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As per the updated guidelines for International Money Transfer Operations (IMTOs) released by the Central Bank of Nigeria, all banks and fintech in Nigeria are banned from providing international money transfer services but can act as agents.
The recent guidelines aim to provide direction to IMTOs in compliance with the regulatory framework established by the CBN. While the previous guidelines in 2014 only applied to deposit money banks, the new rules now include fintechs. The new circular prohibited from operating International Money Transfer services but can act as agents. Also, Financial Technology Companies are not allowed to obtain approval for IMTO.
To get final approval, any IMTO wishing to operate in Nigeria must submit its application to the Director of the Trade and Exchange Department. Additionally, the IMTO must submit approval to operate in other jurisdictions or agency agreements, evidence of tax clearance, and incorporation documents in Nigeria.
The CBN also increased the application fee for the IMTO license from the N500,000 fee set in 2014 to N10 million. An annual renewal fee of N10 million Naira, or any amount that the apex bank may specify from time to time is required for the IMTO license. According to the circular, a minimum share capital of USD 1 million for foreign entities and an equivalent amount for local IMTOs is required for operation. The previous minimum operating capital requirement for International Money Transfer Operators (IMTOs) was N2 billion for Nigerian companies and N50 million or its equivalent for foreign companies. By restricting banks and fintech’s from international money transfer services, the CBN is strategically working to strengthen the currency and stabilize the forex market.
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https://trendsnafrica.com/currency-crunch-in-nigeria-banks-continue-ration-cash-across-the-counter/
According to the guidelines, applicants must comply with the CBN’s anti-money laundering, combating the financing of terrorism, and countering proliferation financing of weapons of mass destruction regulations. The Central Bank of Nigeria also issued an order instructing banks to offload their excess dollar reserves by February 1, 2024.
