The restrictions placed on domestic accounts by the Central Bank of Nigeria have been removed.
The CBN said in a statement on Sunday that the new regulation allowed account holders to deposit money without restriction, have unrestricted access to funds in accounts, and withdraw up to $10,000 per day.
CBN issues additional guidance on operational changes to the foreign exchange market, according to the press release.
Part of the statement said, “Ordinary domiciliary account holders shall have unrestricted access to funds in their accounts. Owners of domiciliary accounts are allowed to use cash deposits up to $10,000 per day or the telegraphic equivalent.
“DMBs shall submit returns to the CBN, including the ‘purpose’ of such transactions.
“Subject to DMBs conducting proper KYC, due diligence, and adhering to the spirit and letter of existing AML/CFT laws and other relevant rules and regulations,” reads the statement regarding restricted cash deposits into domestic accounts.
The PUNCH noted in May 2021 that banks had begun to impose new restrictions on the transfers that owners of domiciliary accounts could make from cash lodgements.
The maximum limit for foreign currency transfers by cash deposits is now $5,000 per month, according to a bank circular that The PUNCH was able to obtain in 2021.
This means that if the source of funds is a cash deposit into a domiciliary account, a monthly transfer limit of $5,000 will apply.
“Cash deposits of foreign currencies other than USD may be paid into domiciliary accounts (subject to a monthly equivalent limit of $5,000), but will not be permitted for transfer purposes.”
Following a meeting of the Bankers’ Committee held to discuss the implementation and implications of the policy changes for the banking industry, the CBN, however, restricted this limit.
The CBN stated that the changes to policy were made to encourage transparency, liquidity, and price discovery in the foreign exchange market in order to increase the supply of foreign exchange, reduce speculative activity, boost customer confidence, and ensure overall market stability.
In addition, the statement stated that all visible and invisible transactions (including remittances for travel, school fees, BTA/PTA, and other remittances) qualified for the Investors’ and Exporters’ window.
Banks were urged to make sure that all eligible invisible transactions were processed quickly on behalf of their clients using the current rate at the I & E window.
Additionally, it was stated that the CBN would give orderly settlement of any committed FX forward transactions priority as they became due in order to further strengthen market confidence.
The CBN would also normalize its procedures for maintaining the Cash Reserve Ratio and ensure equity in its application across the banking sector, all the while involving stakeholders in the ongoing reforms.
