CBN lifts restrictions on cash deposits into domiciliary account
The Central Bank of Nigeria (CBN) had removed all restrictions limiting the access of ordinary domiciliary account holders to their money.
In addition to removing all restrictions, the CBN has also directed that “cash deposits into domiciliary accounts will not be restricted.
However, cash deposits into domiciliary Accounts will still be subject “to DMBs
conducting proper Know Your Customer (KYC), due diligence and adherence to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations”.
The CBN in a “Further Guidance on Operational Changes to Foreign Exchange Market” issued on Sunday directed all Deposit Money Banks (DMBs) to ensure that “ordinary domiciliary account holders can now have unfettered and unrestricted access to funds in their accounts”.
The Director, Corporate Communications of the CBN, Dr. Isa Abdulmumin said the new policy changes “aim to promote transparency, liquidity and price discovery in the FX market.
This he said is “in order to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market”.
The decision to issue new guidance on Forex market operations Isa said was taken at an extraordinary Bankers’ Committee meeting held on Friday, June 16, 2023.
According to the new guidance, domiciliary account holders are now “permitted to utilize cash deposits not exceeding USD$10,000 per day or its equivalent via telegraphic transfer.
Deposit Money Banks (DMBs) were ordered to “provide returns to the CBN, including the ‘purpose’ for such transactions”.
Other additional changes introduced in the Forex market by the CBN are that, it “will prioritize orderly settlement of any committed FX forward transactions as they fall due in order to boost market confidence.
Regarding foreign exchange for visibles and invisibles, the apex has decided that “all visible and invisible transactions (medicals, school fees, BTA/PTA, airline
and other remittances) will now be eligible for the Investors’ and Exporters’ (I & E) window.
As a result of this, DMBs have been told to “ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window”.
The CBN in its guidance has resolved to “normalize its Cash Reserve Ratio (CRR) maintenance processes and ensure equity in its implementation across the banking industry.
The CBN said it will issue further guidance as it implements the ongoing reforms as well as continue to engage stakeholders.
