Policy changes: CBN releases new reforms, relaxes restriction on domiciliary accounts

By Bukola Hameed

Following the Central Bank of Nigeria (CBN) new guidelines in the Foreign Exchange (FX) market recently released, the apex bank has announced further policy changes.

According to the Director, Corporate Communications, Dr Isa AbdulMumin, these policy changes aims to promote transparency, liquidity and price discovery in the FX market.

AbdulMumin said that this is in order to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market.

He said that in line with deliberations at an extraordinary Bankers’ Committee meeting held on June 16, the CBN provided further guidance to Deposit Money Banks (DMBs) as follows:

“All visible and invisible transactions (medicals, school fees, BTA/PTA, airline and other remittances) are eligible for the Investors’ and Exporters’ (I & E) window.

“DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window.

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“Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts.

“Domiciliary account holders are permitted to utilise cash deposits not exceeding 10,000 dollars per day or its equivalent via telegraphic transfer,” he said.

The CBN spokesman said that the DMBs are mandated to provide returns to the CBN, including the “purpose” for such transactions.

He added that cash deposits into domiciliary accounts would not be restricted, subject to DMBs conducting proper Know Your Customer (KYC), due diligence.

“The CBN will prioritise the orderly settlement of any committed FX forward transactions as they fall due in order to boost market confidence further.

“The Bank will normalise its Cash Reserve Ratio (CRR) maintenance processes and ensure equity in its implementation across the banking industry,” he assured.

He added that the apex bank would continue to engage stakeholders and issue further guidance as it implements the ongoing reforms.