Business a.m.
The Central Bank of Nigeria (CBN) has mandated Deposit Money Banks (DMBs) and International Money Transfer Operators (IMTOS) to implement a crucial change in their diaspora remittance processes. Effective immediately, all remittances sent by Nigerians living abroad must be paid out in Naira, with the corresponding foreign currency inflows being matched, the apex bank directed.
The directive to pay all diaspora remittances in Naira was announced in a circular dated June 24, 2024, signed by W. J. Him, acting director of the Trade & Exchange Department of the CBN, and addressed to all DMBs and IMTOS.
The CBN explained that the new directive is part of its ongoing efforts to guarantee the efficient functioning of the nation’s financial systems, ensuring smoother foreign exchange markets and encouraging higher levels of remittance flows through official channels.
To ensure the seamless implementation of its new policy on diaspora remittances, the CBN declared that eligible IMTOs will now have direct access to the CBN window or the option to execute transactions through their Authorised Dealer Banks (ADBs) for the sale of foreign exchange.
To guarantee that the new diaspora remittance policy is effectively implemented, the CBN has set out a number of key measures aimed at streamlining the process. Among these measures, eligible International Money Transfer Operators will be granted the option of same-day settlement for all transactions confirmed and executed before 12 noon on a trading day.
The CBN circular, while outlining the compliance regime, also specified that the pricing for transactions executed with the apex bank will be based on prevailing Nigerian Autonomous Foreign Exchange Market (NAFEM) rates, as referenced by an observable and acceptable market benchmark. This move, according to the circular, is in line with the existing arrangement for authorised dealers with foreign portfolio investments participating in the primary market securities auctions.
In addition to these measures, the apex bank stated that all participants in the foreign exchange market are required to submit regulatory returns on a daily basis. These returns must contain detailed information on the sources of funds, enabling the CBN to monitor and regulate the market effectively. Also, International Money Transfer Operators interested in participating in the new diaspora remittance policy are required to confirm their partner banks and communicate their standard settlement instructions to facilitate the smooth implementation of the policy.
