Nigerian commercial banks and international money transfer operators (IMTOs) and commercial have agreed to start paying beneficiaries of diaspora remittances in foreign currencies through the designated bank of their choice, the Central Bank of Nigeria has announced.
This followed the apex bank’s insistence that all Deposit Money Banks (DMBs) must close all naira general ledgers through which the naira remittances were hitherto being carried out on Wednesday.
The governor of the CBN, Godwin Emefiele, made the announcement in his remark on improving remittance inflows into Nigeria, after his engagement with major IMTOs and the DMBs, Thursday in Abuja.
He said after the bank’s effort to improve remittance inflows into the country through official channels was frustrated by some IMTOs, the apex bank had on November 30 introduced a new policy initiative, which would help to boost remittance inflows and foster an environment that would enable a faster, cheaper, and more convenient flow of remittances back to Nigeria.
The policy does not only allow beneficiaries of diaspora remittances to receive inflows in foreign currencies through the designated banks of their choice, it also gives them the option of receiving the currency into their domiciliary accounts.
According to the bank, the changes are necessary to deepen the foreign exchange market, provide more liquidity, and create more transparency in the administration of diaspora remittances into Nigeria.
It also said the changes would help finance a future stream of investment opportunities for Nigerians in the diaspora, while also guaranteeing that recipients of remittances would receive a market reflective exchange rate for their inflows.
However, in the course of following up on the implementation of the new policies, the apex bank said it observed some pushback by some of the IMTOs who were bent on undermining the new policies.
“Following the announcement of these new policy measures, the Central Bank of Nigeria in an effort to enable smooth implementation, engaged with the commercial banks and the IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice,” Mr Emefiele said.
“As a result of these engagements which took place with major IMTOs and the DMBs, today, Thursday, December 3, 2020, the stakeholders have committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020.
“I, therefore, seize this opportunity to announce to Nigerians both at home and in the Diaspora, that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow Friday, December 4, 2020.
“We believe that these new policy measures would help in providing a more convenient channel for Nigerians in the diaspora to remit funds back to Nigeria, as well as ensure that these funds can contribute to the overall development of our economy,” he said.