The Central Bank of Nigeria (CBN) has imposed a ban on banks and financial technology companies (fintechs) participating in international money transfer services.
The revised guidelines for International Money Transfer Operators (IMTOs), unveiled on January 31, 2024, reveal the following key points:
Banks are now prohibited from directly operating international money transfer services but can act as agents.
Financial Technology Companies are barred from obtaining approval for IMTO services.
Provisions of the Banking and Other Financial Institutions Act (BOFIA) 2020 regarding the employment of certain persons in banks now extend to IMTOs.The ban, previously applicable only to deposit money banks in 2014, now includes fintechs.
In addition to the restrictions, the apex bank has substantially increased the application fee for an IMTO license.
The fee, which was N500,000 in 2014, has surged to N10 million in the revised guidelines, marking a staggering 1,900% increase over a decade.
The detailed application requirements for IMTOs seeking to operate in Nigeria include a non-refundable application fee of N10 million, approval to operate in other jurisdictions or an agency agreement, and evidence of tax clearance and incorporation documents for indigenous IMTOs.
Furthermore, there is an annual renewal fee of N10 million, payable on or before January 31 each year.
Failure to comply with renewal procedures within the first quarter of the year may lead to a cessation of transactions with the IMTO by the agent bank.
