IMTO: CBN tells banks to pay diaspora remittances in Naira not dollar

By Mathew Brangyet

The Central Bank of Nigeria (CBN) has announced it will begin the supply of Naira liquidity to eligible International Money Transfer Operators (IMTO) for settlement of diaspora remittances.

It disclosed this on Tuesday in a circular dated June 24, addressed to all Deposit Money Banks and International Money Transfer Operators (IMTO).

The apex bank said, “As part of CBN’s commitment to the smooth functioning of the foreign exchange markets and enabling greater remittance flows through formal channels, the Bank has implemented measures that will enable eligible International Money Transfer Operators (IMTOs) access Naira (NGN) liquidity through the CBN.

“These measures are aimed at widening access to local currency liquidity for the timely settlement of diaspora remittances.

Henceforth, eligible IMTO operators will be able to access the CBN window directly or through their Authorized Dealer Banks (ADBs) to execute transactions for the sale of foreign exchange in the market.”

READ ALSO: NCDC reports 1,598 suspected cholera cases across 107…

The CBN said that all IMTOs are expected to pay beneficiaries of remittances the equivalent of the foreign currency in naira.

“All licensed IMTOs are reminded that all diaspora remittances are expected to terminate in Naira and match with the corresponding foreign currency inflows,” the circular said.

The bank also said that the exchange rate that would be adopted for the transaction is the rate of the Nigerian Autonomous Foreign Exchan Market (NAFEM).

The CBN added, “The option of same day settlement will be available for transactions executed and confirmed before 12 noon on a trading date.

“The pricing for transactions executed with the CBN will be based on prevailing NAFEM rates, as referenced by an observable and acceptable market benchmark.

“Regulatory returns to be submitted to the CBN by all participants on a daily basis are mandatory and this is expected to contain all the relevant information on the sources of funds.

“All interested IMTOs are required to confirm their partner banks and advise standard settlement instructions to facilitate the smooth implementation of this initiative”.