Nigeria’s Central Bank Bans Banks, Fintechs from International Money Transfers


The Central Bank of Nigeria (CBN) has modified its guidelines for International Money Transfer Operators (IMTOs), prohibiting banks and fintechs from providing international money transfer services.

The current recommendations aim to provide guidance to IMTOs in accordance with the CBN’s regulatory framework. The prior standards, issued in 2014, only applied to deposit money institutions; the new rules now encompass fintechs.

“All banks are barred from providing international money transfer services, but they can operate as agents. Furthermore, financial technology companies are not permitted to get clearance for IMTO.”

“The provisions of BOFIA 2020 on the prohibition of employment of certain persons in banks shall also apply to IMTOS.”

“In line with BOFAI 2020, all the conditions stipulating the exclusion for certain individuals from the management of banks shall apply to the management of International Money Transfers Services”

To obtain final permission, the central bank stated that any IMTO seeking to operate in Nigeria must submit an application to the Director of the Trade and Exchange Department.

In addition, the IMTO must submit approval to operate in other jurisdictions or agency agreements, as well as documentation of tax clearance and Nigerian incorporation paperwork. Indigenous IMTOs should additionally have a Memorandum and Articles of Association (Certified True Copy), with the primary object clause specifying the provision of money transfer services.

The CBN also upped the application price for the IMTO licence from N500,000 in 2014 to N10 million.

The IMTO license requires an annual renewal cost of N10 million Naira, or any amount as specified by the apex bank from time to time. This charge is payable by internet transfer or bank draft on or before January 31st of each year.

The renewal of IMTO approval is required in the first quarter of each year. If an IMTO fails to furnish its agent bank with a copy of the CBN’s renewal of its approval for that year within the first quarter, the bank should suspend all further transactions with the IMTO.

The circular requires a minimum share capital of $1 million for foreign firms and an equivalent amount for domestic IMTOs to operate.

The former minimum operating capital requirement for International Money Transfer Operators (IMTOs) was N2 billion for Nigerian businesses and N50 million or its equivalent for foreign enterprises.

The bank stated that if the applicant meets the following standards and has a favorable conclusion, they would be granted an Approval-In-Principle to open a bank account and complete pre-operational operations.

The CBN’s restriction on international money transfer services aims to strengthen the currency and stabilize the FX market.

The instructions state that applicants must follow the CBN’s anti-money laundering, combatting the financing of terrorism, and countering proliferation funding of weapons of mass destruction regulations.

To stabilize Nigeria’s erratic exchange rate, the Central Bank of Nigeria ordered banks to unload surplus dollar reserves by February 1, 2024.

Written by PH

Leave a Reply

Your email address will not be published. Required fields are marked *

Mozambique to End 50-Year Hydropower Deal with South Africa

Madagascar Celebrated at London Orchid Festival