Banks and IMTOs to convert diaspora remittances into Naira

Naira
Naira

The International Money Transfer Operators (IMTOS) and banks in Nigeria have put a stop to the payment of dollars to their customers.

On Friday, some banks notified their customers that they would no longer be able to receive dollars from family and friends in the diaspora.

This is coming after the Central Bank of Nigeria issued revised guidelines for International Money Transfer Operators on January 31.

In compliance with the CBN directive, Ecobank Nigeria has notified its customers about the changes in international money transfer operations. The bank stated, "We would like to inform you about the recent regulatory changes that affect international money transfers into Nigeria through Western Union, MoneyGram, Rapidtransfer, Ria, and other CBN approved IMTOS."

The statement further said, “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.

As per the bank's statement, transfers that exceed the naira equivalent of $200 must be credited to the recipient's bank account. For amounts below $200, an acceptable means of identification will be required for Naira cash payment, these include international passport, Driver’s licence, National identity card, and INEC Permanent Voters Card.

Under the revised guidelines, the apex bank has placed restrictions on IMTOs for outbound transfers and has specified that beneficiaries of all inbound money transfers to Nigeria will receive payment in naira, either in cash or through a bank account.

According to the statement, any funds over $200 will be paid through a bank account.

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

Despite the guidelines stating that banks and fintech were not allowed to offer international money transfer services, the banks have the option to act as agents, and a majority of them are already doing so.

“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,” part of the revised guidelines stated.

IMTOs were also instructed by the apex bank to quote exchange rates for naira payout to beneficiaries, taking into account the prevailing market rates at the nation's official foreign exchange market.

It must also be noted that one of the approved IMTOs, World Remit, has updated its app for Nigeria with the following instructions in a bid to implement the CBN's directive: "WorldRemit Nigeria News!" saying, "we can no longer support transfers in USD; only in naira".

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