The Central Bank of Nigeria has released official guidelines for banks on the implementation of the free foreign exchange deposit window recently announced by the Federal Government.
The guidelines, which were issued on Tuesday, outline the procedures for participation in the scheme by commercial, merchant, and non-interest banks.
The scheme is designed to facilitate the deposit of foreign exchange by individuals and entities, aiming to further stabilize the country’s FX market.
The notice of the scheme guidelines, which takes effect from Wednesday, was jointly signed by the acting Director of the Financial Policy and Regulation Department, John Onojah, and the acting Director of the Banking Supervision Department, Dr Adetona Adedeji.
According to the document titled Guidelines on Implementation of the Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme, 2024, banks are now permitted to trade with the foreign exchange made available by participants in the 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.
“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,” part of the guidelines read.
The Federal Government recently launched a nine-month program, starting October 31, 2024, allowing individuals to deposit U.S. dollar bills held outside the formal banking system without facing scrutiny.
This initiative aims to encourage the repatriation of foreign currency and increase foreign exchange liquidity in the country.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed this after the 144th meeting of the National Economic Council, the country’s highest economic advisory body, chaired by Vice President Kashim Shettima at the State House, Abuja.
“There will be no penalty; there will be no taxes, and there will be no questions,” he told pressmen at a briefing after Thursday’s meeting.
In its latest guidelines, the CBN has specified that banks are required to obtain certain details from participants in the foreign exchange deposit scheme.
These details include the Bank Verification Number and National Identification Number for natural persons and directors of incorporated entities, or a Tax Identification Number for legal entities.
Additionally, banks must collect information on the amount of the International Trade and Foreign Currency (ITFC) to be deposited, as well as the details of the applicant’s designated domiciliary account where the ITFC will be deposited.
Banks may also request any other information deemed necessary from time to time to ensure compliance with the scheme’s requirements.
CBN also demanded that banks must not contravene anti-money laundering /Combating the Financing of Terrorism/Countering Proliferation Financing laws and regulations.
The apex bank said the banks must conduct customer due diligence, “including identifying the beneficial owner of the funds on applicants who are transferring, repatriating, or depositing funds under the programme, based on an assessment of the applicable risks;
“ii. identifying the beneficial owner of the account into which the funds are being transferred, repatriated, or deposited under the Scheme; iii. ensuring deposits under the Scheme by way of wire transfers are compliant with extant requirements regarding such transactions;
“and iv. subjecting funds repatriated from countries that do not adequately apply the FATF Recommendations to enhanced due diligence and scrutiny.”
