Fakoyejo Olalekan
The domiciliary account withdrawal limit has been increased to $10,000 per day by the Central Bank of Nigeria (CBN), as the apex bank issues six new directives to Deposit Money Banks (DMBs).
CBN released new foreign exchange (Forex) directives to commercial banks in a circular dated 16 June 2023, after the financial regulator held an extraordinary Bankers’ Committee meeting.
Join our WhatsApp ChannelAccording to the CBN Director, Banking Supervision Department, Haruna Mustafa, who signed the circular, the apex bank is making changes to the foreign exchange policies to ensure transparency and increase liquidity.
Also, the statement reads that the foreign exchange reforms will lead to the discovery of forex price, stabilise rates and prevent speculation in the forex market.
“These policy changes aim to promote transparency, liquidity and price discovery in the FX market in order to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market,” the circular noted.
Prime Business Africa notes that the domiciliary account withdrawal limit was $10,000 per week and later per month according to an online media report.
However, domiciliary account holders in GTBank, Zenith Bank, Access Bank and other deposit money banks will now be able to withdraw a maximum of $10,000 from their accounts per day, indicating supply of forex liquidity will rise going forward.
The CBN told banks to update their customers on these changes: “Banks are encouraged to notify their customers,” adding that it “will continue to engage stakeholders and issue further guidance as it implements the ongoing reforms.”
Six new CBN foreign exchange directives to banks
- All visible and invisible transactions (medicals, school fees, BTA/PTA, airline and other remittances) are eligible for the Investors’ and Exporters’ (l & E) window.
- DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window.
- Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilize cash deposits not exceeding USD$ 10,000 per day or its equivalent via telegraphic transfer. DMBs shall provide returns to the CBN including the “purpose” for such transactions.
- Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.
- The CBN will prioritize orderly settlement of any committed FX forward transactions as they fall due in order to further boost market confidence.
- The Bank will normalize its CRR maintenance processes and ensure equity in its implementation across the banking industry.
This is a proactive approach to free up banking. Thanks to the team for freeing us from emefiele disincentive banking policy.