By Adedapo Adesanya
Banks have been given the freedom to trade with the foreign exchange deposits in their vaults, according to the new guidelines issued by the Central Bank of Nigeria (CBN).
The regulations released by the CBN on Tuesday provided the modalities for the participation of commercial, merchant, and non-interest banks in the scheme.
The notice of the scheme guidelines, which became effective Wednesday (yesterday), was jointly signed by the acting Director of the Financial Policy and Regulation Department, Mr John Onojah, and the acting Director of the Banking Supervision Department, Mr Adetona Adedeji.
The document tagged Guidelines On Implementation Of The Foreign Currency Disclosure, Deposit, Repatriation, And Investment Scheme, 2024 authorised banks to trade with the forex made available by scheme participants.
“Commercial, merchant, and non-interest banks (CMNIBs) may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed.
“Interest payment by CMNIBs on the balance in the designated domiciliary account shall be in line with relevant provisions of the Guide to Charges by Banks and Other Financial Institutions in Nigeria,” a part of the guidelines read.
The federal government recently announced a nine-month programme beginning on October 31, 2024, that allows individuals to deposit Dollar bills held outside the formal banking system without scrutiny.
The apex bank in its latest guidelines, also stated that banks are required to demand details such as the Bank Verification Number (BVN) and National Identification Number (NIN) for natural persons and directors of incorporated entities) or a Tax Identification Number (TIN) for legal persons).
Other requirements include the amount of the ITFC sought to be deposited; details of the applicant’s designated domiciliary account into which the ITFC shall be deposited and other information as the bank may require from time to time.
CBN also demanded that banks must not contravene anti-money laundering /Combating the Financing of Terrorism/Countering Proliferation Financing laws and regulations.
The regulator said the banks must conduct customer due diligence, “including identifying the beneficial owner of the funds on applicants who are transferring, repatriating, or depositing funds under the programme, based on an assessment of the applicable risks;
“Identifying the beneficial owner of the account into which the funds are being transferred, repatriated, or deposited under the Scheme;
“Ensuring deposits under the Scheme by way of wire transfers are compliant with extant requirements regarding such transactions;
“Subjecting funds repatriated from countries that do not adequately apply the FATF Recommendations to enhanced due diligence and scrutiny.”
