The Central Bank of Nigeria (CBN) has implemented a new directive barring international money transfer operators (IMTOs) from paying Nigerians in US Dollars for diaspora remittances.
IMTOs, including prominent names like WorldRemit and Sendwave, have already begun updating their systems to comply with the new regulations. Nigerians residing abroad who wish to send money back home will now only be able to do so in the equivalent amount in naira.
In line with the CBN’s revised guidelines, all inbound money transfers to Nigeria must be paid out in naira, either through a bank account or in cash. Transactions exceeding $200 will be processed through a bank account, while cash payments will require satisfactory means of identification.
The decision to enforce Naira payments for remittances aligns with CBN’s efforts to boost forex supply and regulate the foreign exchange market. Over 40 authorised IMTOs operate in Nigeria, facilitating funds transfers for individuals and entities worldwide.
Furthermore, the CBN has substantially increased the application fee for licensing IMTOs, from N500,000 to N10 million, as part of the updated guidelines. Banks are now prohibited from operating international money transfer services directly but can act as agents for IMTOs.
Prospective IMTOs seeking to operate in Nigeria must meet various prerequisites, including approval to operate in other jurisdictions, evidence of tax clearance, and incorporation documents. Additionally, IMTOs will be subject to an annual renewal fee of N10 million, payable by January 31 each year.
The CBN’s decision underscores its commitment to regulating the financial sector and ensuring transparency in international money transfers, albeit with significant changes affecting both operators and recipients.
