The Central Bank of Nigeria (CBN) has banned banks and financial technology companies otherwise known as Fintechs, from operating International Money Transfer services (IMTOs).
The ban, communicated in a recent CBN statement, comes amid the apex bank's resolve to maintain stability in Nigeria’s foreign exchange market and encourage fund remittance through legal channels.
Before now, Fintechs operating in Nigeria had licences to operate international money transfer services as they were not affected by the 2014 guidelines which prohibited deposit money banks from acting as IMTOs.
As of 2021, about 47 approved IMTOs were published by the apex bank as approved operators and included some Fintechs like Flutterwave, Interswitch among others.
IMTOs accept cash to transfer to persons resident in Nigeria or another country. They also help personal accounts and foreign tourists visiting Nigeria carry out cross-border transfer services for personal purposes.
According to the guidelines released via its website and signed by the Director, Trade & Exchange Department, Dr. Hassan Mahmud, the apex bank said “All banks are prohibited from operating International Money Transfer services but can act as agents.
“Also, Financial Technology Companies are not allowed to obtain approval for IMTO.”
The apex bank in the circular, also increased the application fees for IMTO approval to ₦10 million while a minimum operating capital of $1 million was pegged for foreign IMTOs while their indigenous counterparts were to pay the naira equivalent.
The CBN also set the annual renewal fee of the IMTO approval at ₦10 million.
Renewals of IMTO licences are expected to be done within the first quarter of every year and where an IMTO fails to provide a copy of the CBN renewal within the first quarter of the year, banks have been urged to cease any further transaction with the IMTO.