CBN Implements Stricter Measures, Bans Banks and Fintechs from International Money Transfers

In a significant policy shift, the Central Bank of Nigeria (CBN) has officially prohibited both banks and financial technology companies (fintechs) from offering international money transfer services. The move accompanies a substantial 1,900% increase in the application fee for International Money Transfer Operators (IMTOs).

The ban, outlined in an official document dated Wednesday, January 31, 2024, also introduces revised guidelines for IMTOs’ operations. According to the document, banks are now barred from directly operating international money transfer services but can serve as agents in the process. Similarly, fintech companies are not permitted to seek approval as IMTOs, aligning with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, which restricts the employment of certain individuals in banks and now applies to IMTOs.

Furthermore, the CBN has mandated the exclusion of individuals from holding positions in the management, shareholdership, and offices of banks.

This development marks an expansion of the restrictions initially imposed on deposit money banks in 2014, now extended to encompass fintech entities. The revised guidelines also include a drastic increase in the application fee for IMTOs seeking licensing, rising from N500,000 in 2014 to an astounding N10 million – a surge of 1,900% over the past decade.

According to the updated guidelines, IMTOs wishing to conduct business in Nigeria must submit their applications to the Director of the Trade and Exchange Department, along with various documents. These include a non-refundable application fee of N10,000,000 (Ten Million Naira only), or any amount specified by the CBN from time to time, payable through electronic transfer or bank draft.

The submission requirements also entail proof of approval to operate in other jurisdictions or agency agreements (for all IMTOs) and evidence of tax clearance and incorporation documents in Nigeria for indigenous IMTOs. The latter should include the Certified True Copy of the Memorandum and Articles of Association, with the primary object clause indicating the provision of money transfer services.

Additionally, the document stipulates an annual renewal fee of N10 million or any amount specified by the CBN, payable via electronic transfer or bank draft on or before January 31 of each year. This marks a significant shift in the regulatory landscape for entities involved in international money transfers in Nigeria.

Previous post Revolutionizing Car Sales: HexoAutos Emerges as Nigeria’s Premier Marketplace
Next post The Eclipse Theatre Troupe Sets Sights on Guinness World Record for Longest Theatre Performance

Leave a Reply

Your email address will not be published. Required fields are marked *