Banks mandated to deposit any extra FX by CBN

All Deposit Money Banks have been instructed by the Central Bank of Nigeria to deposit any extra foreign currency notes they may have with its branches in Lagos and Abuja.

This was revealed by the apex bank in a new circular on Friday, which was signed by its acting director of the currency operations department, Solaja Mohammed Olayemi.

According to the CBN, this will increase foreign exchange liquidity and bring the official and parallel markets’ exchange rates closer together.

According to CBN, the need for guidelines arose from DMBs’ growing requests to deposit their foreign exchange funds with CBN so that it might be credited to their individual offshore accounts.

The permission comes in response to DMBs’ growing request that CBN receive their foreign exchange currency deposits so that it can be credited to their offshore accounts with the correspondent banks.

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Consequently, the following guidelines are hereby recommended to be rigorously followed by all DMBs: Provide written notification to the Branch Controller at CBN Lagos or Abuja, at least three (3) working days in advance, of their intention to deposit foreign exchange. The list of owners of the foreign cash that needs to be deposited needs to be submitted with this.

Each day, all deposits have to fall below the following threshold: There is a maximum limit of USD 10 million for higher denominations (USD 100 and USD 50), a maximum limit of USD 1 million for lower denominations (USD 20 and below), a maximum limit of GBP 1 million, and a maximum limit of EUR 1 million for EURO notes. In order to witness and verify the amount to be placed, two (2) representatives of the depositing bank must be present.

“Deposits may be made in any value of GBP or EUR as well as USD100, USD50, USD20, USD10, USD5, and USD1. Every denomination needs to be kept in its own box.

“Only CBN-registered CIT businesses may be hired by the DMBs to deposit foreign currency notes.

Deposits must be made between the hours of 8 a.m. and 12 p.m.

In the presence of the depositing bank’s officials, the branches in Abuja and Lagos would accept, count, and confirm such deposits on the same day.

“Within the T+5 cycle, the Bank will credit the DMBs’ account through their offshore correspondent bank.

“The DMB current account with CBN shall be used to recoup the handling charge, which amounts to 0.30 percent of the authenticated amount.”

“The Bank will not accept foreign exchange deposits from any DMB that does not follow all guidelines.” Please be aware that these rules are going into force right now.

According to CBN, “this circular supersedes the circular Ref. No. COD/DIR/GEN/CMI/11/094 of July 17, 2017.”

Recall that on Friday, the official and parallel foreign exchange markets saw Naira trading at N1505.30 and N1515 against the US dollar.