CBN Issues Instructions To Banks As FG’s 9-Month Amnesty for Illegal Dollar Deposit Kicks Off
- The CBN has set the rules for FG's new nine-month window to allow Nigerians to deposit hidden dollars at home in banks
- The scheme the federal government hopes will help boost dollar inflow in the country for naira stability
- During the nine-month window, individuals will be allowed to deposit foreign currency without penalties, taxes, or scrutiny
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria (CBN) has issued guidelines for implementing the free foreign exchange deposit window announced by the federal government.
The FG's exchange window, which kicked off on October 31, 2024, provides a nine-month amnesty for Nigerians with foreign currencies at home to disclose and deposit the same in banks without paying taxes or penalties.
Source: Getty Images
In a circular with reference number FPR/DIR/PUB/CIR002/013 to banks dated November 5, 2024, the CBN clearly stated the dos and don'ts of the scheme.
PAY ATTENTION: Legit.ng Needs Your Help! Take our Survey Now and See Improvements at LEGIT.NG Tomorrow
CBN issues instructions to banks
In the guidelines, CBN permits banks to trade with foreign currency deposited by participants in the scheme.
Part of the document stated:
"Commercial, merchant, and non-interest banks may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed."
CBN also specified that interest payments on deposits must align with the provisions in the guide to charges by banks and other financial institutions in Nigeria.
Other instructions to banks
Furthermore, the guidelines require banks to collect specific details from depositors, including their Bank Verification Number and National Identification Number for individuals or Tax Identification Number for entities.
Punch reports additional requirements, including the amount to be deposited and details of the applicant’s designated domiciliary account.
The CBN also mandated banks to adhere strictly to anti-money laundering laws and other financial integrity regulations, stating that banks must identify the beneficial owner of deposited funds and ensure that any deposits transferred via wire comply with existing transaction standards.
Banks were also tasked to conduct customer due diligence, which includes
"Identifying the beneficial owner of funds for applicants who are transferring, repatriating, or depositing funds under the program, based on a risk assessment;
"Identifying the beneficial owner of the account receiving the transferred, repatriated, or deposited funds under the scheme;
"Ensuring that deposits under the scheme made via wire transfers comply with existing transaction requirements;
"Applying enhanced due diligence and scrutiny to funds repatriated from countries that do not adequately follow the FATF Recommendations."
Fitch rates naira performance in FX markets
Earlier, Legit.ng reported that Fitch Ratings has expressed caution about the stability of Nigeria's foreign exchange market despite CBN's several assurances and efforts.
The agency believes that the Central Bank of Nigeria and other efforts have yet to yield a positive result.
There is a glimmer of hope for CBN as Nigeria’s gross foreign exchange reserves rose to $39 billion in October.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
