The Central Bank of Nigeria (CBN) on Friday announced nine new guidelines for Deposit Money Banks (DMBs) to deposit excess foreign currency notes at its Lagos and Abuja branches.
This initiative, according to the bank, is intended to achieve convergence in the exchange rates of the parallel and official markets.
The directive was announced in a circular to all commercial banks signed by Solaja Olayemi, the Acting Director of the Currency Operations Department.
The key directives include:
- A mandatory three-working-day notice in writing to the Branch Controller at CBN Lagos or Abuja, detailing the owners of the foreign currency to be deposited.
- The deposit thresholds are set at a maximum of $10 million for higher bills ($100 and $50) and $1 million for lower bills ($20 and below).
- The pounds and euro notes are capped at £1 million and €1 million respectively.
- Each deposit must be witnessed and confirmed by two representatives of the depositing bank, with denominations segregated into separate boxes.
- The use of CBN-registered Cash-in-Transit (CIT) companies for these transactions is mandated.
- The deposit window is limited to between 8 am and 12 pm, and deposits will be counted and authenticated on the same day in the presence of bank representatives.
- The CBN will credit the DMBs’ accounts through their offshore correspondent banks within a T+5 cycle time.
- A handling charge of 0.30% of the authenticated amount will be deducted from the DMBs’ current accounts with the CBN.
- Non-compliance with any of the guidelines will result in the rejection of forex deposits.
The Apex Bank noted, “In order to deepen the foreign exchange market, boost liquidity, and attain convergence in the exchange rates of the parallel and official markets, the Central Bank of Nigeria (CBN) has approved that DMBs may deposit their excess foreign currency notes with Lagos and Abuja branches of the bank,” the circular read.
The CBN has approved the deposit of excess foreign currency notes by DMBs at its Lagos and Abuja branches, following increasing demands from these banks to transfer their forex cash to the central bank for onward credit to their offshore accounts with correspondent banks.
However, the approval comes with guidelines that require strict adherence from all DMBs, effective immediately.
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