See CBN issues instructions to Access, UBA, other banks on customers' domiciliary accounts

• The CBN has set the rules for FG's new nine-month window to allow Nigerians to deposit hidden dollars at home in banks
• The scheme the federal government hopes will help boost dollar inflow in the country for naira stability
• During the nine-month window, individuals will be allowed to deposit foreign currency without penalties, taxes, or scrutiny

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria (CBN) has issued guidelines for implementing the free foreign exchange deposit window, which the federal government recently announced.

The FG's exchange window, which kicked off officially on October 31, 2024, provides a nine-month window for Nigerians with foreign currencies to disclose and deposit the same in banks without paying taxes or penalties.

Nigerian government determined to boost forex inflow Photo credit: CBN
Source: Getty Images

In a circular with reference number FPR/DIR/PUB/CIR002/013 to banks dated November 5, 2024, the CBN clearly stated the dos and don'ts of the scheme to banks.

CBN issues instructions to banks

In the guidelines, CBN permits banks to trade with foreign currency deposited by participants in the scheme.

Part of the document stated:

"Commercial, merchant, and non-interest banks may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed."

CBN also specified that interest payments on deposits must align with the provisions in the guide to charges by banks and other financial institutions in Nigeria.

Other instructions to banks

Furthermore, the guidelines require banks to collect specific details from depositors, including their Bank Verification Number and National Identification Number for individuals or Tax Identification Number for entities.

Punch reports additional requirements, including the amount to be deposited and details of the applicant’s designated domiciliary account.

The CBN also mandated banks to adhere strictly to anti-money laundering laws and other financial integrity regulations, stating that banks must identify the beneficial owner of deposited funds and ensure that any deposits transferred via wire comply with existing transaction standards.

CBN further instructed banks to apply enhanced due diligence for funds repatriated from jurisdictions not fully compliant with Financial Action Task Force (FATF) Recommendations on financial transparency.

Fitch rates naira performance in FX markets

Earlier, Legit.ng reported that Fitch Ratings has expressed caution about the stability of Nigeria's foreign exchange market despite CBN's several assurances and efforts.

The agency believes that the Central Bank of Nigeria and other efforts have yet to yield a positive result.

There is a glimmer of hope for CBN as Nigeria’s gross foreign exchange reserves rose to $39 billion in October.

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Source: Legit.ng