The Central Bank of Nigeria (CBN) has issued revised guidelines for International Money Transfer Operators (IMTOs), prohibiting banks and financial technology companies (fintechs) from directly offering international money transfer services.
The revised guidelines, officially released on January 31, 2024, extend the ban to include fintechs, tightening the regulatory framework for money transfer services.
The key highlights of the revised guidelines include:
- Prohibition on Banks and Fintechs: All banks are now prohibited from operating International Money Transfer services. However, they can act as agents. Financial Technology Companies are also barred from obtaining approval for IMTO.
- Increased Application Fee: The application fee for an IMTO license has been significantly increased from N500,000 in 2014 to N10 million in the revised guidelines, reflecting a substantial 1,900% increase over the past decade.
- Minimum Operating Capital Requirement: The CBN has established a minimum operating capital requirement of $1 million for foreign IMTO entities and an equivalent amount for local IMTOs.
- Exchange Rate Quoting: IMTOs are now directed to quote exchange rates for naira payout to beneficiaries based on prevailing market rates at the Nigerian Foreign Exchange Market on a willing seller, willing buyer basis. The allowable limit on exchange rates has been removed.
- Annual Renewal: IMTOs are required to renew their approval annually, with a renewal fee of N10 million payable to the CBN through electronic transfer or bank draft.
The CBN’s move aims to streamline and strengthen the operations of IMTOs in Nigeria, ensuring compliance with regulatory standards and fostering a transparent and efficient money transfer ecosystem.
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