'How IMTOs violate CBN directive on foreign currency remittances'

The Central Bank of Nigeria (CBN) on Wednesday said few International Money Transfer Operators (IMTOs) have failed to comply with its foreign currency remittances.

The apex says that operators continued to pay remittances in local currency contrary to the regulatory directive.

The Director, trade and Exchange, Department and director, payments System Management Department in a signed circular titled, “circular to International Money Transfer Operators (IMTOs) and Payment Service Providers (PSPs)”, stated that, “Following the recent policy pronouncements on amendments to procedures for receipt of Diaspora remittances, the CBN notes material compliance by the majority of market participants as beneficiaries of remittances through IMTOs now receive foreign currency through their designated banks. However, and regrettably, a few operators continue to pay remittances in local currency contrary to the regulatory directive.”

According to the circular, the CBN highlighted additional operational guidelines for IMTOs which include, “Switches and processors should immediately cease all local currency transfers in respect of foreign remittances through IMTOs.

“All MMOs are required to immediately disable wallets from receipt of funds from IMTOs.

“Payment service providers are directed to cease integrating their systems with IMTOs going forward and must prevent comingling of remittances with other legitimate transactions.

“All IMTOs are required to immediately disclose to beneficiaries that they exercise discretion to receive a transfer in foreign currency cash or directly into their domiciliary accounts.

“A central reporting portal for all foreign remittances to be managed by the Nigerian Interbank Settlement System (NIBSS) is currently under development to improve visibility of foreign remittance flows.”

“All licensed institutions are required to comply with the foregoing guidelines as contraventions will attract stiff regulatory sanction including revocation of license”, the circular added.