The Central Bank of Nigeria (CBN) has provided further guidance to Deposit Money Banks (DMBs) on the operational changes to the foreign exchange market announced on June 14, 2023.
The CBN highlighted some of the key points of the guidance as follows
- All visible and invisible transactions (medicals, school fees, BTA/PTA, airline, and other remittances) are eligible for the Investors’ and Exporters’ (I & E) window.
- 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 utilize cash deposits not exceeding USD$ 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, due diligence, and adhering to the spirit and letter of extant AML/FT laws and other relevant rules and regulations.
- The CBN will prioritize orderly settlement of any committed FX forward transactions as they fall due in order to further boost market confidence.
- The Bank will normalize its CRR maintenance processes and ensure equity in its implementation across the banking industry.
- The CBN assured the banking public that it remains committed to ensuring a stable and efficient FX market that meets the needs of all legitimate users
What this means
On cash deposits
Before now there was a restriction on how much cash Nigerians can withdraw from their domiciliary accounts.
The restriction was also clouded with a lot of confusion as no one was sure how much cash they could withdraw.
At some point, the withdrawal of previously deposited cash was restricted to $10k per week or even monthly depending on the subsisting central bank policy.