CBN Orders Banks to Close Naira Accounts of International Money Transfer Operators

Deposit Money Banks (DMBs) in the country have been ordered to close all Naira accounts operated by International Money Transfer Operators (IMTOs).

This directive was given to the commercial banks by the Central Bank of Nigeria (CBN) in a circular jointly signed by the Director of Banking Supervision and the Director of Payments System Management.

The apex bank explained that the reason for this action was to ensure that all the IMTOs make diaspora remittances to beneficiaries in foreign currency.

Recently, the central bank directed banks and IMTOs to allow recipients of offshore transfers make cash withdrawals in the currency of the origin of the funds.

Before the directive, foreign remittances were done in Naira, which the CBN felt was causing the unregulated (black) segment of the foreign exchange (forex) market to thrive.

In order to address the issue and ease the pressure on the local currency as a result of activities of speculators, the apex bank reviewed its policy on diaspora remittances.

In the circular released on Friday, the central bank said DMBs must ensure proper audit of the accounts of IMTOs to discourage them from sabotaging the new policy.

“Further to the circular to IMTOs and Payment Service Providers (PSPs) on Receipt of Diaspora Remittances: Additional Operational Guidelines referenced PSM/DIR/CON/CWO/16/119 and dated December 16, 2020, the CBN further directs that;

“DMBs are to close all Naira accounts for IMTOs. This is to ensure that all diaspora remittances are received by beneficiaries in foreign currency only (cash and/or transfers to domiciliary accounts of recipients).

“DMBs are permitted to open new operating expenses (Opex) accounts for the purposes of the IMTO operations, such as salary payments and other operating expenses excluding diaspora remittance receipts.

“DMBs must ensure that proper audit of IMTO accounts is done to forestall further use of Naira accounts for diaspora remittance purposes,” the circular, which said the directive “takes effect immediately” and asked for “strict compliance” stated.