CBN cautions against unlicensed Int’l Money Transfer Operators

The Central Bank of Nigeria (CBN) Tuesday night advised Nigerians at home and in the Diaspora to beware of what it called “the unwholesome activities of some unlicensed International Money Transfer Operators (IMTOs) in Nigeria.”

In a mailed statement, the CBN said the warning had become necessary because of the activities of some unregistered IMTOs, whose modes of operation are detrimental to the Nigerian economy.

The CBN was apparently reacting to an earlier call by  an Online remittance provider WorldRemit for the urgent restoration of money transfers to Nigeria, accusing the regulator of rolling out some new rules which leave virtually all money transfer operators (MTOs) unable to provide services to the West African country.  The new rule allows only three companies – Western Union, MoneyGram and Ria – who are registered to operate as official MTOs to continue operations, following a new strategy move by the CBN.

Following the development, WorldRemit, as well as all other international MTOs, who are not registered for such functions have been instructed by their local correspondents that transfers to Nigeria will no longer be processed and were, accordingly, suspending services immediately.

WorldRemit founder and CEO, Ismail Ahmed described the move as arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who he said rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing.

But sources say that the unregistered IMTOs like the WorldRemit had formed a racket which suffocates the $21billion annual diaspora remittances from flowing into the economy. It was also to forestall this ugly trend that the CBN directed banks to sell dollar remittances to the BDCs going forward so that these unregistered IMTOs do no longer have access to such inflows.

Besides, CBN is now insisting that all financial service providers in Nigeria, just as in other jurisdictions, must be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.

Isaac Okorafor, Acting Director, Corporate Communications CBN told BusinessDay that the apex bank has not closed the operations of any licensed MTO. “What we are trying to do is to ensure that money transfer is legal, transparent and to the benefit of the Nigerian economy. “For the avoidance of doubt, all licensed International Money Transfer Operators, in line with the CBN Circular on the sale of foreign currency proceeds of July 22, 2016, are required to remit foreign currency to their respective agent banks in Nigeria for disbursement in Naira to the beneficiaries while the foreign currency proceeds are to be sold to Bureaux De Change operators, for onward retail to end users,” Okorafor, further explained in the statement.

“The Central Bank of Nigeria will therefore not condone any attempt aimed at undermining the country’s foreign exchange regime.

Accordingly, members of the public are advised to beware of the activities of such unregistered IMTOs for the greater economic good of Nigeria, the apex further warned.

FALLOUTS

Following the development, WorldRemit, as well as all other international MTOs, who are not registered for such functions have been instructed by their local correspondents that transfers to Nigeria will no longer be processed and were, accordingly, suspending services immediately.

WorldRemit founder and CEO, Ismail Ahmed described the move as arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who he said rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing. But sources say that the unregistered IMTOs like the WorldRemit had formed a racket which suffocates the $21billion annual diaspora remittances from flowing into the economy. It was also to forestall this ugly trend that the CBN directed banks to sell dollar remittances to the BDCs going forward so that these unregistered IMTOs do no longer have access to such inflows.

Besides, CBN is now insisting that all financial service providers in Nigeria, just as in other jurisdictions, must be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.

Isaac Okorafor, Acting Director, Corporate Communications CBN told BusinessDay that the apex bank has not closed the operations of any licensed MTO. “What we are trying to do is to ensure that money transfer is legal, transparent and to the benefit of the Nigerian economy. “For the avoidance of doubt, all licensed International Money Transfer Operators, in line with the CBN Circular on the sale of foreign currency proceeds of July 22, 2016, are required to remit foreign currency to their respective agent banks in Nigeria for disbursement in Naira to the beneficiaries while the foreign currency proceeds are to be sold to Bureaux De Change operators, for onward retail to end users,” Okorafor, further explained in the statement. “The Central Bank of Nigeria will therefore not condone any attempt aimed at undermining the country’s foreign exchange regime.

Accordingly, members of the public are advised to beware of the activities of such unregistered IMTOs for the greater economic good of Nigeria, the apex further warned.

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