Nigerian banks, International money transfers ordered to pay all diaspora remittances in Naira

 International Money Transfer Operators and banks in the country have halted the payment of dollars to their customers.

Some banks on Friday informed their customers that they would no longer be able to receive dollars from family and friends in the diaspora.

This followed the issuance of revised guidelines for International Money Transfer Operators by the Central Bank of Nigeria on January 31.

Ecobank Nigeria, one of the banks that have started to comply with CBN directive, in a notice to customers on its international money transfer operations, said, “We would like to bring to your attention recent regulatory changes affecting international money transfers into Nigeria through Western Union, MoneyGram, Rapidtransfer, Ria, and other CBN approved IMTOS.

“The circular issued by the Central Bank of Nigeria dated January 31, 2024, stipulates that all in-bound money transfers to Nigeria (via the above mentioned IMTOS) will be paid only in naira through a bank account or in cash at the prevailing rate in the Nigerian Foreign Exchange Market.

“Furthermore, transfers exceeding the naira equivalent of $200 must be credited to the recipient’s bank account. Naira cash payment equivalent for amounts below $200 will require an acceptable means of identification. The acceptable means of identification is any of the following: international passport, Driver’s licence, National identity card and INEC Permanent Voters Card.”

In the revised guidelines, the apex bank restricted IMTOs from outbound transfers and stated that beneficiaries of all inbound money transfers to Nigeria would be paid in naira, either in cash or through a bank account.

It added that funds that are more than $200 would be paid through a bank account.

 IMTOs are companies approved by the CBN to facilitate the transfer of funds from individuals or entities residing abroad to recipients in Nigeria and the payment of a corresponding sum to a beneficiary through a clearing network to which the IMTO belongs.

 The CBN, in its revised guidelines, said, “All inbound money transfers to Nigeria shall be paid to beneficiaries in naira through a bank account, or cash.

 “Proceeds of IMTO more than the equivalent of $200 shall be paid through an account. Cash payments shall be made upon the provision of a satisfactory/acceptable means of identification. Where the beneficiary does not have an account with the IMTO agent bank, the agent bank shall credit the beneficiary account in another bank.”

Although the guidelines said that banks and fintech were banned from international money transfer services, the banks could act as agents and most of them are already.

“All banks are prohibited from operating International Money Transfer Services bit can act as agents. Also, financial technology companies are not allowed to obtain approval for IMTO,” part of the revised guidelines said.

The apex bank also asked IMTOs to quote exchange rates for naira payout to beneficiaries based on the prevailing market rates at the nation’s official foreign exchange market.

In a bid to implement the CBN’s directive, one of the approved IMTOs, World Remit, has updated its app for Nigeria with the following instructions: “WorldRemit Nigeria News! We can no longer support transfers in USD; only in naira.

“If you’re about to send money to Nigeria, this is important. The Central Bank of Nigeria has directed that it’s no longer possible for any money transfers to be paid out in USD in Nigeria. So, of course, this includes WorldRemit money transfers.

“But please don’t worry. You can still enjoy the same quick, safe and affordable World Remit service to Nigeria by sending money in naira instead,” it stated.

Another operator, Sebdwave, said, “In compliance with a recent directive from the Central Bank of Nigeria, we regret to inform you that Sendwave, along with all money transfer operators, is no longer able to support USD transfers to Nigeria. We’d encourage you to switch to sending Naira transfers instead.”

Commenting on the CBN move, the President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, said that the CBN move would discourage the dollarisation of the economy.

He said, “It discourages the already precarious dollarisation of the economy. You know the CBN did not even stop at that. The EFCC has started inviting organisations and institutions that are issuing invoices in USD. We need to discourage currency substitution. If we continue to give the beneficiaries the dollars, we are reinforcing the dollarisation of the economy and we are looking for the dollars.”

He added that diaspora remittances had often been channelled towards meeting personal needs rather than harnessed for development purposes in the country.

“The central bank is trying to secure all streams of income that are coming into the country. If you look at the directive to the NNPCL to remit to the CBN. Don’t forget also that the central bank has made some announcements on how to start injecting liquidity into the economy, especially the retail end of the market.

“All put together, we have started seeing even the naira regaining momentum as it closed at 1,480/ dollar today (Thursday) from N1,505 to the dollar yesterday (Wednesday),” Gwadebe stated.

A financial and economic expert, Rotimi Fakoyejo, called for improved monitoring on the part of the apex bank to ensure the effectiveness of the directive.

“There must be deep oversight monitoring from the CBN on the banks over what comes in and what goes out. The reason is that there is absolutely no reason for dollars or pounds sterling to be spent in Nigeria.

 “You should not even see it except when you are travelling. Most times, the banks are the ones who connect a recipient of international money transfer with the person who will change the dollar and that is why the disparity between the official and black market today is widening. If there is no supply to the black market, then definitely, we will have a single rate for the dollar,” he said.

The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, said that the move of the CBN would have minimal effect on the liquidity in the forex market.

He said, “What they want to do is use that to increase liquidity in the official window. But as long as there is no disparity between the official and parallel market rates, people who are remitting money will not be bothered.

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  1. As this been passed to law, CBN should also implement a law that will bound Nigerian not to send money out to any foreign country with hard currency, our leaders inclusive. This will enable us to patronize our local production and bee more of production country not consumption One.


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