CBN says banks, IMTOs ready to disburse diaspora remittances in dollar cash
* Recipients of diaspora remittances to get dollar by Friday
* CBN accuses IMTOs of diversion of dollars
* Diaspora remittances estimated at $24 bln
* CBN orders closure of naira general ledgers of IMTOs
By Oludarre Mayowa
The Central Bank of Nigeria (CBN) on Thursday said that its new policy on diaspora remittances would effectively take-off on Friday, December 4, following a meeting with the International Money Transfer Operators and their local agent banks.
The CBN governor, Godwin Emefiele stated this in a statement issued on Thursday, noting that all the IT systems of these IMTOs and the local agent banks have been properly configured to begin remittance on Friday.
According to the CBN Governor, in an effort to enable smooth implementation of the new policy, the regulatory bank 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.
“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,” Emefiele said.
Narrating why the CBN decided on the new policy, Emefiele said the regulatory bank investigations discovered that some IMTOs resorted to engaging in arbitrage arrangements on the naira dollar exchange rate which to a large extent resulted in a significant drop in flows into the country.
The Governor said the action of the IMROs also encouraged the use of unsafe unofficial channels, which also supported the diversion of remittance flows meant for Nigeria, thereby undermining our Foreign Exchange management framework.
“In the course of following up on the implementation of the aforementioned new policies, the CBN observed some pushback by some of the IMTOs who were bent on undermining the new policies.
“This was the reason the CBN had to insist on Wednesday, December 2, 2020, that all DMBs MUST close all Naira General Ledgers through which the Naira remittances were hitherto being carried out,” Emefiele said.
The regulatory bank had on Monday directed banks to pay recipients of diaspora remittances to be paid in dollar.
The move was meant to boost dollar liquidity in the domestic foreign exchange market and help support the wobbling local currency, which had peaked at N500 to the dollar by Monday.
However, following the release of the CBN circular on diaspora remittances, the local currency has recovered some lost grounds on the parallel market, trading at N470 to the dollar on Thursday.