Aduragbemi Omiyale
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has threatened to sanction and possibly withdraw the authorised dealership licences of banks and International Money Transfer Operators (IMTOs) still paying remittances in Naira.
In order to encourage the Nigerians living abroad to send money home, which will, in turn, improve the supply of foreign currencies in the nation’s foreign exchange (FX) market, the CBN directed commercial banks and IMTOs to pay remittances to beneficiaries in Dollars or currencies of the senders’ country.
The apex bank also introduced a reward system for diaspora remittance, which is called Naira4Dollar. Through this initiative, banks pay N5 for every $1 received through diaspora remittances in Nigeria.
However, a shortage in the supply of forex in Nigeria has made it difficult for Nigerians to receive their FX funds in Dollars. This may have forced some banks and IMTOs to convert remittances to Naira.
But the central bank has kicked against this, emphasising that remittances must be paid in US Dollars, warning that any bank caught contravening this directive would be severely punished.
In a circular signed by the Director for Trade and Exchange Department at the CBN, Mr SO Nnaji, the apex bank said it would not entertain any excuse for not paying remittances to beneficiaries in Dollars.
“The attention of the Central Bank of Nigeria 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 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,” the notice said.
“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 International Money Transfer Operators 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to be aiding/collaborating with IMTOs in terminating remittances in Naira will have their authorised dealership licence withdrawn,” the disclosure declared.
