The Central Bank of Nigeria (CBN) says cash deposits into domiciliary accounts will not be restricted, and customers “shall have unfettered and unrestricted access to funds in their accounts”. The bank spoke in a statement issued after a meeting with the bankers’ committee on Sunday.
The meeting was meant to provide further guidance to deposit money banks (DMBs) on the recent operational changes to the foreign exchange market and to discuss the implementation and implications of the policy changes for the banking public.
The new directive nullifies the transaction limit that banks placed on domiciliary accounts in 2021, in compliance with regulatory instructions from the CBN. Advertisement In the past few days, Nigeria’s foreign exchange (FX) market has witnessed significant events following the implementation of reforms aimed at repositioning the country’s economy.
On June 14, the regulator announced the unification of all segments of Nigeria’s FX market, and the floating of the local currency. The policy effectively collapsed all FX windows into the investors and exporters (I&E) window, the CBN said. In its latest statement, the CBN said it aims to promote transparency, liquidity, and price discovery in the FX market in order to improve FX supply with the changes in its policy.
This, the apex bank said, would discourage speculation, enhance customer confidence and ensure overall stability in the FX market; adding that more guidance would be conveyed to authorised dealers and the general public in due course. “All visible and invisible transactions (medicals, school fees, BTA/PTA, airline, and other remittances) are eligible for the investors’ and exporters’ (I&E) window, ” the statement reads. “DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I&E window. “Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilise cash deposits not exceeding $10,000 per day or its equivalent via telegraphic transfer. “DMBs shall provide returns to the CBN including the purpose for such transactions. Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC (know your customer), due diligence, and adhering to the spirit and letter of extant anti-money laundering/ combating the financing of terrorism laws and other relevant rules and regulations.
“The CBN will prioritise orderly settlement of any committed FX forward transactions as they fall due in order to further boost market confidence.” The bank added that the cash reserve ratio (CRR) will maintain its processes while ensuring equity in its implementation across the banking industry. The CBN also assured the banking public that it remains committed to “ensuring a stable and efficient FX market that meets the needs of all legitimate users”.