The Central Bank of Nigeria (CBN) has threatened to withdraw banks’ licenses to trade in foreign exchange if they collaborate with International Money Transfer Operators (IMTOs) in violation of its rule that recipients of diaspora remittances be paid in their preferred currency.
The CBN issued the warning in a circular that was signed by Ozoemena Nnaji, the department’s director, and released on Monday.
The CBN had instructed that recipients of such remittances to be paid in dollars through the selected banks of their choosing in a November 2020 circular to banks in an effort to increase diaspora remittances, particularly through the banking system.
The apex bank warned that some IMTOs do, however, pay diaspora remittances for unlawful operations through banks in defiance of this regulation.
The circular stated: “The attention of the CBN has been drawn to the increasing illegal activities by Money Transfer Operators in Nigeria, through banks, by terminating payments in Naira contrary to extant regulations.
“This unwholesome practice has some banks partnering with unlicensed international money transfer operators who disguise their transactions and terminate the same via local inter-bank transfers.
“Henceforth, any bank found to be aiding and abetting any IMTO or unlicensed operator in this activity would be appropriately sanctioned.
“We also wish to remind all banks that it is their responsibility to not only Know their Customers (KYC requirements) but also Know their customers’ business (KYCB. requirements).
“For the avoidance of doubt, all banks and IMTOs are to pay out proceeds of diaspora remittance only in US Dollars and comply with the guidelines on International Money Transfer Operations published by the Bank.
“Any bank found to be aiding/collaborating with IMTOs in terminating remittances in naira will have their authorised dealership licence withdrawn.”
