In a dramatic move that would have telling effects on forex transactions, the Central Bank of Nigeria (CBN) has outlawed transfer of foreign exchange (forex) from one customer to another or what is conventionally known as customer-to-customer transfer.
Also, the CBN similarly prohibited forex cash lodgements into domiciliary accounts by a second party as it would now be effected by the account owners or holders only going forward.
According to an internal memo, this latest measures and protocols are being taken by the apex bank to allow for what experts believe would allow for examination of the utilisation of inflows into customers domiciliary accounts in Nigeria.
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The CBN in the circular says henceforth ” “forex inflows cannot be credited to customers until the legitimacy of funds is established.”
It states further; “They can have unfettered access by telegraphic transfers up to a limit of $40,000 monthly for payment of medical bills, school fees, subscription to professional bodies subject to existing CBN guidelines.
“Transfers from one customer to another is prohibited. Transfer within related companies is allowed subject to a limit of $50,000 per month.”
Similarly, it proposed that accruals from non-oil exports should be sold to banks, used for repayment of dollar term loans, and self-utilisation for trade transactions for LC, bills and Form A.
According to the apex bank, ” oil export proceeds from E&P companies are to be used to pay contractors and service providers employed by the oil companies in addition to the recommended uses for non-oil FX proceeds”.
The protocol states further that “offshore forex inflows from Nigerian banks and internal accounts to forex transfers sourced from offshore inflows are to be utilized for trading transactions subject to eligibility for E-Form M.”
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The internal memo states additionally: “Upon confirmation of the legitimacy of the inflows, customers can have unfettered access, subject to a maximum of $50,000,” the document read.
“Utilisation for trade transactions subject to processing of eligible trade transactions using E-Form M. Payment for services must be backed with demand note from offshore beneficiary and other regulatory documents.
“Related party transfers are allowed to the maximum of the inflow received. The transfer request should be backed by a signed instruction from the account holder.
” Payment of government fees and levies are also allowed to the maritime, oil and gas, aviation, government parastatals and export processing zones.”
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