The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) to immediately close all the naira accounts of International Money Transfer Operators (IMTOs), such as Western Union, licensed to operate in the country.
The apex bank, which stated this in a circular posted on its website Friday, said the directive is aimed at ensuring that: “All diaspora remittances are received by beneficiaries in foreign currency only (cash and/or transfers to domiciliary accounts of recipients).”
It, however, said that DMBs are permitted to open new: “Opex accounts for the purposes of the IMTO operations, such as salary payments and other operating expenses excluding diaspora remittance receipts.”
In addition, the regulator ordered DMBs to ensure that proper audit of IMTO accounts is carried out to prevent: “Further use of naira accounts for diaspora remittance purposes.”
The latest CBN pronouncement on diaspora remittances follows additional operational guidelines on the receipt of diaspora remittances that the apex bank issued on Wednesday, which it said, were aimed at ensuring operators’ full compliance with earlier guidelines on the subject it released a few weeks ago.
In a circular it issued on November 30, the CBN unveiled a new policy that granted unfettered access to diaspora remittances that are sent through licensed IMTOs.
Specifically, the policy made it mandatory for beneficiaries of diaspora remittances through the IMTOs to receive such inflows in the original foreign currency through the designated bank of their choice.
The CBN has explained that it had to issue additional operational guidelines on Wednesday because while there was substantial compliance with the new diaspora remittance policy, “a few operators continue to pay remittances in local currency contrary to the regulatory directive.”
The additional operational guidelines stipulated that: “Switches and Processors should immediately cease all local currency transfers in respect of foreign remittances through IMTOs and all Mobile Money Operators(MMOs) are required to immediately disable wallets from receipt of funds from IMTOs.”
The CBN further stated that: “Payment service providers are directed to cease integrating their systems with IMTOs going forward and must prevent comingling of remittances with other legitimate transactions and all IMTOs are required to immediately disclose to beneficiaries that they exercise discretion to receive transfer in foreign currency cash or directly into their domiciliary accounts.”
It also announced that a central reporting portal for all foreign remittances to be managed by the Nigeria Interbank Settlement System (NIBSS) was being developed to improve visibility of foreign remittance flows.
On Wednesday, the CBN had cautioned members of the public against patronizing Azimo and TransferWise, stressing that it had not licensed the two companies to operate as IMTOs.
In a statement, signed by the Ag. Director, Corporate Communications at the apex bank, Mr. Osita Nwanisobi, the CBN warned that members of the public patronizing the two firms are doing so at their own risk.
According to the statement: “The attention of the Central Bank of Nigeria (CBN) has been drawn to the activities of Messrs. Azimo and Messrs. Transfer Wise, both of which are purportedly transacting business, albeit unauthorised, as International Money Transfer Operators (IMTOs).
“The Bank wishes to notify the general public that neither Messrs. Azimo nor Messrs. Transfer Wise is licensed by the Central Bank of Nigeria to operate as an International Money Transfer Operator (IMTO). The Public is therefore advised to beware of the activities of Messrs. Azimo and Messrs. Transfer Wise and desist from patronizing the companies forthwith.”