In a circular to International; Money Transfer Operators and Payment Service Providers titled; ‘Receipt of Diaspora Remittances: Additional operational guidelines’ on Wednesday, the Central Bank of Nigeria has warned operators against paying recipients of diaspora remittances in local currency.
The circular which was signed by the director, trade and exchange department, and the director, payments system management department stated that: “All licensed institutions are required to comply with the foregoing guidelines as contraventions will attract stiff regulatory sanction including revocation of licences.”
The circular further stated that, “Following the recent policy pronouncement on amendment to procedures for receipt of diaspora remittances, the CBN notes material compliances by majority of market participants as beneficiaries of remittances through IMTOs now receive foreign currency through their designated banks. However, and regrettably, a few operators continue to pay remittances in local currency contrary to regulatory directive. The CBN frowns at this practice.”
As a result of this, the CBN provided additional operational guidelines which are that “switches and processors should immediately cease all local currency transfers in respect of foreign remittances through IMTOs.”
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Due to this, the CBN provided additional operational guidelines which are that “switches and processors should immediately cease all local currency transfers in respect of foreign remittances through IMTOs.”
The CBN said a central reporting portal for all foreign remittances to be managed by the Nigerian Interbank Settlement System was currently under development to improve visibility of foreign remittance flows.
The apex bank stressed that it remained committed to promoting transparency in the administration of diaspora remittances into Nigeria and would continue to enforce policies that would stabilize and deepen the Nigerian foreign exchange market.