How CBN busted an illegal transfer system

How CBN busted an illegal transfer system

By a seemingly innocuous circular released on July 22, 2016, the Central Bank of Nigeria (CBN) appears to have dealt a heavy blow to a money transfer business that has ripped off the Nigerian economy for years.

Nigerians working abroad remit home over $21 billion annually, but the benefits of this huge stock of forex has been denied the Nigerian economy owing to a racket perpetrated by unregistered International Money Transfer Operators (IMTOs).

It was learnt that these operators open Naira accounts from which they pay receivers of dollar remittances in local currency while retaining the supposedly remitted dollars abroad – a practice which a financial expert described as “a rip-off on the Nigerian economy of these dollars.”

The circular making it compulsory for all inward remittances to be forex-backed clearly states that all such inward dollars be sold to Bureaux De Change to put liquidity into the that segment of the market to cater to the needs of the retail end such as BTA, PTA, estacode purchases etc.

Contacted for comments on Tuesday evening, CBN’s Acting Director, Corporate Communications, Isaac Okorafor, told News Express: “We have not stopped the operations of any registered money transfer operator in the country. All we have done has been to ensure that all inward money transfers by our hardworking Diaspora and others are legal, transparent and to the benefit of the Nigerian economy.”

The CBN had earlier in the evening issued a statement warning the public to “Beware of Unregistered Money Transfer Operators.” The statement, signed by Okorafor, said:

“The Central Bank of Nigeria (CBN) wishes to advise Nigerians at home and in the Diaspora to beware of the unwholesome activities of some unlicensed International Money Transfer Operators (IMTOs) in Nigeria.

“This warning has become necessary because of the activities of some unregistered IMTOs, whose modes of operation are detrimental to the Nigerian economy.

“All financial service providers in Nigeria, just as in other jurisdictions, are required to be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.

“For the avoidance of doubt, all licensed International Money Transfer Operators, in line with the CBN Circular on the sale of foreign currency proceeds of July 22, 2016, are required to remit foreign currency to their respective agent banks in Nigeria for disbursement in Naira to the beneficiaries while the foreign currency proceeds are to be sold to Bureaux De Change operators, for onward retail to end users.

“The Central Bank of Nigeria will therefore not condone any attempt aimed at undermining the country’s foreign exchange regime.

“Accordingly, members of the public are advised to beware of the activities of such unregistered IMTOs for the greater economic good of Nigeria.”

News Express

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