CBN announces new policy on Diaspora remittances

 

The Central Bank of Nigeria (CBN) Monday announced a new policy that grants beneficiaries unfettered access to forex from Diaspora and other money transfer remittances like Western Union and MoneyGram.

The bank also clarified transactions that are eligible under the policy in line with global best practices.

The policy allows beneficiaries of Diaspora remittances through International Money Transfer Operators (IMTOs) to henceforth receive such inflows in the original foreign currency through the designated bank of their choice.

It explained that the new regulation is part of efforts to liberalise, simplify and improve the receipt and administration of Diaspora remittances into Nigeria.

The CBN in a circular titled: “Amendment to Procedures for Receipt of Diaspora Remittances,” dated November 30, 2020, signed by its Director, Trade and Exchange Department, Dr. Ozoemena Nnaji, and published on its website, said with the new policy, recipients of remittances may have the option of receiving such funds in foreign currency (US Dollars) cash or into their ordinary domiciliary accounts.

“These changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of Diaspora remittances into Nigeria,” the apex bank stated.

It explained that the changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that the recipients of remittances would receive a market-reflective exchange rate for their inflows.

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The bank urged strict compliance with the new guidelines.

In a separate circular titled: “Operations of Domiciliary Accounts,” also signed by Nnaji, the CBN clarified that following different interpretations on the operationalisation of domiciliary accounts and to ensure the stability of the foreign exchange market, export proceeds domiciliary accounts would continue to be operated based on existing regulations, which allow holders use of their funds for business operations only, with any extra funds sold in the Investors & Exporters’ (l&E) Window.

For ordinary domiciliary accounts, where such accounts are funded by electronic/wire transfer, account holders would be allowed unfettered and unrestricted use of the funds for eligible transactions.

But for accounts funded by cash lodgements, the bank said existing regulation will continue to apply, explaining that the clarifications were necessary given the vastly improved capabilities of the CBN to monitor transactions, forestall money laundering and prevent the adverse effect of dollarisation in the economy.

“All authorised dealers and the general public are to note that Bank Verification Number would be used to enforce compliance with these regulations. Please be guided accordingly,” it stated.