The Central Bank of Nigeria (CBN) has issued new rules clarifying that commercial, merchant and non-interest banks (CMNIBs) should let holders convert their Internationally Tradable Foreign Currency (ITTC) balances in designated domiciliary accounts into the local currency, the naira at any time, using the prevailing exchange rate.
The bank disclosed that all conversions must be fully disclosed and reported as part of the bank’s exchange rate requirements. NigeriaMedia reported that in February 2024, the apex bank reaffirmed that it would not coerce domiciliary account holders to convert their holdings into naira.
The new guidelines allow foreign currency holders in the diaspora and Nigeria with offshore accounts full access to trade eligible currencies.
According to the CBN, foreign currencies in domiciliary accounts held in offshore accounts by Nigerians in the diaspora, at home in cash or otherwise, or retained in electronic form can be traded.
The announcement comes as the bank released the Guidelines on Implementing the Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme 2024, based on Executive Order 15 issued in 2023, to improve the oversight of foreign exchange assets held by Nigerian residents.
BusinessDay reports that the directives aim to boost transparency, streamline foreign currency management in Nigeria and reinforce the apex bank’s commitment to a structured and participant-friendly regulatory framework for FX....Read Full Article [Click Here>]
Per the guidelines, CMNIBs are expected to comply with a series of requirements for handling ITFC under the initiative.
A previous report by Legit.ng shows that part of the critical directives is for banks to open designated domiciliary accounts for participants, via which they can process conversions of ITFC into naira without restrictions on withdrawals or investment terminations.
The banks must collect detailed data from applicants, including the Bank Verification Number (BVN), National Identification Number (NIN), Tax Identification Number (TIN), and the specific amount of ITFC to be deposited.
It stated that interest rates on uninvested domiciliary account balances must follow the guidelines. It also said that banks can trade with uninvested ITFC balances, provided they are available upon the participant’s request.
Also, CMNIBs must issue receipts within 24 hours of deposits, acknowledging the funds’ origin and confirming receipt for the scheme.
