• The Central Bank of Nigeria has prevented foreign banks operating in Nigeria from taking deposits
  • The bank said that foreign banks, especially representative offices of banks, are not allowed to conduct remittances as well.
  • CBN said foreign banks can only engage in services that show them displaying their parent company’s brand and services.

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

In a directive issued on Thursday, October 13, 2022 and signed by the Director of CBN’s Financial Policy and Regulation Department, Chibuzo Efobi, the bank said that licensed foreign banks operating in Nigeria would not be permitted to provide services. specified in Nigeria as a banking business, including deposits and remittances.

CBN Governor, Godwin Emefiele Credit: NurPhoto / Contributor
Source: Getty Images

Foreign bank offices are not allowed to process funds

Read also

Glo joins MTN and Airtel to launch banking service, as CBN gives its approval

In the directive titled Regulation of Representatives of Foreign Banks Offices in Nigeria, the apex bank has stated that licensed operators are not permitted to perform any business or commercial activities that may lead to the issuance of invoices for the services generated.

PAY ATTENTION: Follow us on instagram – Receive the most important news directly in your favorite application!

The nation reported that foreign banks were also prohibited from accepting orders on behalf of the foreign parent company and engaging directly in financial activities.

The bank headed by Godwin Effiefele asked representative offices of foreign banks to fulfill the crucial objective of displaying the brand and services of their parent companies. Banks are also mandated to stimulate foreign direct investment in their parent companies in Nigeria by connecting capital to various investment opportunities.

Requirements for Establishing Representative Offices in Nigeria

In addition, the guidelines from the apex bank listed the financial requirements for representative offices of foreign banks in Nigeria, including an application fee of N5 million and a license fee of N10 million.

Read also

FG, CBN Reveals New Employment Guidelines and Gives Contract Staff a Chance to Survive Working in Nigerian Banks

Additionally, CBN said representative offices should only use the parent’s name in their documents and correspondence, including signage, letterhead and business cards.

The financial services regulator said it would carry out periodic and risk-based oversight of representative offices, which would include a review of the activities carried out, a general assessment of its management and supervision, a review of the compliance of offices to applicable regulations and conditions imposed on their operations and activities as part of the bank’s approval of its establishment.

Emefiele laments rise of fintech banking, says it’s disturbing

Remind that Legit.ng reported that Godwin Emefele, the Governor of the Central Bank of Nigeria (CBN), said that the rapid growth in the development of fintech companies has continued to change the financial sector in Nigeria.

He said the growth has continued to disrupt traditional banking methods and offer financial services in the sector. Emefiele said the development is worrying.

Emefiele said there is a need for the CBN and other regulatory agencies to put in place strong regulatory controls to help mitigate the tragic incident that may occur as the country enables fintech growth.

Source: Legit.ng