The Central Bank of Nigeria (CBN) has issued a directive to banks, instructing them to allow customers unrestricted access to funds in their domiciliary accounts. This decision comes as part of the CBN’s efforts to promote transparency, liquidity, and price discovery in the foreign exchange (FX) market, while also enhancing customer confidence and overall stability.
According to the CBN’s directive, customers with domiciliary accounts can utilize cash deposits of up to $10,000 per day or its equivalent through telegraphic transfers. Additionally, all visible and invisible transactions, including medical expenses, school fees, BTA/PTA, airline remittances, and other remittances, are eligible for the Investors’ and Exporters’ (I&E) window.
Deposit Money Banks (DMBs) have been instructed to promptly process eligible invisible transactions on behalf of their customers using the applicable rate at the I&E window. Ordinary domiciliary account holders will have unrestricted access to funds in their accounts, while DMBs are required to provide returns to the CBN, specifying the purpose of such transactions.
The directive emphasizes that cash deposits into domiciliary accounts will not be restricted, provided that DMBs adhere to proper Know Your Customer (KYC) and due diligence procedures, as well as comply with anti-money laundering and counter financing of terrorism (AML/CFT) laws and relevant regulations.
The CBN has assured stakeholders that it will prioritize the orderly settlement of committed FX forward transactions to bolster market confidence. Furthermore, the bank plans to normalize its Cash Reserve Ratio (CRR) maintenance processes and ensure equitable implementation across the banking industry.
The CBN remains committed to engaging with stakeholders and will issue further guidance as it continues to implement ongoing reforms in the FX market.
