IMTOs secure CBN approval to trade on official market

In a bid to enhance local currency liquidity for the settlement of diaspora remittances, the Central Bank of Nigeria (CBN) has granted eligible international money transfer operators (IMTOs) access to naira liquidity at the official window.

IMTOs are companies\service providers that facilitate cross-border money transfer services.

The announcement was made by the apex bank in a circular on Monday.

CBN only a few weeks ago reached an agreement in principle with 14 new (IMTOs) to enhance remittances.

Speaking in the circular addressed to all Deposit Money Bank, IMTOs and the General Public, Dr W J Kanya, Ag Director, Trade and Exchange Department of the apex bank, he noted that the development is also part of the regulator’s commitment to the smooth functioning of the foreign exchange (FX) markets and enabling greater remittance flows through formal channels.

“CBN has implemented measures that will enable eligible International Money Transfer Operators (IMTOS) access NGN liquidity at the CBN window. These measures are aimed at widening access to local currency liquidity for the settlement of diaspora remittances,” the CBN said.

“Therefore, eligible IMTO operators will be able to access the CBN window directly or through their Authorized Dealer Banks (ADBs) to execute transactions for the sale of foreign exchange in the market.”

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According to the CBN, they facilitate the transfer of funds from individuals or entities residing abroad to recipients in Nigeria and the payment of a corresponding sum to a beneficiary through a clearing network to which the IMTO belongs.

Stipulating rules to guide the process and enable compliance, the CBN said “same day settlement” will be available for transactions executed “before 12 noon on a trading date”.

The bank said pricing on the CBN portal will be reflective of NAFEX traded rates “observable on an acceptable market benchmark”.

“The operation of this market segment follows the existing arrangement in place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions,” the regulator added.

“Regulatory returns to be submitted to the CBN by all participants on a daily basis, are mandatory and this is expected to contain all the relevant information on the sources of funds.

“Participants in this segment are the IMTOS, Authorized Dealer Banks and CBN. This circular is with immediate effect.”

By: Babajide Okeowo

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