CBN Sets New Rules, Restricts Access, GTB, Zenith, Others From International Money Transfer Services

• The CBN has continued its push to ensure the naira finds again its true value after recent weeks of free fall
• The latest move is targeted at the International Money Transfer Operators, banks and financial technology companies
• The CBN has also decided to increase the minimum operating capital requirement for local and foreign IMTOs

Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and the Economy.

The Central Bank of Nigeria (CBN) has released revised guidelines for International Money Transfer Operators (IMTOs) on international money transfer services.

In the document, the CBN stated that banks will no longer be allowed to carry out international money transfer operations.

The apex bank also noted it will not give new IMTO licences to fintech startups.

Part of the document officially released on Wednesday, January 31, 2024, reads

The document read:

“All banks are prohibited from operating International Money Transfer services but can act as agents.

“Also, Financial Technology Companies are not allowed to obtain approval for IMTO.

“The provisions of BOFIA 2020 on the prohibition of employment of certain persons in banks shall also apply to IMTOS.”

CBN had previously granted international money transfer licences to fintech companies, including Flutterwave, LemFi, PagaTech, VFD, and Interswitch.

The apex bank did not state whether the existing licences would be revoked.

More instructions to banks

The CBN also increased the application fee for IMTO licence from N500,000 in 2014 to N10 million in the revised guidelines. This is an increase of about 1,900% in about 10 years.

The document noted that any IMTO intending to operate in Nigeria shall submit its application to the Director, rade and Exchange Department with the following documents, among others:

The document added:

“A non-refundable application fee of N10,000,000.00 (Ten Million Naira only) or such other amount that the Bank may specify from time to time; payable to the CBN through electronic transfer or bank draft.

“Approval to operate in other jurisdictions or agency agreement (for all IMTOs).

“Evidence of tax clearance and incorporation documents in Nigeria (for indigenous IMTOS) to include Memorandum and Articles of Association (Certified True Copy), of which the primary object clause shall indicate provision of money transfer services.”

Minimum capital increase

Furthermore, the apex bank also established a minimum operating capital requirement for International Money Transfer Operators (IMTOs) at $1 million for foreign entities and an equivalent amount for local IMTOs.

Previously, it was N2 billion for Nigerian companies and N50 million or its equivalent for foreign companies.

FG addresses Naira the dollar exchange rate

Legit.ng earlier reported that Ben Akabueze, the director-general of the federation’s budget office, said the Naira would strengthen in value in the foreign exchange market in 2024.

Speaking in an interview with Channels TV on Tuesday, December 26, 2023, Akabueze said this would be possible as the country expects an increase in dollar supply.

He noted that the Tinubu-led government expects the reforms initiated in 2023 to start yielding results in 2024, which is why it maintains a positive stance on the exchange rate.

Source: Legit.ng