Nigeria’s Central Bank has now accepted Naira payouts for diaspora remittance, ending a ban that had been in place since December 2020
In a round dated July 10, 2023, Nigeria’s Central Bank accepted the fee of the Naira to beneficiaries of diaspora remittance. The round signifies that banks and International Money Transfer Operators (IMTOs) can now pay their recipients in Naira, ending a three-year ban. Part of the CBN’s round mentioned, “The Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.”
In December 2020, the CBN banned banks and IMTOs from paying recipients in Naira. The coverage additionally said that solely banks may switch funds onward to recipients. In principle, the CBN coverage ended the enterprise mannequin of many digital remittance corporations that allowed Nigerians overseas to ship cash on to the Naira accounts of recipients.
Months after the “Naira payment ban,” the CBN launched the Naira for Dollar Scheme in March 2021. These insurance policies had been a part of Godwin Emefiele’s makes an attempt to encourage diaspora remittances to maneuver by formal channels and enhance FX liquidity. The financial institution hoped to squeeze unlicensed IMTOs out of enterprise by insisting on paying recipients overseas forex. But given the recognition of digital remittance apps, which permit clients to obtain cash in Naira, it’s uncertain that these insurance policies succeeded.
This latest coverage removing is one other step in the direction of loosening the strict management the CBN has exercised over FX charges within the final 5 years. It’s additionally nice for clients who can now select between receiving their funds in overseas forex, eNaira and the Naira. Customers who select to obtain their funds in Naira will probably be paid utilizing the Investors & Exporters Window charge on the day of the transaction.
The CBN’s round additionally up to date the checklist of registered IMTOs in Nigeria. In February 2021, the CBN listed 47 accepted IMTOs, however this week’s round expanded the checklist to 62 corporations. Some newly accepted IMTOs embody Comet Trading, CSL Pay Limited, Direkt Wire UK Limited, Fiem Group LLC DBA Ping Express, Lycamoney monetary companies restricted, and SimbaPay Limited.
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