The Central Bank of Nigeria (CBN) has ordered switches and processors to immediately stop all domestic currency transfers in respect of foreign remittances through International Money Transfer Operators (IMTOs).
The CBN said in a circular to IMTOs and payment service providers on Wednesday that all money market operators were to instantly disable wallets from collection of funds from IMTOs.
The regulator said following the recent policy shift allowing beneficiaries to receive diaspora remittances in dollar, it observed a material compliance by a good number of market participants as recipients of remittances through IMTOs now received foreign currency through designated banks.
But it disapproved of the practice of a couple of operators who continued to process remittance in local currency in contravention of the directive of the CBN.
“Payment service providers are directed to cease integrating their systems with IMTOs going forward and must prevent comingling of remittances with other legitimate transactions,” the statement said.
“All IMTOs are required to immediately disclose to beneficiaries that they exercise discretion to receive transfer in foreign currency cash or directly into their domiciliary accounts.
“A central reporting portal for all foreign remittances to be managed by the Nigerian Interbank Settlement System (NIBSS) is currently under development to improve visibility of foreign remittances flows,” the CBN circular said.
The CBN ordered all licensed institutions to abide by the new regulations on foreign remittances, as violation would attract stiff penalties including licence revocation
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