By John Ikani
The Central Bank of Nigeria (CBN) has announced that customers will have unrestricted access to funds in their domiciliary accounts, and cash deposits into these accounts will not be limited.
The bank’s decision was conveyed in a statement following a meeting with the bankers’ committee on Sunday.
The purpose of the meeting was to provide additional guidance to deposit money banks (DMBs) regarding recent operational changes in the foreign exchange market.
The discussions aimed to address the implementation and implications of the policy changes for the banking public.
In response to the CBN’s press statement on June 14, 2023, regarding new guidelines in the foreign exchange market, an extraordinary Bankers’ Committee meeting was convened on Friday, June 16, 2023.
The objective of the meeting was to discuss the implementation and ramifications of the policy changes for the banking public.
The policy changes are intended to foster transparency, liquidity, and price discovery in the FX market.
The ultimate goal is to enhance FX supply, discourage speculation, instill customer confidence, and maintain overall stability in the market.
Dr. Isa Abdulmumin, the CBN’s director of corporate communications, outlined the guidance provided to Deposit Money Banks (DMBs) during the meeting.
All visible and invisible transactions, including medical expenses, school fees, BTA/PTA, airline remittances, and others, are eligible for the Investors’ and Exporters’ (I&E) window.
DMBs are instructed to process eligible invisible transactions on behalf of their customers promptly, utilizing the applicable rate at the I&E window.
Ordinary domiciliary account holders are granted unrestricted access to funds in their accounts.
They are permitted to utilize cash deposits up to USD$10,000 per day or its equivalent via telegraphic transfer.
DMBs are required to submit returns to the CBN, including the purpose of such transactions.
Cash deposits into domiciliary accounts will not be limited, provided that DMBs adhere to the necessary KYC (Know Your Customer), due diligence, and comply with the prevailing AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) laws, as well as other relevant rules and regulations.
Additionally, the central bank’s regulatory policy prioritizes the orderly settlement of committed FX forward transactions to boost market confidence.
The CBN also plans to normalize its Credit Reserve Ratio (CRR) maintenance processes and ensure equitable implementation across the banking industry.
“The CBN will continue to engage stakeholders and provide further guidance as it implements the ongoing reforms,” stated AbdulMumin in the release issued last night.
