CBN Issues Guidelines Stopping Foreign Banks From Taking Deposits, Funds Transfer

• The Central Bank of Nigeria has stopped foreign banks operating in Nigeria from taking deposits
• The bank said that foreign banks, especially representative offices of the banks, are barred from also conducting funds transfer
• CBN stated that foreign banks could only engage in services that show them displaying the brand and services of their parent company

The Central Bank of Nigeria (CBN) has banned foreign banks operating in Nigeria from receiving funds locally.

In a guideline released on Thursday, October 13, 2022, and signed by CBN's Director, Financial Policy & Regulation Department, Chibuzo Efobi, the bank said licensed foreign banks operating in Nigeria would not be allowed to provide services specified in Nigeria as banking business, including deposits and funds transfer.

Offices of foreign banks not allowed to process funds

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In the guideline titled Regulation of Representatives of Offices of Foreign Banks in Nigeria, the apex bank said licensed operators are not allowed to provide commercial or trading activities that may lead to issuing invoices for services generated.

The Nation reported that foreign banks are also banned from accepting orders on behalf of the foreign parent and engaging directly in any financial business.

The Godwin Effiefele-led bank directed representatives offices of foreign banks to do the crucial purpose of displaying the brand and services of their parent firms. The banks are also mandated to spur foreign direct investments in their parent companies in Nigeria by connecting the capital to various investment opportunities.

Requirements for setting up representative offices in Nigeria

Additionally, the apex bank's guidelines listed financial requirements for foreign banks' rep offices in Nigeria, including an application fee of N5 million and licensing fee of N10 million.

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Also, CBN said the representative offices should use the parent name only in their documents and correspondences, including signage, letterheads and business cards.

The financial services regulator stated that it would carry out periodic supervision of representative offices and risk-based which include a review of the activities conducted, a general assessment of its management and supervision, a review of whether the offices are compliant with applicable regulations and conditions placed on their operations and activities as part of the bank's approval of its founding.

Emefiele laments the rise of fintech banking, says It's disturbing

Recall that Legit.ng reported that Godwin Emefele, the governor of the Central Bank of Nigeria (CBN), stated that the rapid growth of the development of fintech firms has continued to change the financial industry in Nigeria.

He said the growth has continued to disrupt traditional ways of banking and offering financial services in the sector. Emefiele said the development is disturbing.

Emefiele stated the need for the CBN and other regulatory agencies to put solid regulatory checks in place to help mitigate the tragic incident that may occur as the country allows the growth of fintech.

Source: Legit.ng