CBN Shuts Down Diaspora Remittance In Naira Under New Policy

Having reviewed and investigated the methods of International Money Transfer Operators in Nigeria, the Central Bank of Nigeria, CBN, noted that IMTOs could be involved in slowing down remittance inflows.

IMTOs are engaging in naira foreign exchange that profits them through unequal prices. According to CBN circular on diaspora remittance policy, this “resulted in a significant drop in flows into the country”.

Their methods also spurred the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria.

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The CBN is implementing the amended policy for diaspora remittance from December 4, 2020. This is in an effort to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient.

CBN new remittance policy

I. Beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) through the designated bank of their choice.

II. Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.

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The CBN has engaged with the commercial banks and the IMTOs to ensure smooth implementation of the new policy. Recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice it said.

Furthermore, the CBN also weighed the benefits of the estimated annual remittance inflow of close to $24bn. It said this “could help in improving our balance of payment position, reduce our dependence on external borrowing and mitigate the impact of COVID-19 on foreign exchange inflows into the country”.

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