Central Bank of Nigeria (CBN) has issued revised guidelines on International Money Transfer Operators (IMTOs), barring banks and financial technology companies (fintechs) from directly providing international money transfer services.
Gatekeepers News reports that this development is contained in the revised guidelines for the operations of IMTOs, which were officially released on January 31, 2024.
The document read:
“All banks are prohibited from operating International Money Transfer services but can act as agents.
“Also, Financial Technology Companies are not allowed to obtain approval for IMTO.
“The provisions of BOFIA 2020 on the prohibition of employment of certain persons in banks shall also apply to IMTOS.”
The new guidelines state that banks can act as agents in facilitating these services, while fintechs are not allowed to obtain approval for IMTO operations.
In addition, the CBN has increased the application fee for an IMTO license from N500,000 to N10 million, marking a significant rise of about 1,900% over the past decade. The central bank has also established a minimum operating capital requirement of $1 million for foreign IMTOs and an equivalent amount for local IMTOs.
The CBN’s proactive measures aim to address concerns related to foreign currency speculation and hoarding among Nigerian banks. The central bank seeks to bring stability to the foreign exchange market and curb activities that may distort market dynamics.
While these measures demonstrate the CBN’s commitment to regulatory oversight and economic stability, they may introduce complexities to remittance payments into Nigeria, impacting both banks and fintechs involved in international money transfer services.
