The restrictions on domiciliary accounts have been abolished by the Central Bank of Nigeria.
The Punch reported that the CBN released in a statement on Sunday that the new regulations gave account holders unlimited deposit options, unrestricted access to funds in account, and daily withdrawal limits of up to $10,000.
The press release’s headline said, “CBN issues further guidance on operational changes to the foreign exchange market.”
The statement said, in part, “Ordinary Domiciliary Account Holders shall have full and unhindered access to funds in their accounts. Holders of domiciliary accounts may use cash deposits up to $10,000 per day or it’s equivalent via telegraphic transfer.
“DMBs will submit returns to the CBN, together with the ‘purpose’ for such transactions.
“Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.”
Recall that in May 2021, banks had begun to impose additional restrictions on the transfers that owners of domiciliary accounts might make from cash lodgements.
The maximum limit for foreign currency transfers via cash deposits is now $5,000 per month, according to a bank circular released in 2021.
“This means that if the source of funds is a cash deposit into a domiciliary account, a monthly transfer limit of $5,000 will apply.
“Cash deposits of foreign currencies other than USD may be paid into domiciliary accounts (subject to a limit of equivalent $5,000 per month), but will not be permitted for transfer purposes.”
After a meeting of the Bankers’ Committee to discuss the implementation of the new policies and their effects on the banking industry, the CBN nevertheless set a restriction on this allowance.
The CBN stated that the policy modifications sought to encourage transparency, liquidity, and price discovery in the FX market in order to improve FX supply, deter speculative activity, boost consumer confidence, and guarantee overall market stability.
The statement added that the Investors’ and Exporters’ window applied to all visible and invisible transactions, including remittances for travel, school fees, BTA/PTA, and medical expenses.
Banks were asked to make sure that all eligible invisible transactions for their customers were processed quickly and at the I & E window at the appropriate rate.
In order to further increase market confidence, it was also indicated that the CBN would give orderly payment of any committed FX forward transactions priority as they were due.
The CBN would engage stakeholders as it carried out the current reforms, normalize its procedures for maintaining the Cash Reserve Ratio, and guarantee equity in its application across the banking sector.
