Central Bank of Nigeria (CBN) has authorised banks to engage in trading with foreign currencies deposited as part of the recent amnesty initiative for the foreign exchange (FX) deposit window.
Gatekeepers News reports that the directive is outlined in a document dated November 5, which was signed by John Sonojah, the Acting Director of the Financial Policy and Regulation department, and Adetona Adedeji, the Acting Director of the Banking Supervision department.
The federal government introduced the ‘Disclosure Scheme’ on October 31, aimed at providing an amnesty for the foreign exchange deposit window. As outlined by the Ministry of Finance, this initiative is set to last for nine months and aims to promote transparency in the financial sector, ultimately bolstering Nigeria’s economic resilience, growth, and development.
The CBN has established guidelines for the participation of commercial, merchant, and non-interest banks (CMNIBs) in this scheme, which enables individuals and businesses to deposit foreign currencies.
These guidelines became effective on November 6. According to the document titled ‘Guidelines on Implementation of the Foreign Currency Disclosure, Deposit, Repatriation and Investment Scheme, 2024,’ banks now have the flexibility to trade with the foreign exchange supplied by participants in this scheme.
“Commercial, merchant, and non-interest banks may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed,” the document reads.
“Interest payment by CMNIBs on the balance in the designated domiciliary account shall be in line with relevant provisions of the Guide to Charges by Banks and Other Financial Institutions in Nigeria.”
CBN highlighted that banks are to open domiciliary accounts designated for the scheme for intending participants and receive and process applications from intending participants in the scheme in accordance with the scheme guidelines.
The banks are also to accept deposits of disclosed internationally tradable foreign currencies (ITFCs) from participants, either directly or from a legal person nominated by the participant.
CBN said other responsibilities include ensuring that ITFCs deposited by a participant are held in the designated domiciliary account and not later than 24 hours from the time the ITFC is deposited, issuing a receipt to the participant, indicating the originating country of the funds, and acknowledge that such funds were received for the scheme.
“Track and report to the Bank, participants’ ITFC investments in permissible investment instruments or permissible investment sectors; ensure that participants comply with the provisions of this guidelines, the principal executive order, scheme guidelines, and other applicable laws relating to the Scheme,” the CBN said.
“Treat with confidentiality, all information received from participants in the Scheme in line with the Nigerian data protection laws and regulations; render returns to the Bank in accordance with section 5.0 of this Guidelines; obtain from the intending participants the information listed in Section 3.1 of this Guidelines.
“Maintain appropriate and comprehensive records of data/information relating to transactions under the Scheme; and perform such other functions as the Bank may direct.”
According to the CBN, the CMNIBs are not to impose any restriction on the withdrawal from the designated domiciliary account of the participant (individual or business) — except as otherwise provided in the scheme guidelines.
The CMNIBS are also not to restrict the termination of any investment made by the participant in a permissible investment instrument or permissible investment sector with any such ITFC.
Also, the banks are to permit a participant to, at any time, exchange part or the whole ITFC in their designated domiciliary account for naira at the prevailing exchange rate, provided that such conversions are properly disclosed and reported in the CMNIB’s foreign exchange returns.
In implementing the scheme, CBN added that CMNIBs are required to comply with extant rules and regulations, including anti-money laundering/combating the financing of terrorism/countering proliferation financing (AML/CFT/CPF) laws and regulations.
