The Central Bank of Nigeria has removed the restrictions on domiciliary accounts.
According to a CBN statement issued on Sunday, the new law allows account holders to deposit freely, have unfettered access to funds in accounts, and withdraw up to $10,000 per day.
The message was captioned “CBN issues additional guidance on operational changes to the foreign exchange market.”
It read in part, “Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilise cash deposits not exceeding $ 10,000 per day or its equivalent via telegraphic transfer.
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“DMBs shall provide returns to the CBN, including the ‘purpose’ for such transactions.
“Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.”
The PUNCH reported in May 2021 that banks had started placing new limits on transfers that domiciliary accounts holders could make from cash lodgements.
A circular from one of the banks obtained by The PUNCH in 2021 stated, “The maximum limit for foreign currency transfers by cash deposits is now $5,000 per month.
“This means that only a maximum of $5,000 monthly will be allowed for transfers if the source of funds is a cash deposit into a domiciliary account.
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“Cash deposits of foreign currencies other than USD may be paid into domiciliary accounts (subject to an equivalent of $5,000 monthly limit) but will not be allowed for transfer purposes.”
The CBN, however, lowered this limit following a meeting of the Bankers’ Committee to discuss the implementation and ramifications of the policy changes for the banking public.
The CBN stated that the policy adjustments were intended to encourage openness, liquidity, and price discovery in the FX market in order to improve FX supply, discourage speculation, boost customer confidence, and ensure overall market stability.
The announcement further stated that the Investors’ and Exporters’ windows were open to all visible and invisible transactions (medicals, school fees, BTA/PTA, airline and other payments).
Banks were asked to conduct any eligible invisible transactions on behalf of their customers as soon as possible, using the applicable rate at the I & E window.
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It was also indicated that the CBN will prioritize the orderly settlement of any committed FX forward transactions when they were due in order to further improve market confidence.
It went on to say that the CBN would standardize its Cash Reserve Ratio maintenance processes and ensure equity in their execution across the banking industry, all while engaging stakeholders as it implements ongoing reforms.
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