If You Have An ACCOUNT With Zenith, Access, UBA Bank, Read This Immediately As CBN Drops Unexpected Order
The Central Bank of Nigeria (CBN) has directed commercial, merchant, and non- interest banks (CMNIBs) to open domiciliary accounts for participants in a new foreign currency regulation scheme, outlined in its 2024 guidelines for foreign currency disclosure, deposit, repatriation, and investment.
The updated guidelines were issued by the Minister of Finance, Wale Edun, to clarify regulatory expectations for financial institutions. According to the CBN, the guidelines specify how these institutions should engage in the Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme, establishing a framework for handling international currency transactions.
Under these guidelines, when a financial institution confirms that a participant meets the requirements specified in Section 3. 1, it must receive International Transferable Funds (ITFCs) into the designated domiciliary account. The bank is also required to report these transactions to the CBN in line with the approved format.
The guidelines also address the handling of withdrawals from these accounts and the termination of investments. Banks are instructed not to place restrictions on withdrawals, the termination of investments, or on the allocation of ITFCs for eligible investment instruments or sectors. This approach is intended to provide participants with more flexibility and autonomy in managing their investments within the framework of the scheme.
In addition, the regulations allow participants to convert their ITFCs, either partially or fully, into naira at the prevailing exchange rate, as long as these conversions are transparently reported in the bank’ s foreign exchange returns. This provision enables participants to maintain liquidity in naira while remaining compliant with foreign exchange policies.
Further, the guidelines permit CMNIBs to trade with ITFC deposits not immediately invested by participants, ensuring the funds are available upon request. Banks are instructed to pay interest on uninvested funds in these accounts, in accordance with the Guide to Charges by Banks and Other Financial Institutions in Nigeria, ensuring participants earn returns on unused deposits.
In an earlier report by Legit. ng, CBN outlined additional regulations for Deposit Money Banks (DMBs) concerning domiciliary accounts. Deposit Money Banks— commercial banks that accept deposits and offer other banking services nationwide— were previously limited to a maximum withdrawal of $10, 000 per month from domiciliary accounts. However, the new regulations allow customers to withdraw up to $10, 000 daily, a significant shift aimed at enhancing transaction flexibility.
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CBN anticipates that by easing these restrictions, more Nigerians will be encouraged to use official channels for forex transactions. This shift aims to increase transparency and liquidity in Nigeria’ s foreign exchange market, thereby bolstering the overall stability and accessibility of foreign currency within the financial system.
