CBN Sets $20,000 and $200,000 Limits for Pan-African Payment Settlement
- The CBN has limited the number of dollars to be transacted on the PAPSS to $200,000 per quarter by authorised dealer banks (ADB)
- The apex bank also fixed a dollar limit of $20,000 per quarter for individual customers
- The information was communicated through an official circular issued to all authorised dealers in the country
The Central Bank of Nigeria (CBN) has implemented restrictions on dollar transactions within the Pan-African Payment and Settlement System (PAPSS).
The new development follows the Memorandum of Understanding (MoU) signed by some Nigerian banks and the African Continental Free Trade Agreement (AfCFTA) to remove trade barriers by adopting PAPSS.
As part of these measures, authorised dealer banks (ADB) are now limited to conducting transactions up to $200,000 per quarter, while individual customers are restricted to $20,000 per quarter.
Source: UGC
The information above was communicated through an official circular issued to all authorised dealers in the country.
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The circular, signed by Dr Ozoemena Nnaji, the director of the Trade and Exchange department at CBN, stated that transactions would now be priced according to CBN's foreign exchange rates.
According to Leadership, the central bank highlighted that submitting multiple applications through various authorised dealer banks (ADBs) is strictly prohibited.
It stated:
For settlement of PAPSS transactions by CBN, authorised dealers shall obtain the approval of CBN for USD cover before initiating payments on PAPSS. The request for approval shall be submitted online.
CBN will not provide foreign exchange for transactions
The bank also said authorised dealer banks have permission to maintain a USD settlement account with the PAPSS settlement bank exclusively for settling PAPSS transactions. It added that it would not provide foreign exchange for these transactions.
PAPSS is a global payment system and cross-border financial market infrastructure, facilitating remittance payments and trade activities among African nations.
According to the circular, PAPSS transactions remain trade-backed and an eligible payment mode limited to Bills for Collection.
Individual customers are restricted to a quarterly limit of $20,000, while Authorized Dealer Banks (ADB) have a quarterly limit of $200,000.
Naira now approved for trade transaction payment in UK
In related news, Legit.ng earlier reported that the United Kingdom has recently announced the inclusion of Nigeria's naira among the pre-approved currencies for financing transactions.
This decision follows Nigeria's central bank's move to abolish the multiple exchange rate system and float the naira.
As a result, the Export Finance Agency of the United Kingdom (UK) has stated that this development enables the provision of financing for deals with Nigerian companies denominated in local currency.
The UK agency further revealed that the naira is now among the selected West African currencies approved for facilitating commerce-related transactions with Britain.
Source: Legit.ng
