banks partnering with unlicensed international money transfer operators who disguise their transactions and terminate the same via local inter-bank transfers.
“Henceforth, any bank found to be aiding and abetting any IMTO or unlicensed operator in this activity would be appropriately sanctioned.
“We also wish to remind all banks that it is their responsibility to not only Know their Customers (KYC requirements) but also Know their customers’ business (KYCB. requirements).
“For the avoidance of doubt, all banks and IMTOs are to pay out proceeds of diaspora remittance only in US Dollars and comply with the guidelines on International Money Transfer Operations published by the Bank.
“Any bank found to be aiding/collaborating with IMTOs in terminating remittances in naira will have their authorised dealership licence withdrawn.”
Abuse the naira, go to jail': CBN warns Nigerians
Meanwhile, the Central Bank of Nigeria has sent a note of warning to Nigerians on the abuse of the naira.
The new naira notes will be legal tender with the old notes till Tuesday, January 31, 2023
The new notes are in the denomination of N1,000, N500, and N200 and CBN expects Nigerians to respect the new notes
Source: Legit.ng
