CBN Directs IMTOs To Use I&E Window Rate To Convert Diaspora Remittances. Photo Credit: Reuters
In a move to bolster the foreign exchange market and streamline fund remittance, the Central Bank of Nigeria (CBN) has set the bar high for International Money Transfer Operators (IMTOs) with a fixed minimum share capital requirement of $1 million.
The Director, Trade & Exchange Department, Dr. Hassan Mahmud, outlined the stringent guidelines, emphasising the need for compliance with anti-money laundering and counter-terrorism financing regulations.
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Dr. Mahmud stated that “Applicants must adhere to the CBN’s regulations to combat money laundering, terrorism financing, and proliferation financing of weapons of mass destruction.”
The apex bank’s latest directive aims to channel funds through legal avenues, marking a shift in policy to strengthen Nigeria’s foreign exchange landscape.
IMTOs seeking to operate in Nigeria face a rigorous application process, including a non-refundable fee of N10 million, or an amount specified by the bank, payable to the CBN. The minimum share capital requirement of $1 million applies to foreign IMTOs, with an equivalent amount for indigenous operators.
While receiving an Approval-In-Principle (AIP) is a pivotal step, the CBN clarified that it cannot be used to commence operations. The AIP is contingent on meeting the stipulated requirements, and failure to do so may result in withdrawal.
To attain final approval, IMTOs must submit an application to the CBN within three months of obtaining AIP. The requirements include specifying authorized dealer banks as local agents, providing a copy of the agency agreement, and submitting a detailed business plan covering aspects like the nature of the business and internal control systems.
Additionally, IMTOs must pay an annual renewal fee of N10 million or an amount specified by the bank before January 31st each year, with license renewals expected within the first quarter. The CBN’s move reflects a concerted effort to fortify the regulatory framework, ensuring transparency and stability in the international money transfer system in Nigeria.
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